THE FUTURE OF BUSINESS STARTS HERE
The contents of this publication are presented for Informational purposes only and should not be considered in any way legal or professional assistance. We encourage you to seek the advice and council of a licensed professional when dealing with legal and Financial matters.
While care has been taken to provide accurate, up-to- date information, the information presented has been collected from numerous sources and is subject to errors and changes and should be further researched for updates and accuracy.
What is an entrepreneur?
*Someone who organizes and maintains a business venture.
*Someone who takes on the risk and does what he/she wants in order to make a profit.
*Someone who can coordinate the resources available to meet a need.
Is entrepreneurship for you?
There is no way to eliminate all the risks associated with starting a small business. You can improve your chances of success with good planning and preparation. A good starting place is to evaluate your strengths and weaknesses as the owner and manager of a small business. Carefully consider each of the following questions.
Are you a self-starter? It will be up to you-not someone else telling you to develop projects, organize your time and follow through on details.
How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors staff, bankers and professionals such as attorneys, accountants or consultants. Can you deal with a demanding client, an unreliable vendor or cranky staff person in the best interest of your business?
How good are you at making decisions? Small business owners are required to make decisions constantly, often quickly, under pressure and independently.
Do you have the physical and emotional stamina to run a business? Business ownership can be challenging, fun and exciting, but it is also a lot of work. Can you face 12-hour days six or seven days a week?
How well do you plan and organize? Research indicates that many business failures could have been avoided through proper planning. Good organization of financials, inventory, schedules and production can help avoid many pitfalls.
Is your drive strong enough to maintain your motivation? Running a business can wear you down. Some business owners feel burned out by having to carry all the responsibility on their shoulders. Strong motivation can make the business succeed and will help you survive slowdowns as well as periods of burnout.
How will the business affect your family? The first few years of business startup can be hard on family life. The strain of an unsupportive spouse may be hard to balance against the demands of a business. There also may be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk.
One Year Before Startup
- Refine your ideas in writing. Determine exactly where you want to go.
- Decide what business you want to start. Be specific in your business definition.
- Access the impact on your family and personal life. How will this affect your relationships? Will your family support the use of finances and time?
- Begin research. You must determine if there is a need for your product. This research can be performed by students, professionals or on you own.
- Build your skills by taking management/business courses. Contact Spartanburg Community College or Limestone College about continuing education.
- Contact the Small Business Development Center (SBDC] for assistance in writing a business plan.
- Contact South Carolina Department of Labor (SCDOL] for information on educational seminars on labor/safety issues.
Six Months Before Startup
- Determine the focus of your business. What do you want to specialize in? It is easier to excel at one area than at many.
- Start writing your business plan.
- Define your target markets. Who is your intended clientele? Who should you aim your advertising towards?
Research business and trade organizations. Most areas of business have agencies and organizations set up to facilitate business. Take advantage of what these groups have to offer.
- Seek the best location for your business. Do you need little or lots of space? Would your business be better suited downtown or in rural part of the county? Is a storefront location needed or can you work from your home? Location can make or break a business. Conduct the search on your own or contact a real estate agent. Look into co-working space or business incubators to see what would work for you and your business needs.
Four Months Before Startup
- Name your business. Be careful in deciding on a name and be aware that someone may already be using the name. Have a few back-up ideas. You can check to see if a name is being used by contacting the South Carolina Secretary of State’s office.
- Select a business location. After seeking out several possible locations, now is the time to choose one. Make sure the location you choose is within your budget.
- Select outside advisors. This will be a very hectic time. It will be beneficial to have people on whom you can call to listen to your ideas, problems and plans. These people will provide you with guidance, constructive criticism and feedback. They should be people experienced and knowledgeable in business.
- Network with mentors, people who can help you by giving you insight and ideas.
- Choose your business’ legal form. Will you be a partnership, sole proprietorship or corporation? Legal form should be chosen very carefully as it can impact your business in many ways.
- Set up bookkeeping, accounting and office systems. How are you going to operate your office? If you are going to keep your own books, then you need to learn or refresh your skills. Are you going to hire a bookkeeper/ bookkeeping firm?
- Seek outside demographic information. Gather secondary information.
- Work on your business plan.
Three Months Before Startup
- Determine your cash needs. How much money do you need to start up? What will your monthly variable and fixed cost? What is your break-even point?
These are all questions that must be answered. You must estimate your cash flow.
- Review preliminary financial objectives. How much profit do you expect to make? Are you planning on making investments? What is your intended cash flow?
- Decide on your pricing strategy. After determining your variable and fixed costs, decide what your markup rate will be. You will also need to consider demand and competitive factors in setting your price.
