032106 Start Business
An Interactive Guide to Starting a Business in Virginia Beach
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Welcome Future Entrepreneurs of Virginia Beach!
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Americans are by nature independent. Even before we became the United States of
America and the Commonwealth of Virginia, individuals who settled here started
businesses. Today, hundreds of years later, small businesses are the heart of the
American - and the Virginian - economy. The American economic system, the number
of opportunities in eastern Virginia, and the wealth of resources available to help small
businesses, combine to make starting a business an achievable dream.
If you are serious about starting a small business, this guide should get you started. It is
designed to answer your questions and direct you to agencies and people who can further
assist you.
To make the most of this guide, view it on a computer with access to the Internet. If you
do not have Internet access, you may visit your local library for free use of the
Internet.The Central Library is located at:
Central Library
4100 Virginia Beach Boulevard
Virginia Beach, VA 23452
757-385-0150
Ready to Get Started?
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Step One: Getting Started
Research
Research is for your business what the four food groups are for your body: it is fuel; it is
nourishment; it is essential for health and growth. Before starting a business, the
entrepreneur needs to prepare a business plan. Before preparing a business plan, the
entrepreneur needs to do a little homework, otherwise known as research. Research
provides the "what," "where," and "how much" that every business owner needs to know
to be successful. Keep up with your homework, and the whole process of starting and
running a business will go much more smoothly. Your research will also create the
foundation for all financial projections that you will make related to your business. Do a
thorough job conducting your research and you will create a sound foundation for your
future financial projections and for the future health of your business.
What? Where? How Much?
The first thing an entrepreneur needs to determine before starting a business is:
What Do I Want to Sell? (Return to top)
If you have already decided what you are going to do, click here to skip this section.
Look at your interests, your past experience, your skills. Make a list. For example, if you
spend your weekends taking car engines apart and putting them back together, perhaps
you could operate a successful auto repair shop. If your whole family raves about your
cooking, you may want to consider opening a catering business. If you have a knack for
creating beautiful flower arrangements, consider becoming a florist.
If you need help coming up with ideas for your business, you may want to visit your local
library. Ask the librarian for assistance in finding a helpful book or magazine. Here are
some ideas for books:
201 Great Ideas for Your Small Business: Revised &
Updated Edition, by Jane Applegate
Turn Your Talents into Profits: 100+ Terrific Ideas for
Starting Your Own Home-Based Microbusiness, by
Darcie Sanders and Martha Bullen
What Color is Your Parachute, by Richard Nelson Bolles
The 100 Best Businesses for the 21st Century, by
Gregg Ramsay and Lisa Rogak
Here are some web sites that might help you come up with ideas for your small business:
http://www.businessownersideacafe.com/
This website offers ideas, marketing, legal, business forms, free trade publications;
business finance, coffee talks with experts and more.
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http://www.businesstown.com/businessopps/newbiz.asp
Lists small businesses you can start for under $1000.00 to $40,000.00
http://www.startupjournal.com/columnists/
Wallstreet Journal Center for Entrepreneurs - ideas, financing, franchises, business
management and business news.
http://www.entrepreneur.com - This is the web site for Entrepreneur magazine.
http://www.sba.gov/library/pubs.html- This site will take you to the U.S. Small
Business Administration's on-line reading room. Peruse this site for articles related to
developing an idea for a business to start.
http://www.sbomag.com - This is the web site for Small Business Opportunities
magazine.
The Next Step
Once you know what you want to sell, the next step is finding out as much as you can
about your chosen business. Skipping this step is like building a brick house without
mortar. The research you complete here will help you determine sales and income
projections, the size of your market, and facts about your competition. In the United
States, all types of businesses are classified with a number. This classification system is
called the North American Industry Classification System, or NAICS. Formerly it was known
as the Standard Industrial Classification (SIC) system. The NAICS classifies 1,170
industries, of which 565 are service-based. It is very specific in its classification. For
example, a search using the word "food" produced forty-three matches, ranging from
"Food Service Contractors" (number 722310) to "Food Machinery Repair and Maintenance
Services" (number 811310). Each match is broken down even further. Select "Food Service
Contractors" and the classification is broken down into seven more specific categories
ranging from "Airline Food Service Contractors" to "Industrial Caterers." For more
information about NAICS codes, visit the Small Business Administration site's relevant
pages: http://www.sba.gov/size/indexsize.html#Introd uction.
To find out the classification number for your business, go to the U.s. Census Bureau's web
site (http://www.census.gov/epcd/naics/framesrc.htm). You will be prompted to enter a
word related to your business. For example, if you want to manufacture garden furniture,
you could enter "garden." From the list of businesses with "garden" in the description,
there are three related to "garden furniture." Once you know the NAICS number assigned
to your business, you will be able to find out a lot of information about your specific
industry.
