Business owner basics
Nov 29, 2016 03:03PM
By Cassie Goff
After resident questions about LLCs, Jaelynn Jenkins answers them visually during her business boot camp presentation. (Cassie Goff/City Journals)
By Cassie Goff | [email protected]
During October, Cottonwood Heights hosted free “Back to Basics” business boot camps every Thursday at the new city hall on 2277 E. Bengal Blvd. The series was sponsored by Zions Bank.
Matthias Miller, a small business development advisor from Growth Partners, began the boot camp series on Oct. 6 by discussing how to create a business strategy.
“It’s exciting to help others find and implement new and better ideas, solutions and systems that benefit both customers and the business,” Miller said.
With Growth Partners, Miller helps small business owners increase personal growth and capability. To do so, he works with them to establish the desires, purpose and vision of the business. He also helps business owners with solutions, marketing and scaled growth.
On Oct.13, Jaelynn Jenkins from Fetzer, Simonsen, Booth, and Jenkins discussed how to define your business’s legal entity. Jenkins works as an attorney in areas of estate planning, business law and general litigation, among others.
She discussed the different types of business entities so the business owners in attendance could determine the best fit for them. She discussed sole proprietorships, partnerships, corporations and limited liability companies (LLCs).
“The control depends on the kind of partnership you have,” Jenkins said.
In corporations, the owners are the shareholders and management comes in the form of a board of directors. With a sole proprietorship, there is no separate legal unity so if someone comes to sue, they can go for twice the assets. With the LLC, only the business can be sued.
“These protect you,” explained Jenkins.
As far as taxes are concerned, sole proprietorships tax the business owner as well as the business. Since corporations pay owner dividends, they are taxed by the IRS. LLCs are taxed like sole proprietorships but can lessen the double tax burden. They are more flexible.
Small business owners have to establish themselves with the U.S. Department of Commerce. The department wants to know who the business owner is, who their registered agent is and who their members are.
Depending on the business, additional licenses are required by the state. Along with licensing, small businesses also need an employment identification number if they have employees.
Jenkins said the most important advice she can give is to “make sure to have agreements written out.” This serves as self-preservation and self-protection.
Business owners should also consider the future of their business, which entails what happens to the business when they leave or die.
Jenkins made sure to reiterate that businesses have risk management. “There are multiple lanes of defense for businesses, insurance, funds, procedures, policies, fundraising and securities.”
On Oct. 20, Bill Hilliard from Zions Bank taught “Small Business Loans 101.”
“Zions Bank is number one for small business loans in America,” Hilliard said. “It’s government backed — they will cover 85 percent of the balance if the loan goes bad.”
Hilliard discussed the differences between lines of credit and term loans. He discussed what can be used as assets and how that works with loans. He also defined unfamiliar terms such as maximum amortization.
The loan officers at Zions work with many different kinds of loans, such as CAPLines, 504 loans, 7(a) term loans, express term loans and express revolving line of credit.
“We can help some businesses from the ground up,” Hilliard said.
Even though small businesses require a lot of documentation, they usually have great products and can be well worth it. Hilliard has personally worked with business owners in the ski industry all the way through to massage therapists.
“You identify the need and we’ll help to identify the loan,” Hilliard said.
Hilliard concluded by going over a bullet list on how to get approved for a loan. He discussed factors such as business tax returns, interim financial statements, debt schedule, business plan, financial statements and projections.