- Forecast sales. Contact the SCDC or others in your field to help you forecast accurately.
- Determine your company’s employee needs. How many people do you need on your staff; it effects your requirements for insurance, etc.
- Project your cash flow. Write out a draft of estimated statement of revenues and expenditures. This statement should cover one calendar year. Also, project your net cash flow for the entire year.
- Work on your business plan.
Two Months Before Startup
- Prepare your marketing plan. How are you going to market your product? Are you going to use publicity? Are you going to use paid advertisement? You must decide how you will go about introducing your business to the public.
Get your business license, (see occupational tax)
- Review non-financial objectives (image, legal questions). How do you want the public to see your business? Are you a family establishment or geared more toward adults? What form is your business taking? Do you have all legal documents needed?
- Prepare a preliminary balance sheet. Contact SBDC for assistance.
- Secure necessary financing. Whether through a private lender or through other resources, you must obtain the necessary amount of start-up capital.
- Secure insurance coverage if applicable, (see Labor/Safety).
- Determine advertising, promotion and public relations strategies.
- Order opening inventories. Talk to your suppliers for estimated opening needs.
- Complete improvements to your facility.
Start your hiring process (see Labor/Safety) and refine your business plan.
One Month Before Startup
- Fine-tune your cash flow budget.
- Prepare for your grand opening. The Cherokee County Chamber of Commerce can be of assistance in planning your event. Be creative and practical.
- Set up your office, display areas, etc. Have everything exactly as you want it. the last few days before opening are not the time to do this. The look of your store or office sets the tone for your business. You should put thought and time into it.
- Review your final checklist.
- Hire your staff (see Labor/Safety). SC Works can provide assistance with hiring qualified persons.
- Make sure everything works. It is better to find out that your equipment does not work in advance. In that case, you can make any necessary repairs and be ready to open the doors on time.
- Implement marketing, promotion and opening plans. This will be a good time to start advertising in local newspapers, radio and television if your budget permits. Remember: word of mouth and social networks are your most powerful publicity! They’re also the least expensive. Spread the word.
Startup and After
- Budget your time. As a new business owner, your time will be precious.
Schedule your time wisely. It is important to get the maximum out of time you have available. You must consider reading some time management materials or speaking with someone who you think manages time wisely.
- Continuously update your product/service. What is good about your product? Make it better. What doesn’t work with your product? Eliminate the problem as much as possible. If people patronize your business for the original product, an improved product can only increase that.
- LISTEN to your customers, advisors and vendors. The customers are your cash flow. It is important to gather their opinions and put them to use. Their ideas can be helpful in updating your product. LISTEN to your advisors, you asked them to advise you for a reason. Let them guide you. LISTEN to your vendors. They have been in business much longer than you. They can possibly provide You with money saving or moneymaking ideas.
- Check cash flow budget against actual performance.
- Maintain good communications with your bankers and vendors. By keeping the lines of communication open, you are helping yourself. Should you need their help in the future, you are more likely to receive it.
- Continue to improve the 5 Cs of credit-character, collateral, capacity, capital and condition.
- Work with investors. Make sure you are in contact with them. Make sure that you understand the conditions of your repayment. When are payments due?
Make sure you fulfill all obligations to investors. You may need to call them again someday.
- Check cost of living budget. If you are drawing money from the company for living expenses, be sure to take only what is necessary. Stick tightly to your budget.
- CONSIDER delaying your official grand opening/ribbon cutting until you’ve been in business for a couple of weeks. If you do, you can make sure you have worked all the ‘bugs’ out and everything is running smoothly.
The Business Plan
A business plan precisely defines, identifies your goals and serves as your firm’s resume.
The basic components include a current and pro forma balance sheet, an income statement and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications and make good business decisions. Because it provided specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers and others about your operations and goals.
The following outline of a typical business plan can serve as a guide. You can adapt it to your specific business. Breaking down the plan into several components help make drafting it a more manageable task.
- Give a detailed description of the business and its goal.
- Discuss the ownership of the business and the legal structure.
- List the skills and experience you bring to the business.
- Discuss the advantages you and your business have over your competitors.
- Discuss the products/services offered.
- Identify the customer demand for your product/service,
- Identify your market, its size and locations.
- Explain how your product/service will be advertised and marketed.
- Explain the pricing strategy.
- Explain your source and the amount of initial equity capital.
- Develop a monthly operating budget for the first year.
- Develop an expected return on investment and monthly cash flow for the first year.
- Provide projected income statements and balance sheets for a two-year period.
- Discuss your breakeven point.
- Explain your personal balance sheet and method of compensation.