To find out more about your industry once you know your NAICS number, go to the part of
the Census site that contains data from the economic census
(http://www.census.gov/epcd/ec97/us/USOOO.HTM). On this page, you can find
information such as the number of retail trade establishments in your area. At the top
right-hand side of the page, there will be a drop-down box from which you can select a
location in which you are interested. Then once the data appears, click on the arrow
located on the far left in the row next to the category in which you are interested. Clicking
this arrow will make your search more specific. Continue clicking the arrow until the
industry you are interested in appears.
Who Will my Customers Be? (Return to top)
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Once you know what product or service you want to sell, you will want to find out who will
buy it. Years of experience may have given you an excellent idea of who your customers
will be. For example, if you are opening a shop that sells designer wallpaper, you may
know that your customers have higher incomes and own their own homes. If you don't
really know who might be interested in what you are selling, do some homework. In both
cases, once you have a general idea about your customers, you will want to find out their
specific characteristics and where they can be found.
Decide what you know.
The first step of all research is to write down what you already know. So write down what
you now know about your customer. The next step is to write down what you don't know.
You know that the customers for your designer wallpaper shop have higher incomes and
own their own homes. You don't know their age, their race, the neighborhoods they live in,
their religion, their education level, etc. What might motivate them to buy your product?
So make a list, and then find the answers to these questions.
How?
Determine what information is already available. Much of the information you seek is
probably on-line, on this CD, in a book, in a magazine or in some other resource available
through your local library. This information is called "secondary data." Industry and
Employment projections for the City of Virginia Beach, provided by the Virginia
Employment Comission, is available by clicking here. Demographic information about
Virginia Beach residents may be accessed from the u.s. Census site by clicking here. For
additional demographic information about Virginia Beach or another county or city, please
check out this link provided by the U.S. Census: http://censtats.census.gov/cgi-
bin/pct/pctProfile.pl. You may also go to the section of this CD titled "Local Information" to
find specific information relating to the City of Virginia Beach and its residents. For other
web sites that may lead you to the data you seek, check out "Helpful Links," which are
included in a box near the bottom of this page.
If the information you need is not currently available, you can gather it yourself. If you're
opening a designer wallpaper shop, stop by the designer wallpaper shop in the neighboring
town and see what its customers look like. Develop a brief survey and take it to an area of
town where people who would purchase your product shop, live or congregate. Ask the
questions on the survey to some of these people to gauge their interest in your shop. Offer
coupons for a discount in your store (once it opens) if they answer the questions. You may
also direct your survey questions to people on a random basis.
For an example of a survey designed to gain information about your customers, click here.
Surveys can be used to find out more than information about your customers. You can use
them to help you price and market your product or service and to find out more about the
competition, as well. For an example of a brief market survey, click here.
Another way to increase your understanding of your potential customers is to form a "focus
group." Gather together a small number of people whom you think may be interested in
your business. Ask several open-ended questions and encourage a discussion. Take notes.
The type of information you gather from this kind of research is known as "primary data."
For more ideas on gathering primary data about your customers, visit:
http://ollie.dcccd.edu/mrkt2370/Chapters/ch3/3prim. htm I
Who Are my Competitors? (Return to top)
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Before deciding where to locate your
business, you will want to find out about
your competitors. Who are they? How many
are they? Where are they located? Although
there are exceptions, you probably will not
want to locate your small business close to
someone who would be in direct
competition with you.
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Finding out as much as possible about your
competitors will help you in many ways. You
may be able to avoid mistakes they made.
You will gain information that will help you with decisions about where to locate your
business, what to charge for your products or services, and ways to advertise your
business.
How do I find out about my competitors?
If you have completed research about your industry and about your customers, you have
already done some of the necessary homework for finding out about your competitors.
Industry research will let you know, for instance, how many other businesses like yours are
operating within your city or county. Customer research will guide you to where your
potential customers are shopping and why. As part of your competitor research, you may
want to ask potential customers survey questions geared to discover information about the
competition. If they currently use products or services like yours, where are they buying
them? What are they paying for them? What do they like and dislike about your
competition?
Once your industry and customer research enables you to identify your competitors,
visit their web sites (if they have one). You can learn a lot from a visit to your
competitors' web sites. For instance, they may have information about prices, services,
locations and contact information. The look and features of the web site itself will give
you an idea of your competitors' professionalism and possibly his or her resources as
well.
After visiting web sites, you may want to call your competitors directly to find out more
about them. Ask the kinds of questions a customer would: questions about the prices they
charge, the types of products and services they sell, turnaround time for service, etc. If
your competitor has a shop, visit it for ideas about products and advertising.
Another way to find out about your competitors is to talk to other business owners who
have had dealings with them. What type of service did they provide? What were the pros
and cons of working with them?
Here are links to web sites that provide information about researching your competitors:
http://www.usabilitynet.org/tools/competitoranalysis.htm
http://www.robertwinton.com/competitor.htm
Where Should I Locate my Business? (Return to top)
Congratulations. If you have conducted research on your industry, your potential
customers and your competitors, you have completed much of the homework you should
do before deciding where to locate your business. For instance, if you find out from your
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research that your customers are only willing to travel fifteen miles out of their way to visit
your shop, you will want to open it close to a neighborhood where many prospective
customers live. If you are opening a donut shop, you will probably want to make sure you
do not open on the same street as a nationally known donut shop.
