Business Resource Guide Nothing in the world can take the place of persistence. Talent will not. Nothing is more common than unsuccessful men or women with talent. Genius will not. Unrewarded genius is almost a proverb. Education will not. The world is full of educated derelicts. Persistence, determination and hard work make the difference. -- Calvin Coolidge
About this Guide A Guide to Opening a Small Business in Lake County, Illinois is intended for the small start up business with plans of no more than 25 employees and sales under $5 million. Use this Guide as a tool to formulate your ideas and plans, but remember these five things: 1. This guide is an evolving document and may not be all encompassing 2. You will be working on numerous tasks at the same time, there is no typical chronological order 3. Continually ask questions of the people you meet throughout this process to help you evaluate your business plan and operation 4. Opening a business does not occur overnight. Take time to evaluate the market, your idea and the realities of opening a business 5. Understand that there will be stumbling blocks along the way Keep your determination and you will realize your dream of opening a business in Lake County
The following are Action Steps to guide you through opening a small business. Action – Feasibility Study Test your business idea with a feasibility study* and see if you are prepared for the next steps. You will: • • • •
Investigate your readiness to start a business Understand the realities of owning and operating your own business See if you should proceed with your business idea Affirm you are ready to be your own boss
Action – Research • • • •
Do your research on business concept Research costs associated with business – from start-up phase to continuing costs. Are you prepared for the financial burden? Keep in mind you may not have a salary for an extended period of time. Find a business mentor/coach to assist through start-up phase (i.e. colleague, boss, friend, someone who works in the field you wish to go into, a business owner or peer-to-peer exchange organization) Contact College of Lake County, Small Business Development Center or SCORE (Service Corp. of Retired Executives) at (847) 543-2033 for one-on-one assistance and business classes.
Action – Credit Reports •
Review your credit reports. Ensure that there are no mistakes or errors. Your credit score will determine interest rate or the risk the financial institution is willing to take. To order a copy of your credit reports
there are three agencies, Experian, TransUnion and Equifax with the cost of about $8 each. MyFico.com provides your Equifax credit report and your FICO score (your credit score) for $12.95 Action – Business Plan •
Write a Business Plan. This is the KEY step. Take time to write this document yourself – you are the one who will turn this document into a business. Evaluate and research your plans. Understand what is going to set apart your business from others. Assess your marketability. Remember, as your business evolves, use and update your business plan.
Action - Financing • •
•
Meet with preferred financial institution to discuss financing options (this varies by institution) such as home equity loans, business loans, SBA loan products, etc. Bring with you a draft of business plan for discussion purposes. Commercial lending decisions are not just based on your business idea; commercial lenders follow the 5 C’s of Credit – Capacity, Capital, Collateral, Conditions & Character. Contact Lake County Partners at 847.247.0137 to discuss economic development loan programs.
Important Note – at this time there are no federal, state or local grants to start a small business. Action - Business Structure •
Decide business structure*: Sole Proprietorship, Corporation, Partnership or LLC. Get advice from attorney and/or accountant to understand ramifications of tax and liability for YOUR business.
Action – Register Business Federal & State Register your business at the local, state and federal levels •
•
Federal (EIN) – your business Social Security Number. You must obtain this identification if incorporated; however as a sole proprietor it may be a good idea to obtain one too. It is used the same way as your personal Social Security Number is used for documentation and filing taxes. State Registration o IL Dept. of Revenue. After you obtain your EIN Number you will get an Illinois Business Tax (IBT) number (very similar to the EIN Number, but used only for state purposes). Sole Proprietor AND have employees (other than yourself) OR sell goods, file Form NUC1 (link to http://www.revenue.state.il.us/taxforms/reg/nuc-1.pdf ) o Corporation or LLC, register your business with IL Secretary of State (Guide for Organizing Domestic Corporation in Illinois*). o IDES – if you have employees (whether a sole proprietor or corporation) you must file with State to contribute into the unemployment fund (this will be sent to you, once Form NCU1 is filed).
Action – Register Business Lake County •
Lake County – For Sole Proprietors/Partnerships ONLY o File Assumed Business Name Certificate with the Lake County Clerk’s office. Form must be signed in the presence of a Notary Public. There is a $5 fee for filing. o Once complete, post receipt in local newspaper(s) for 3 consecutive weeks (there are deadlines for posting). Return to Lake County Clerk’s office.
Action – Site Location
•
Initial review of your location needs. Research what type of space you are looking for (industrial, office, retail, home or combination). What size of space is needed for initial success? Decide what are the accessibility needs for your customers (do you need to locate off a well-traveled road to produce success or will customers seek your business out). DO NOT SIGN A LEASE AT THIS POINT.
Action – Business License/Registration There are Professional certificate/license/permits that require registration. Some local municipalities may require a business license or registration. Contact the appropriate Municipal office (i.e. Finance, Clerk, Planning) to obtain correct information on licenses •
•
•
Examples of Businesses that MAY require license/permit (for Lake County & Municipalities) o Scavenger/garbage removal o Landscape o Solicitors o Selling of alcohol (plus requirements from State of Illinois) o Vending machines o Tobacco o Food Examples of Special Use Businesses that REQUIRE License/Permit (for Lake County & Municipalities) o Gas stations o Laundromats o Massage parlors o Taxicabs o Adult entertainment Illinois (state licenses) - The State of Illinois, Department of Professional Regulation has a complete list of businesses that REQUIRE License/Permit for specific occupations.