- Discuss who will maintain your accounting records and how they will be kept.
- Provide ‘what if statements that address alternative approaches to any problem. 10
- Explain how the business will be managed on a day-to-day basis.
- Discuss hiring and personnel procedures.
- Discuss insurance, lease or rent agreements and issues pertinent to our business.
- Account for the equipment necessary to produce your products or services.
- Account for production and delivery of products and services.
- Summarize your business goals and objectives and express your commitment to the success of your business.
- Once you have completed your business plan, review it with a friend or business.
- When you feel comfortable with the content and structure, make an appointment to Review and discuss it with your lender. The business plan is a flexible document that should change as your business grows.
Feasibility and Marketing Strategy
Is your Business Idea Feasible?
Answer the following questions regarding your idea. Give complete, well thought out answers. If you are unsure about or answer no to any of the following questions, then you would rethink your idea.
- What type of business do you plan to start?
- What kind of product do you plan to offer?
- Will your product satisfy a need yet unfilled?
- Will your product have a competitive edge based on price, location, quality or selection?
Researching Your Markets
It is recommended that you research your potential market demand for your product or service. First, determine what questions you need answered. The following are ideas on where to find the information you need.
- Your experience
- Experiences of people you know
- Survey potential customers to determine their wants/needs. Observe similar businesses
- Interview these business’s owners
- Interview suppliers, vendors, bankers Secondary Data:
- Visit your public library
- Contact trade associations (trade shows and trade journals]
- Contact the SBDC, Spartanburg Community College, Limestone College, Cherokee County Chamber of Commerce or Cherokee County Development Board. See the Resource Directory for contact information;
- Use various search engines on the Internet (Yahoo, Google, etc.]
Marketing Your Business
In order to properly market your product, you need to answer the following questions.
This information can be used to help you develop your marketing plan. Contact SBDC for more information on constructing this plan.
- Who are my customers? (This determines your target market.]
- Where are they?
- How many are there? (This indicates your market size],
- What are their needs?
- Who are your competitors?
- How does my competition do it? (One method of marketing/dealing with
Competition is the end-run strategy. In this strategy you adopt your competitors’ strategy with the intention of making it better). 12
- How can I reach them? (The distribution of our product is very important. Where your product is located can affect how well it sells).
- How much will they pay? (The pricing of your product is also very important. You must take into consideration what your competitors charge).
- What are the market trends? (What are people buying? It is important to be aware of market trends. This relates back to knowing your customer’s needs. Try to distinguish between trends and fads).
- What are the technological trends? (One obvious answer to this question is the Internet. Will you be using technology? How can it be used to help your business? Do you need to advertise on the Internet? Do you need a network of computers for your business? If you are in a business related to technology, it is imperative that you stay abreast of any changes).
DETERMINING CASH NEEDED TO START A BUSINESS
Estimate of monthly expenses based on projected sales of $_ per year.
Salary of owner/manager All other salaries/wages Rent
Advertising Office Expenses Supplies
Telephone and fax Other Supplies Insurance
Taxes, including Social Sec. Maintenance/Repairs Legal/Professional Fees Loan Payments Miscellaneous
One Time Start-Up Costs
Fixtures and equipment (get estimates from suppliers)
Decorating and remodeling (get estimates from contractors Installation of fixtures/equipment (get estimates from suppliers) Starting inventory (vendors can advise as to amounts and costs Deposit of utilities (contact providers for estimates) Legal/professional fees (get estimates from attorney/CPA, etc.) Licenses & permits (contact government offices for amounts) Advertising and promotions for opening (get estimates from media) Other (make additional list if necessary)
TOTAL ESTIMATE OF CASH NEEDED FOR START-UP: ______________
A variety of free demographic information is available on the Internet or through the local chamber of commerce office. This information breaks down population by different categories, such as age, sex, race, income and education. It can be used to identify the number of people who may use your business or services.
Contact Appalachian Council of Governments office for assistance in gathering appropriate Demographic information as follows:
30 Century Circle Greenville, SC 29607 (864) 242-9733 www.scacog.or
Legal Aspects Of Starting A Business
LEGAL ASPECTS OF STARTING A BUSINESS
Deciding what form of legal entity your business will take is an important decision. This will have an impact on the future of your business including your protection under the law, and the rules and regulations (for example: federal and state taxes] that will apply to you.
It is recommended that before you enter into any of these four forms of business, that you contact an attorney, CPA or other qualified individuals. Speaking with someone informed about the legal entities of business will reduce the risk of mistakes in the business setup. You can probably do the necessary paperwork and procedures yourself, but it makes sense to leave it up to the professionals. Also, contact the SBDC for more information.
