Palius + O’Kelley, LLP teamed up with Formations Solutions to give a free seminar for those brave entrepreneurs who are courageous enough to start a business during the “Great Recession”, on Monday, May 17th. Speakers included Tony Vallejo and Monique Bunstone of Palius + O’Kelley, LLP, and Matthew Burgess of Formation Solutions.
The event was sponsored by the Goleta Valley Chamber of Commerce and SBEntrepreneur.com, covering entrepreneurship in the Santa Barbara area.
The seminar had a nice turnout, and guests posed some really great questions for the panelists about the “red tape” that one has to go through in order to start a business. The information given was fresh, helpful, specific, and truly gave attendees the right tools to start a business.
Also available to address legal questions was Peter Muzinich – Attorney with Rogers, Sheffield & Campbell, LLP in Santa Barbara.
The highly qualified panelists covered the following topics and much more: choosing a business entity to fit your needs, the importance of creating a marketing strategy, protecting your personal assets, bookkeeping, payroll, and cash planning and forecasting. New business owners furiously took notes, were not shy to ask questions, and left with a “To-do list” for the steps they will need to take in the following weeks and months to come.
Highlights and Summary for Each Panelist
My favorite quote from Matthew Burgess was, “They say you can’t be half pregnant. But you most certainly can be half formed as a business entity,” meaning that there are so many steps that have to be taken to file your new business with the government, that it’s easy to miss something along the way, especially if you’re doing it yourself.
The other way we’ve seen companies “half formed” is when entrepreneurs have chosen a cheap online service firm that sells the mistaken idea that you can form a new corporation for $139.
They will certainly sell you something for $139, but what they offer for that price is likely only a small fraction of the many steps needed to properly form and be in compliance with city, county, state and federal agencies.
Burgess emphasized the importance of finding and using a good CPA and attorney, when making the initial decisions that will determine how your business will be operated, in order to ensure that you’re doing everything correctly. It is much easier to do things the right way, in the beginning, rather than having to hire someone later to fix mistakes that were made initially.
Matthew also gave some great tips like, “the California Secretary of State’s turnaround time to process new Articles of Incorporation and Organization has gotten longer with budget cuts that have forced the closure or consolidation of several regional offices.”
Apparently the turnaround time for incorporation paperwork has recently extended from 5-7 days to 29 days. “We have the relationships with the Secretary of State’s office that will expedite this somewhat, but in general, you should plan ahead and expect a long wait to form.”
He also explained that most cities have different criteria to obtain business licenses, and it’s important to research the requirements carefully. “You wouldn’t imagine it for something as simple as a business license, but as it turns out, there is a fair amount of nuance in what is required from city to city.”
Tony Vallejo covered the following vital topics he encourages every new business owner to consider:
- Payroll Taxes
- Cash planning and forecasting for both short and long-term goals
- Building relationships with lenders in the early stages of your business, so they get to know and trust you
- Insurance for the unexpected: natural disaster, business interruption, theft
- Places to find information on the web, including the Goleta Chamber of Commerce, and POK’s own New Business Startup Book
Tony also stressed the importance of having a marketing plan, and making it work for you: “It’s easy to put off marketing because it’s not writing you a paycheck. But ultimately, this is how you’re going to gain business.”
Monique Bunstone first outlined the various types of business entities, and the pros and cons of each one: partnerships, corporations and LLCs. In order to start your own business, it is strongly recommended that one chooses one of these business entities, mainly for the purpose of protecting your personal assets. She states that it is a good idea to talk with a CPA or an attorney to figure out which kind of business entity is going to be most beneficial to your particular business model, and save you time and money in the long run.
Monique’s experience with business owners who did not initially hire a bookkeeper, or were not diligent about keeping track of finances led her to her last point: “It is critical that you do your bookkeeping well from the beginning, rather than the much more costly option of having to have someone clean up your books.” Both Tony and Monique agreed that there are many bookkeepers available in the Santa Barbara area, whose fees are very reasonable.
Overall, this was an incredibly informative event for those Santa Barbara area entrepreneurs who attended. We at Formation Solutions wish all of you entrepreneurs out there the very best in your business pursuits!