Action – Business Checking Account Open business checking account. Be certain to bring Articles of Incorporation (if incorporated) and your EIN Number. Most financial institutions require an EIN Number to open a business checking account, even if you are a sole proprietor. Action - Insurance •
• •
Types of insurance o General business o Liability o Workers compensation (cost based on payroll and trade) o Equipment o Plate glass (for retail stores) o Business disruption (if unable to open business for long-term) o Errs & Omissions (for real estate) o Dram shop (for sale of liquor) Speak to an insurance agent about specific insurance for YOUR type of business Speak to your Chamber of Commerce about group policy plans
Action- Taxes With first hire/employee or sale, report on taxes. It is your responsibility to report and pay taxes to the local, state and/or federal governments •
Types of reporting/taxes
Sales Unemployment New Hire reporting Withholding tax (Social Security and Medicare) Wage reporting Other Deductions and Reporting (Child support, credit issues and federal and state tax liens) Speak with your attorney and/or accountant for complete list of taxes YOU are liable for filing Display posters o IL Labor Laws (Notice of Unemployment) o Federal Posting Requirements (Minimum Wage, Equal Opportunity Act, Job Safety and Family and Medical Leave Act) o o o o o o o
•
Action - Networking Join networking group(s) (i.e. chamber of commerce, rotary club, and women’s business group)
If Buying Or Leasing A Location Action – Site Selection • • • •
•
Remember LOCATION, LOCATION, LOCATION. But also remember, there is always another PERFECT location Contact communities to express your intent to open a business – helps municipality identify what your needs are for space, zoning and permitting Communities could also have a detailed list of available sites for rent/lease/own to help you identify a site location Do NOT sign a lease without obtaining adequate financing for your business, receipt of a Municipal Zoning Certificate and resolving building issues (see codes and permits). Verify the space is zoned to include your type of business. If not, work with the municipality to rezone the space or find another location Receive Certificate of Occupancy (usually distributed when all work is completed in building/space) – provided by the municipality to allow you to occupy space
Action – Codes, Permits & Zoning •
•
• • • • •
Municipality or Unincorporated Lake County** o Check with Municipality or County for certificate of occupancy or any zoning issues (ensure property is zoned correctly for your type of business). Request a meeting with code enforcement officer to review your site and plans. Obtain items needed for submission for review committee (ensure you know when the meetings are held, by what date items are needed to be placed on the agenda and length of process to seek approval) Architectural plan Building permits Application Any special installation items (sprinkler and fire suppression systems) You may need to attend/address a municipal committee meeting. The following are committees that you may encounter: o Business and Economic Development Committee o Design Review Commission o Zoning Board of Appeals o Plan Commission
**Lake County Planning Department may become involved in permitting issues, if your business will be located in unincorporated areas throughout Lake County. Action - Signage • • •
Follow instructions under codes and permits to ensure sign complies with municipality Investigate cost associated with signage Ensure name on sign represents product selling, not just name of business (don’t let potential customers guess what type of store you have)
Action - Compliance Ensure space is in compliance with the following (there may be multiple visits from code enforcement) • • •
• • •
Fire safety Illinois Accessibility code Alarms o Smoke o Intruder Number of parking spaces Outside storage Final inspection from the municipality
Action – Leasehold Improvements When Hiring Contractors ensure the following: • • •
Licensed with state Licensed with municipality Positive referrals
• •
Contract is in WRITING with quote of cost What FEES are required to municipality
Action – License/Permits License/Permit(s) will need to be obtained from the municipality to do work on the following: • • • •
Construction Fire prevention (alarms and sprinklers) Tree removal (check Tree Preservation Ordinances) Fence installation/removal
• • • • •
Lawn/sprinkler installation Parking lot construction Demolition Earth moving Elevator installation
• • •
Food/vendors Amplification Signage for event
Grand Openings/Special Events • • • •
Security Obstruction of sidewalk Tent Raffles
Other Requirements •
If YOUR business has special regulations governing it, please contact o IL Department of Agriculture for food and health safety o IL Environmental Protection Agency for environmental concerns o Lake County Health Department for food, health safety and welfare
o
Solid Waste Agency of Lake County (SWALCO) for disposal issues
If you plan to open Restaurant If you plan to open a restaurant, there are specific health and safety regulations that must be addressed. Please ensure that you obtain • • • • • • •
Health and safety certificate Occupancy permit Licenses for food handling Fire department review Liquor license, if wishing to sell and/or serve alcohol Outdoor dining Speak with your attorney and/or accountant for assistance
If you plan to sell or serve alcohol, obtaining a liquor license will take, at minimum, 2 months, if you are approved. You will need to pass a thorough background check, including proof of US citizenship If you plan to open a Day Care If you plan to operate a day care, contact: • • •
The Department of Children and Family Services for licensing The Women’s Business Development Center for assistance in growing your childcare business (classes and business plan assistance) The YWCA of Lake County for classes and local client resource and referral network
If you plan to open a Non-profit Business If you plan to operate a non-profit business/organization, contact: • •
The United Way of Lake County for assistance with Board development and one-on-one staff consultation The Donor’s Forum for foundation information and grant-writing classes
Important Note – at this time there are no federal, state or local grants to start a small business
Additional Help If you need explanation of business concepts, please review the How-to section (link to how to’s for starting a business on website) For further information about locating a business in a certain municipality, contact one of the following: • •
Chamber of Commerce Individual Lake County Communities