There are four forms a business can take:
- Sole proprietorship
- Partnership (General or Limited]
- Corporation (C or S]
- Limited Liability Company
A sole proprietorship is usually owned and operated by one person. Under the law, it is not actually considered a legal entity. It is instead considered an extension of the person who owns the business. This individual has sole ownership of assets, but is also solely liable for the debts of the business.
A partnership can be formed in two ways. A general partnership is comprised of two or more individuals who join to start a business. Each person has proportional ownership of the business assets and proportional liability for business debts. Each person also has authority in running this business. A partnership agreement can be drawn up to after each person’s particular liability. However, despite this document, creditors may collect from each and every member of the partnership (this may include personal assets],
A limited partnership is made up of one or more general partners as well as one or more limited partners. Limited partners contribute capital and share in profits/losses.
These limited partners, however, take no part in the running of the business and are not held liable for the organization’s debts.
Whether taking part in a general or limited partnership, it is advisable that you draw up a partnership agreement. This document will detail each partner’s rights and responsibilities. Partnerships are required to file both federal and state income tax. While the partnership is not typically taxed, each partner charges for the partnership on his/her personal tax returns.
A corporation is an entity, which must be approved by the state of South Carolina through the office of the Secretary of State. A corporation must file federal, state and local taxes on its operations. One advantage to a corporation is the protection from liability afforded to shareholders. However, when an organization is small, creditors may require personal guarantees of predominate owners. Another advantage to the corporation is the ease of 16
raising capital through the sale of common or preferred stock. A disadvantage of the corporation is that the organization’s income will essentially be taxed twice (once for the business and again on the shareholders personal income tax after collecting dividends]. There are two types of corporations: C and S.
The C corporations have their own tax identification numbers and pay their own taxes. The S corporation is the opposite. It is not taxed as if it is a corporation at all. Instead, it is taxed similarly to a partnership. Its gains and losses are reflected on the personal income tax of the shareholder. The S corporation does not provide protection from liability to its shareholders, (the distinctions between C and S corporations can be complicated. It is very important that you consult with someone who is knowledgeable on the subject before making a decision.]
In order to incorporate your business, contact the Office of the Secretary of State. You will then reserve your corporation name. The incorporation process must be completed within 90 days. The Office of the Secretary of State will instruct you in the completion of all documents needed. You will be required to play an incorporation fee.
Office of the Secretary of State Edgar Brown Building Suite 525
Columbia, South Carolina 29201 803-734-2170
This incorporation process includes publishing your intent to incorporate in the local newspaper’s legal publication. Newspapers do charge for this service. The legal organ for Cherokee County is The Gaffney Ledger. To publish your intent in the Ledger:
The Gaffney Ledger 1604 W. Floyd Baker Blvd.
Gaffney, SC 29341 (864]489-1131
An attorney can usually perform the necessary procedures for you for several hundred dollars. How much it will cost depends on the attorney and your business.
The limited liability company (LLC) is one owned by two or more persons known as members. It is a mixture of other forms of organizations. This form combines some of the partnership, corporation and S corporation’s best features. Similarly to a corporation, you must reserve a name and file the articles of incorporation. You and your fellow members should write an operation agreement to control the conduct of the business.
An LLC shields the personal assets of members as if they were shareholders in a corporation. It also eliminates double taxation. Because an LLC is a somewhat new organizational form, it is unclear how the partnership tax rules will apply. You may not be able to conduct interstate trade as an LLC. Many state and foreign governments have not yet provided this form. In addition, an LLC may not have a perpetual life. While this form of organization is gaining popularity, you must take great care in the establishment of an LLC to insure pass-through tax treatment.
No license is required by Cherokee County. However, a business license is required for businesses operating within the city limits of Gaffney or the town limits of Blacksburg. You should discuss Details with the specific agency.
City of Gaffney 201 N. Limestone Street Gaffney, South Carolina 29340 [864) 487-8505
Town of Blacksburg 105 S. Shelby Street Blacksburg, SC 29702  839-2333
Once you have chosen a tentative location for your business, contact the zoning department to determine the permitted uses of that location. There might be special restrictions on that area.
DO NOT INVEST ANY MONEY IN A LOCATION UNTIL ZONING HAS BEEN THOROUGHLY RESEARCHED!!
The Cherokee County Planning and zoning office can help with determining your location and type of business are in compliance with ordinances. You will be required to submit your business plans to the zoning office to determine if the business complies/can be adapted to comply with the following:
- Current zoning classification
- Building setbacks
- Off-street parking availability and service entrance requirements
- Buffer yards or required screening
- Lot area minimum
- Sign regulators
Sign permits in the city limits of Gaffney and the Town of Blacksburg may be required for erecting and placing any mounted or freestanding signs. For specific information about signage, call [864)487-2561 in Gaffney or [864)839-2333 in Blacksburg.
