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Qualifying for a small business loan

Some small companies in Ohio may be able to qualify for Certified Development Company/504 loans from the U.S. Small Business Administration as long as they meet certain requirements. This type of debt financing may be used to expand or improve a company's operations through the purchase of real estate other than rental properties, equipment or another approved business asset.

To qualify for a CDC/504 loan, the SBA requires businesses to operate as for-profit companies and is doing business in the United States. Though a small business owner must be able to show that they will have the ability to repay the loan using their company's projected cash flow, the business owner must also be able to demonstrate that the company has had an average annual net income after taxes of less than $5 million for the past two years.

Pitfalls to avoid with online business opportunities

Starting an Internet business is something that many Ohio residents have considered, and tales of billionaires barely old enough to shave can be compelling. However, the rules of commerce do not magically disappear because transactions are completed online, and virtual businesses must pay their bills and win customers just like their brick-and-mortar counterparts. Any individual thinking about paying for a business opportunity would be wise to remember the principle of caveat emptor, but this is especially true of online ventures.

While there are no doubt solid Internet business opportunities on the market, many promise far more than they can ever deliver. These less reputable opportunities attract interest by offering the ability to work from home and avoid much of the hard work involved in building a traditional business, and they often cite the Internet as a medium that makes success all but assured. However, sure things do not exist in the real world, and entrepreneurs would be wise to follow the accepted rules of business planning.

What is the CAN-Spam Act?

Ohio businesses that use email for advertising or to promote commercial services or products need to be aware of the CAN-Spam Act as violations of the act can result in fines of $16,000 for each email in violation of it. The act does not prohibit the commercial use of emails, but it does prohibit such emails from being written and sent in certain ways.

The main requirements of the CAN-Spam Act are easy to adhere to, so compliance is not difficult. Businesses are forbidden from using deceptive or misleading information in the "from" and "to" lines of the emails, and the person or business sending the email must be clearly identified. Similarly, subject lines of emails cannot be deceptive and must reflect the email's content.

Shareholder lawsuit against Blackberry dismissed

Ohio residents may be interested to learn that a shareholder lawsuit filed against Blackberry was recently dismissed. The lawsuit involved allegations that the company had artificially inflated its stock price by misleading its shareholders about the popularity of the Blackberry 10, which was launched in January 2013.

Designed to help recapture market share the company had lost with the surging popularity of Apple's iPhone and Samsung's Google-powered Android devices, the Blackberry 10 failed to sell as projected. Although the phone received positive reviews, sales were low, leading to a $930 million writedown for unsold inventory that caused Blackberry's shares to tumble by one-sixth in value in a single day.

Errors for small business owners to be cautious of

Ohio individuals who are considering starting a small business should try to avoid a few legal pitfalls. One is failing to make sure that there is not already a trademark on the name they have in mind for a business or product, as this can lead to a lawsuit.

Another error is failing to separate business and personal matters. Two things need to be done to ensure this separation. One is creating the business as a separate legal entity. Consultants, independent contractors and other one-person businesses with no storefront may think that this is not necessary, but in 2013, more than 40 percent of small businesses were the target of a threatened or actual civil lawsuit. Even if a business is successfully sued, if it is a separate legal entity, the owner's personal assets will not be vulnerable.

The difference between a partnership and joint venture

Ohio residents who are planning a new business venture may want to consider whether a partnership agreement or a joint venture agreement is appropriate. The main difference between the two types of partnerships is the length of time the partners expect to be engaged in business with one another. This is something that is usually determined during the business planning stage.

In other words, a joint venture is the appropriate choice for short-term ventures and partnerships are the best choice for long-term business ventures. In most cases, the lifespan of a joint venture is between five and seven years. Once the project is completed, the joint venture is dissolved. However, the joint venture is structured, the partners share the costs, risks and profits equally. A partnership is the appropriate choice for an enduring venture that is not expected to end.

Employee contracts may help both employer and employee

As some Ohio business owners may know, businesses may offer employment contracts when hiring new employees. This provides assurance to both the employee and the employer that certain aspects of the relationship are tangible, regarded as nonnegotiable or unable to be changed without cause.

Whether a company is large or small, the company may deliver unique services or products to its patrons. Protecting the exclusivity of the company's trade secrets may be accomplished in part by an employee contract that prevents an employee from using such information or customer lists for his or her own gain.

Determining co-founder equity in startups

Arriving at a fair equity split for co-founders of a startup company in Ohio can be difficult, but considering different factors could help. Perhaps the most important factor is what positions the partners are going to fill in the new company. A CEO has more responsibilities than a consultant or other non-key executives, so that person should have a greater equity interest in the company.

There are other important factors, such as how much a partner has already contributed to the startup company. This may include contributions of financial capital, promoting growth in the startup or mentoring. That person should ideally be rewarded with additional equity. So should the pivotal contributions of the partner who came up with the original idea for the startup. If one partner gave up a high position, large salary and guaranteed pension to work on this startup, this arguably deserves to be recognized with additional equity over a partner who was unemployed.

The purpose of business liability insurance

Entrepreneurs and business owners in Ohio might benefit from understanding more about the liability insurance available for many small businesses. Depending on what assets the business owns, conducting an operation without liability insurance may be quite risky. Sole proprietorships with personal items tied to the enterprise may be at a greater risk since assets like vehicles and homes can be confiscated through civil action. Even though incorporated businesses are less exposed to this risk, their assets may still be targeted in a lawsuit.

The liability insurance that a business is required to possess typically depends on the industry they operate within. An umbrella business owner's policy typically groups liability insurance alongside different types of coverage. General liability insurance is designed to cover negligence claims. These policies may provide coverage for product liability issues, court costs, legal expenses, property damage, medical costs and bodily injury.

How to open a new business in Ohio

Starting a new business can be a unique and exciting challenge. However, there are a few steps that all companies will go through as they get ready to start doing business. First, a company will generally want to create a business plan as this will help guide the decision making process of the company moving forward. It will also serve as a guide that can help investors determine if they want to provide financing for the company.

After a business plan has been written and financing is obtained, a company may have to determine its business structure. For instance, a company could decide to operate as a sole proprietorship because it requires less paperwork, but it could also opt to do business as a corporation, which may offer some tax benefits for owners of the company.

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