Some of the top ten problems:  operational inefficiencies, out of control growth, poor accounting and owners who cannot get out of their own way.

Check out Goltz’ Top Ten Reasons Why Small Businesses Fail and see if any of the top ten apply to your small business.

The IRS’ own description of this resource states:

“This calendar is filled with useful information to help you start up and tend to your small business concerns. Tax reminders and instructions are shown by date.  There are also highlights of various tax topics related to small businesses provided in the calendar. In addition, the calendar also provides Tips for Business Success, a list of Forms and Publications, and a list of online resources and tools available for small businesses.”

Although the actual calendar has been out of stock the past few weeks, an online version is available.  I’ve already printed out my copy!

The Internal Revenue Service maintains a Small Business and Self-Employed Center section on its website dedicated to providing tax help and information to small business owners and sole proprietors. The site  links to workshops designed to help small business owners understand their federal tax responsibilities.  If a small business owner is unable to attend a workshop in person, virtual workshops are available in both DVD and streaming media formats. Locally in October free courses are being offered at the Patchogue Library, including how to start and grow your own business, how to write a business plan and for more advanced business owners, how to market or franchise your small business.

The IRS Small Business Center also  has a helpful tutorial designed to help small business owners determine if people providing services to you are independent contractors or employees.

Additionally, there is a dedicated section for information new business owners need to know about federal taxes.  The site includes information on recordkeeping, selecting an accounting method, establishing a retirement plan and suggestions on how to choose a tax year.

Both sites feature a link to an online classroom that includes audio and video presentations, a tax calendar and a tutorial on how to recognize and avoid tax scams.

If you have any questions about taxes prior to starting a business or changing the form of your business entity, the IRS.gov website is a good place to start your research.

The SBDC is administered by the State University of New York (locations are usually campus-based) and funded by the U.S. Small Business Administration and New York State.  While the SBDC emphasizes counseling and training services to women, veterans, minorities and those with special needs, its programs and one-on-one counseling services are available to everyone.

All SBDCs offer free counseling by professional business advisors. Services range from answering startup and business structure questions to assisting with business plans, cash flow projections, marketing plans, and loan information.

Upcoming training courses at the Farmingdale center range from Business Basics ($15), How to Write a Business Plan ($15) to a 5-part series on setting up, navigating and tricky transactions for a Quickbooks account ($40 each or $150 for the entire series).  I’m planning on attending the Quickbooks series, so if you’d like to meet me, sign up!

The StonyBrook center is offering a free 5-series Contract Readiness Program and an OSHA Construction Safety course ($30).

The Farmingdale center also offers two free publications, Business Basics and A Business Plan Guide through the website.

If you are not located on Long Island, there are SBDCs located throughout New York and the rest of the United States.

Health Insurance

While a number of private insurance companies offer health insurance for sole proprietors, New York has a special program, Healthy New York, that aims to promote and provide affordable insurance coverage to both sole proprietors and small businesses  that do not currently offer health insurance to their employees.  To apply for the program, click on the following link:  Healthy New York Application for Individuals and Sole Proprietors.

Additionally, the New York State Department of Insurance compares health insurance programs from several companies in this chart.

Disability Insurance

Basic disability insurance is used to replace the owner’s income in the event of a disability.  This type of insurance is often ignored despite the risk of becoming disabled being far higher than the risk of dying prematurely.

Another type of disability insurance known as Business Overhead Expense Insurance  is designed to allow a small business to stay viable while its owner recovers from a short-term disability.

Other potential disability insurance options to consider are policies that help fund the buyout of the disabled owner’s share or insuring an employee if the business is dependent on the skills of that key person.

Life Insurance

A sole proprietor life insurance policy specifically deals with what will happen to your business in the event something happens to you.  Life insurance helps to ensure that your family will not be responsible for the debts of the business and will help to avoid a forced liquidation to pay those debts.

Life insurance is also the most efficient way to fund a buy/sell agreement in a closely held corporation, partnership or LLC.  A buy/sell agreement is a contract among business owners that allows the other owners to buy the deceased person’s interest in the business.

Unemployment Insurance

If you have one or more employees, you are required to carry unemployment insurance in New York.  A useful publication is the Employer’s Guide to Unemployment Insurance, Wage Reporting and Withholding Tax.

A sole proprietor without employees is not required to pay unemployment insurance taxes on his/her salary, but a stockholder/employee of a corporation must.

Workers’ Compensation Insurance

If you have employees in New York, you are required to obtain workers’ compensation insurance from either an insurance carrier authorized by the New York Workers’ Compensation Board or you may self-insure if authorized by the Board.  The cost of this insurance must be borne entirely by the employer. This coverage is not required for a sole proprietor with no employees.  It is important to know that a sole proprietor with employees is not automatically covered but must elect to be included by filing a Form C105.32.  This form must also be elected by partners and members of  an LLC or LLP.

Property and Casualty Insurance

All small businesses, including home-based businesses, should carry property and casualty insurance in case of loss for inventory, equipment and potential injuries to customers, vendors and employees.

The above list is not intended to be complete.  Your small business may have specific requirements that depend on the type of business (for example, malpractice insurance is certainly high on my list of necessary insurance coverage).  If you have any other suggestions, please feel free to contact me or comment below.

Those impossible to understand legal terms are the ones that will get you into the most legal trouble.  Not understanding what you are signing may lead to very expensive lawsuits and settlements.

Guest blogger Jonathan Ezor has started a series over at BusinessWeek.com entitled Demystifying Legalese in Contracts.  This week he gives a clear, concise explanation of the choice of law and forum clause.  As he explains, the choice of law clause tells the small business owner which state’s laws will be used to interpret the contract.  The forum clause tells you in which state your dispute will be heard.  In other words, you might be forced to defend a lawsuit in a state different than the one your business is located in.

Once you understand what you are agreeing to, you or your small business attorney can negotiate more favorable terms.  Don’t assume that just because the contract is on a standard or pre-printed form that it cannot be negotiated.  Once you understand what you are signing, you will know how to reach the best agreement for both parties.

One of this week’s posts, Unfinished Business,  relates the story of writer Jay Goltz’s cousin, the owner of a small accounting practice who died after a short battle with cancer.  The story is a very personal one, but holds lessons for every small business owner.

While business succession plans can be very important planning tools, not every small business owner has a business which can be sold or passed on to family members.  However, the author makes a great suggestion, one that applies to each and every one of us.

Goltz suggests creating and annually reviewing a disaster plan to  include information such as bank account numbers, passwords, and  insurance policy information.  I would suggest including contact information for any people or companies important to your small business–your lawyer, accountant, vendors, suppliers.

Goltz includes a list of possible succession alternatives for his business.  And since you are creating the disaster list to relieve stress and confusion at  a time when your family may be in no emotional condition to make major decisions, he includes a “get out of guilt free” card so his spouse and children don’t feel obligated to carry on the business because they believe it is what he would want.   I know in my own life, I heard my Dad express regret many times about giving up his small jewelry store to take over my grandfather’s  physically demanding, struggling business after my grandfather died suddenly.

This is a call to action.  Sit down with a pad and a pen, or at your computer, and start making your disaster list now.  Your family will thank you for it.

Feel free to post any suggestions you might have to add to this disaster plan for small business owners.  What would your family need to know in the event of an emergency?