If your plans do not/cannot meet these specifications, you can discuss options with the zoning office . If you find the current zoning classification of your potential location does not allow for your business, you may file an appeal for rezoning. In order to file this appeal, contact the Planning and Zoning office.
In Cherokee County, a building permit must be obtained for both new construction and renovations of and additions to existing buildings. Before you may construct a new facility or renovate an existing one, you must have this permit. Once you have obtained a building permit, complied with the regulations pertaining to the area you are in, and construction is complete, your facility will be inspected. You will then apply for a Certificate of Occupancy. Without this certificate, it is illegal for your business to reside in the facility.
Inspections and Permits in Cherokee County (Excluding Gaffney City Limits)
Cherokee County 127 E Floyd Baker Blvd Gaffney, SC 29340 864-487-8500
INSPECTIONS & PERMITS IN GAFFNEY CITY LIMITS
City of Gaffney 203 N. Limestone St.
Gaffney, SC 29340 (864) 487-8500
If your business is to involve food processing, handling, storage, or distribution, you must obtain permits from the Cherokee County Public Health Department, which handles the permits from the entire county. If you are unsure if your business needs a permit, contact the Health Department in Cherokee County.
Cherokee County Health Department
400 S Logan St
Gaffney, SC 29340
A trademark or service mark may be registered with the Office of the Secretary of State provided the mark meets all the requirements of the South Carolina Trademark and Service Mark statute. Registration of a mark should be renewed every five years.
A mark must be in use prior to application for trademark or service mark registration. In the case of a trademark, the goods or products must be on sale in the marketplace in order for a mark to be eligible for a trademark registration. For service marks, the registrant must be rendering services before registration with the Secretary of State. The South Carolina Secretary of State’s Office registers trademarks and service marks only within the state. Nationwide trademark, copyright and patent information is available by calling the United States Department of Commerce Patent and Trademark Office at 1-800-786-9199.
The Secretary of State also investigates counterfeit marks and fraudulent use of registered trademarks. Please contact the office with any information or complaints concerning these matters.
SC Secretary of State’s Office Attn: Trademarks Division 1205 Pendleton Street, Suite 525 Columbia, SC 29201
Federal and State Licensing
Most new small businesses most likely will not require any type of federal licensing to conduct business, unless you will be engaged in one of the following activities:
- Rendering investment advice
- Making alcohol products
- Making tobacco products
- Making or dealing in firearms
For information on federal licensing for communications, transportation, or pharmaceutical businesses, contact:
U.S. Department of Alcohol, Tobacco & Firearms 2600 Century Park Suite 3430 Atlanta, GA 30345 404-679-5130
U.S. Federal Drug Administration 60 Eighth St Atlanta, GA 30309 404-347-4265
U.S. Federal Communications Commission 3575 Kroger Blvd.
Duluth, GA 30096 888-225-5322
Contact the Secretary of State’s office for a listing of all occupations that require state licensing. For information contact:
S.C. Secretary of State Edgar Brown Building 1205 Pendleton St, Suite 525 Columbia, SC 29201 803-734-2170
State of South Carolina Taxes
Sales tax is imposed on the sale of goods and certain services in South Carolina. The statewide sales and use tax is six percent (6%). Counties may impose an additional one percent (1%) local sales tax if voters in that county approve the tax. Generally, all retail sales are subject to the sales tax.
Use tax Purchase of tangible goods for use in South Carolina on which no South Carolina sales and use tax has been paid are subject to the use tax. Examples include catalog purchases, goods bought online over the internet or furniture purchased out of state and delivered in South Carolina on which no or sufficient South Carolina tax was paid.
For Complete information visit website www.sctax.org where you can click on the following for details: General Information: Provides access to general information about Sales & Use Taxes. Publications/Notices: Provides access to current Sales & Use Tax publications.
Tax Rates/Computation Schedules: Provides access to the current Sales & Use dTax rate by municipality And computation for cash registers.
Forms: Provides access to current and past year Sales & Use Tax forms and miscellaneous information Such as mailing addresses and forms from other states.
FAQs: Provides answers to frequently asked questions Updated 6/2010
Help: Provides information to frequently dialed numbers and taxpayer service centers.
