How to Start a Business

Financing a Business Federal and state government agencies do not provide grants to self-employed individuals for starting a business. However, there are a number of low-interest loan programs that help individuals obtain startup financing. Government Contracting Opportunities The government provides many opportunities for small businesses. The following guide provides information on programs that help small businesses successfully compete for federal contracting opportunities. Independent Contractor: Commonly known as consultants, freelancers and self-employed, independent contractors are individuals who are hired to do a particular job, receiving payment only for the work being done. Independent contractors are business owners, and are not their clients’ employees. They do not receive employee benefits or the same legal protections as employees, and are often responsible for their own expenses. Start Your Business As an independent contractor, you will also want to create a standard agreement for your services. The U.S. Chamber of Commerce provides a sample agreement. You can find a number of other sample agreements on the Internet, but it is best to consult an attorney to draft one specifically for your business, since your agreement will be a legal document between you and your client. Find Business Opportunities Large and small businesses, organizations and government agencies hire independent contractors for a wide variety of jobs, from professionals such as accountants and engineers to trades like construction and trucking. Operate Your Business As an independent contractor, you are responsible for paying your own taxes, Social Security, unemployment taxes, workers’ compensation, health insurance and other benefits. In addition, you and your client should understand the differences between an independent contractor and an employee, as well as your legal rights and responsibilities. Pay Your Taxes Independent contractors must pay federal taxes on 10

are any patents, trademarks and/or copyrights associated with the business, you may need to complete the necessary forms as part of the transaction. 3 Franchise: You may need to complete franchise documents if the business is a franchise. 3 Closing or Settlement Sheet: The closing or settlement sheet will list all financial aspects of the transaction. Everything listed on the settlement should have been negotiated prior to the closing. 3 Covenant: Not to Compete. It is a good idea to have the seller sign an agreement to not compete against the business. This will help prevent any interference from the previous owner. 3 Consultation/Employment Agreement: If the seller is agreeing to remain on for a specified amount of time, this documentation is necessary for legal purposes. 3 Complete IRS Form 8594 Asset Acquisition Statement: This document will indicate how the purchase was allocated and the amount of assets, which are important for your tax return. 3 Bulk Sale Laws: Make sure that you comply with bulk sale laws, which govern the sale of business inventory. SELF EMPLOYED & INDEPENDENT CONTRACTORS

Self Employed: As an individual conducting your own business, you may want some guidance along the way. For example, what taxes do you need to pay?