S.C. Dept. of Revenue 301 Gervais Street Columbia, SC 29214 (803)898-5000
For a sole proprietor or a member of a partnership:
In either of these arrangements, you will be required to make estimated federal income tax payments and federal self-employment tax payments in advance. These individual payments are due in four installments. These payment deadlines are April 15, June 15, September 15, and January 15 for one whose tax year is the calendar year. Any amount left unpaid will be due April 15 of the following year. The Form 1040-ES is used to file these taxes. 90% of your estimated tax must be paid during the course of the year.
The corporation is responsible for paying estimated corporate taxes if it has taxable income. These taxes can be due as soon as the fourth month of the corporation’s first tax . ear. The proper form for filing these taxes is the Form 1120W. You must deposit these payments in a bank licensed to accept federal tax payments. The corporation will be issued a coupon book. These coupons will carry the corporations tax ID number and are to be used with all federal tax payment deposits.
All forms necessary to file any of the estimated taxes mentioned above are available at your local IRS office. A coupon book will be mailed to you upon receipt of your Form SS-4 (the form filed requesting a tax ID number).
Internal Revenue Service 440 Roper Mountain Road Greenville, SC 29615 (864) 286-7095
These are taxes that as an employer you are responsible for both withholding from employee wages as well as paying yourself. For more complete information on employer taxes, see Labor and Safety Regulation Information in Section IV.
Federal Tax Identification Numbers
Your federal tax identification number is the number used to file your taxes. It acts in a similar capacity to your social security on your personal income taxes. In fact, if you are a sole proprietorship you will probably use your social security number. In partnerships and corporations you will need a Federal Tax ID number. To determine whether you need a Tax ID number, contact the Internal Revenue Service.
The State of South Carolina may also require that you pay estimated state income taxes. The payment dates for estimated state tax are the same as those for federal payments (see Section K. Federal Income Taxes Above). The Form SC1040ES should be used . A 9% per year penalty can be imposed for failure to file an estimated return or failure to pay the correct amount of tax
Federal Excise Taxes
There are some forms of business on which the US Government requires additional taxation. This will be a tax that you are responsible for collecting. This tax does not come out of your pocket. Typically it is added to the sale price of your product or service. Form720. Quarterly Federal Excise Tax Return is used to file most federal excise taxes. Federal excise taxes can be broken into nine general categories of products or services. They are:
- Motor vehicle use tax (vehicles greater than 55,000 lbs. Gross weight)
- Retailers tax (certain types of fuels)
- Retail excise tax on the sales of the following: heavy trucks/trailers, tires and tubes, recreation equipment (e.g. fishing/hunting supplies), firearms and ammunition.
- Air transportation tax (if you are transporting people by air, you have to collect this tax)
- Communications taxes (e.g. on telephone or teletype services)
- Wagering taxes
- Taxes of U.S. mined coal
- Environmental taxes (imposed on petroleum products, various chemicals and hazardous water)
- Alcohol, firearms, ammunition and tobacco taxes
Be sure to contact the IRS for complete information on federal excise taxes.
Internal Revenue Service-Local Office 440 Roper Mountain Road Greenville, SC 29615 (864) 286-7095
The amount and way you will pay federal income taxes will be dependent on the legal form in which your business is organized.
To establish water, electricity and sewer with the City of Gaffney, contact:
The Board of Public Works 210 East Frederick Street Gaffney, SC 29340 (864)488-8800
To establish trash service in the City of Gaffney, contact:
The City of Gaffney 203 N. Limestone Street Gaffney, SC 29340 (864) 487-8510
To establish natural gas service in the City of Gaffney, contact:
Piedmont Natural Gas (800)752-7504
To establish water, sewer & trash service within the Town of Blacksburn, contact:
Town of Blacksburg 105 S. Shelby Street Blacksburg, SC 29702 (864) 839-2333
To establish natural gas service in the Town of Blacksburg, contact:
York County Natural Gas Authority (966)578-4427
To establish trash service within unincorporated Cherokee County:
Solid Waste/Garbage Collection
To establish within unincorporated Cherokee County;
Cherokee County has two electrical services. They are Duke Energy and Broad River Electric Cooperative. Each has its own application process. Which provider you will use is dependent on where your business is located. To establish service, you will need to provide the service address, name of person responsible for bill payment and the name of your company. A deposit will be assessed of each business that begins service. The deposit amount for a business (unlike a residential deposit) varies from business to business and can run into hundreds of dollars. To establish electric service, contact either:
Duke Energy Broad River Electric Cooperative
To establish telephone & internet services in Cherokee County:
Two telephone and internet services are available in the county, AT&T and Charter Business.
AT&T Charter Business
(866) 620-6000 (877)728-3814
Labor and Safety Regulations
Educate Yourself on Labor/Safety Issues
The South Carolina Department of Labor (SCDOL) is available to provide consultation to new businesses in the state. The local and state departments offer educational seminars and presentations throughout the year. These classes cover a wide range of labor-related topics such as labor laws, labor issues, prevailing wages, unemployment insurance benefits and employment services. It would be advisable to contact the local office regarding these classes. These seminars are intended to provide you with all the information you need to prepare you for the employment aspects of running a business. You should begin these classes up to one year before your intended start-up. At these seminars you will be provided with a section of the instructional workbook. After attending a certain number of these seminars, you will have the entire workbook. The SCDOL can help walk you through all of your employment and labor problems.
South Carolina Department of Labor Synergy Business Park; Kingstree Bldg.
110 Centerview Drive Columbia, SC 29210 (803) 896-4300
The issuing end enforcing of occupational and safety health regulations is handled by the U.S. Department of Labor. The Occupational Safety and Health Administration (OSHA) is the federal agency that administers these policies. The requirements put forth by OSHA include posting notices to employees and maintaining accurate records of employee injuries. OSHA will provide you with information on all requirements as well as related publications. OSHA policies and regulations must be posted in the workspace where all employees may see.
In addition to OSHA, the U.S. government also supports the Employment Standard Administration, Mine Safety and Health Administration, Veterans Employment and Training Service and the Pension and Welfare Benefits Administration. Each of these departments is designed to protect both the employer and employee. Similar to OSHA, each issues and enforces a unique set of requirements and regulations.
U.S. Dept, of Labor 1375 Peachtree St. NC, Suite 587 Atlanta, Georgia 30303 (404) 374-3573
Employer Tax Responsibilities
Businesses with employees must pay employer taxes and withhold employee taxes for both the state and federal governments. These should be deposited in any Federal Reserve Bank. You will be given a coupon book to accompany your deposits. These deposits are required monthly or quarterly. The South Carolina and U.S. Departments of Revenue will determine your time of payment. You will be required to withhold Social Security and Medicare taxes. In addition the employer must pay a matching amount.
You should consult the current year tax calendar for present percentages.
SC Department of Revenue SC Department of Labor
301 Gervais Street Syngery Bus. Park
Columbia, SC 29214 110 Centerview Drive
(803)898-5000 Columbia, SC 29210
Unemployment Insurance Taxes
Federal Unemployment Insurance Tax is the employer’s responsibility. This is not withheld from employee wages. Consult the Employer’s Tax Guide for more information on the various taxes that you will be required to pay. The Employer’s Tax Guide is a booklet designed to help you with all aspects of taxation. Contact the S.C. and U.S. Department of Labor and Revenue to receive the Employer’s Tax Guide and other relevant information. See contact information below.
If you are a sole proprietor, you are not required to pay withholding, but you are required to pay self- employment tax. Contact the Internal Revenue Service for complete details.
Worker’s Compensation Insurance
Workers’ Compensation Insurance is required of a business with more than four or more full or part- time employees. Contact the SC Workers’ Compensation Commission @ (803)737-5700.
Application Hiring and Termination Process
There are basic ground rules for hiring and firing employees. There are legal requirements to acquiring or terminating employees. I handled incorrectly, personnel issues can result to legal problems. These legal problems can be large enough to close your business. It is important to make sure all your bases are covered. In addition to the do’s & don’ts listed below, contact the South Carolina Employers’ Association or the South Carolina Dept, of Labor for more on correct hiring and firing policies.
Application and Hiring
- tZsk obvious questions. Do not ask questions regarding sex, age, race, etc. or anything related to these areas. These are sensitive areas and cannot be used as discriminating factors.
Some applicants may believe that all gathered information is used. It is for this reason that you should not ask these questions. It is best to avoid these topics so as to eliminate all possibility of legal problems.
- Wiite on the job application fowl. Any notes taken during interviews should be made on photocopies or other paper. This allows you to preserve the original application without marring it for your permanent records.
- JZimit youx intewiew to job duties. There is no reason to ask questions that do not apply to the responsibilities of the position. You may ask if an applicant has any barriers to completing the duties. Do not ask questions such as “Do you have children?” “Are you married?” Small talk is acceptable if the interviewer is careful. Do not venture into conversation that might produce seemingly discriminatory information.
- Atafle state all company ptocedwtes foUow employment statutes. Have your advisors or attorney to review your system for application, hiring and termination before you begin hiring and periodically thereafter.
- EDUCATE YOURSELF!!!! The best way to prevent problems is to be familiar with the law. When you are in doubt about any issue concerning labor of Isafety, contact the SC Dept, of Labor.
110 Centerview Drive Box #11329 Columbia, SC 29211 (803)896-4300
- Review Company policies. If you have not yet developed company policies regarding application, hiring and termination, call the SCDOL. Make a checklist of your procedures. Make sure that you have followed the rules in the firing process. If you have not completed your checklist, YOU SHOULD NOT TERMINATE THE EMPLOYEE YET. Take care to finish all steps in the process to alleviate any questions and possible legal repercussions.
Have a stated code of expected employee behavior. Employees face problems due to unclear expectations of conduct. It is easier to prove reasons for termination if such a code is in place. This documentation will be helpful if you are faced with paying restitution because it will show that you had sufficient cause to terminate the employee.
- Conduct an exit interview. This allows you to tie up any loose ends. Final paychecks can be issued , and company property (keys, paperwork, files, etc.) can be returned. Ask the employee what he/she liked or disliked about your company. Ask for feedback on aspects of your company of which this person has knowledge. This person might be a bit more forthcoming with problems or constructive criticisms than someone that still works there.
- Keep termination of Ian employee between you (management) and the employee. The fired employee should not be discussed with other employees. Privacy can help you avoid harsh feelings and legal repercussions.
- Have employees sign a release. If you are offering the fired employee severance pay or anything of value, have him/her sign a release of liability to the company. This may protect you in case of legal action.
Where to Find Your Labor Force
There are many resources through which one can find employees. If you want to use classifies advertisements in local newspapers, you can place ads in these publications for week long and even month long periods. SC Works can assist you in finding employees. Other places you might contact are local colleges and universities. You can register your job opening with Career Planning and Placement Offices.
When starting a business, one important consideration is where to obtain capital to back your venture. Most start-up businesses require a capital contribution by the entrepreneur, usually 20%. The remaining financing may be available from local banks or may require private investors. There are several Small Business Administration loan programs available to businesses, all of which require bank participation. These loan programs, however, are not guaranteed. They are all subject to change based on the SBA’s current budget.
- SBA Low Doc: This program provides financing for small businesses through guaranteeing a percentage of the bank’s loans to the business. The maximum loan is $150,000 and not more than an 80% guarantee. The loan is administrated by the bank and termed “Low Doc” because documentation has been greatly reduced and red tape is at a minimum. Eligible expenditures are for land and building, machinery and equipment, inventory and working capital.
- SBA Guaranteed Loan Program 7 (A): This program provides financing to small businesses through guaranteeing a percentage of the bank’s loan to the business. Eligible expenditures are for land & building, machinery& equipment, working capital and some restructure of 29
existing debt. The maximum SGA will guarantee is $750,000 and not more than 75% of the total loan.
- SBA 504 Loan Program: This program provides financing for small business through a low interest, fixed rate, long-term loan. The Small Business Administration takes a second lien position behind the bank. Eligible expenditures are for land and building, long-life machinery and equipment. The minimum SBA will finance is $125,000, and the maximum is $1,000,000. Job creation is a requirement of the program.
- BLX (Business Loan Express): This program is designed primarily for women, minorities, veterans and persons living in low to moderate income areas. One of the requirements is that applicants receive “appropriate pre and post loan closing management and technical assistance from the SBDC. Loan amounts range from $5,000 to $25,000 and are for working capital. They do not require a business plan and are unsecured. However, excellent personal credit is one of the primary criteria. Existing as well as start-up businesses are eligible. Loan terms are typically seven years and the interest rates are set at prime plus 4.75%.
While each of these programs has specific requirements for eligibility, there are certain standards that must be met for all loan programs. A loan applicant must be of good character, show the ability to operate a small business successfully and have a reasonable amount of his/her own resources to invest to withstand possible losses. In addition, the following will likely be required:
- Credit report
- Collateral adequate to secure the debt. List of collateral and its value.
- Appraisals required on real property used as collateral.
- Personal guarantees required of those persons (or companies with 20% ownership).
- Secondary collateral may be required.
- Personal financial statements and financial statements of business (if applicable).
You must first seek financing from a bank or other private source. If that is available at reasonable terms, the SBA cannot make the loan. Take your business plan to our banker and discuss your financial requirements with him/her. His/her involvement is essential. Then, call the SBDC at (864)592-6318 in Duncan, SC or (803) 323-2283 in Rock Hill, SC.
International trade can be difficult, but also can provide tremendous opportunities. Most start-up businesses will not be participating in international trade. However, if you choose to export or import goods, the following contacts may provide you with valuable information. The U.S. Export you access to all federal exporting resources.
United States Export Assistance Center Marquis Two Tower Suite 200 285 Peachtree Center Ave. NE Atlanta, GA 30303 (404)657-1900