Additional things to consider when deciding on a location include taxes, laws and permits,
roads and facilities, incentives that might be offered to new businesses, access to
interstates, availability of warehousing, and complimentary businesses located nearby. For
instance, a shop selling wedding dresses might do well located close to a bakery selling
wedding cakes. Another consideration is the cost of operating in a certain area related to
the benefit. For example, perhaps your business does not need to be located in a high-rent
mall. Keep in mind alternative locations for businesses.
And, of course, many choose to run their small businesses from home. If you decide to
operate from home, make sure you will be able to meet any county and state regulations
related to running your particular home-based business.
Here are links to web sites that provide information about choosing a location for your
business:
http://www .uschamber.org/sb/sbresources.asp?p= p04/P04_1200.asp
http://www . uschamber.org/sb/sbresources.asp?p= p04/P04_07 50.asp
Virginiascan Commercial Real Estate Database
http://virginiascan. yesvirginia .org/Site_Selection/PropertySearch .aspx
How Do I Finance my Business? (Return to top)
You have a great idea for your business and you have found the best place to locate it. You
know who will buy your product or service and you know who your competitors are. But
starting and running your business is going to take cash, possibly a lot of cash.
Working capital, otherwise known as cash, is the oxygen that keeps your business
breathing. Without enough working capital, your business's vital functions will fail. It won't
be able to meet its daily requirements for living, such as purchasing supplies, paying rent,
and paying salaries. In a word, before creating your business, make sure you will have
enough money to keep it alive. The NX Level Guide for Business Start-ups (February 2002)
states that inadequate capital is the most common reason given for the high failure rate of
small businesses.
Where are you going to find the funds to start and run your business successfully?
There are several steps to take to ensure that your business will have enough capital to
start and continue running.
1) Complete your Business Plan
The Business Plan includes a section about Financial Matters. Within this section, you will
tabulate financial data and projections related to your business.
The Financial Plan portion of the Business Plan includes: a) Start-up Expenses; b) An
Estimate of Future Sales; c) Estimated Cost of Units Sold; d) Fixed and Variable Expenses;
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e) Cash Flow Projections (very important); and f) A Break-Even Analysis.
2) Determine how much capital you will need to start your business and to keep it running.
Based on the estimated projections contained within your Business Plan, you will be able to
determine how much money you will need, both to start your business, and to keep it
humming.
3) Determine how much cash you have available through personal sources that you are
willing and able to use to fuel your business. (Personal sources include: savings accounts,
insurance policies, stock and other investments, second mortgages, and donations from
friends and relatives.)
4) Figure out how much money you will need for the business after you have contributed
all of the personal funds that you are able and willing to contribute.
5) Find a source for the remaining needed funds. Other sources include:
a. Debt. Debt is a loan made to you or your business. Sources of debt lending
include banks, credit unions, federal lending programs and state financing
programs.
b. Equity. Equity is ownership rights and privileges in your business that you
give away in return for capital. Businesses seeking this type of financing must
become a Partnership, Corporation or Limited Liability Company.
c. Alternative Funding. Alternative means of funding include: suppliers who
provide concessions, such as extended payment periods and discounts; and
grants.
6) Prepare a Written Financing Proposal.
The Financing Proposal is used to secure loans and equity financing. Before preparing the
Financing Proposal, complete the Financial Plan portion of the Business Plan. This section of
the Business Plan will contain much of the information and data you will need for the
Financing Proposal. The Financing Proposal contains the following: a) Cover Letter; b)
Summary (contains the purpose of the financing, amount and terms requested, how the
funds will be repaid, and collateral); c) Details on how the capital invested or loaned will be
used; d) Details on Collateral (if seeking a secured debt); e) Information on the financial
return for investors (if seeking equity financing); and f) Your prepared Business Plan
(Financial data and projections are particularly important).
If you follow the steps above, you will equip your business with the cash it needs to
breathe, both at its creation, and into what will hopefully be a long life.
For additional information on financing:
http://www.sba.gov/financing/basics/basics.html(Small Business Administration)
http://www.mymamasaid.com/save/article/106/ (Tips on Financing)
http://www.dba.state.va.us/financing/ (Virginia Small Business Financing Authority)
http://www.mycapsource.org/ (Capital Source)
Innovative Bank (specializes in loans for small and mid-size businesses)
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http://www.redcfinance.org/ (The Richmond Economic Development Corporation)
http://www.ccdi-va.net (Center for Community Development, Inc.)
Programs and Incentives for Minority and
Women-Owned Small Businesses (Return to top)
Minority and women-owned small businesses face unique challenges. Fortunately, there
are many programs geared to help them meet these challenges and succeed.
What is a Minority Business Enterprise?
The United States Small Business Administration (SBA) defines the demographic group that
includes minorities as "socially disadvantaged" and defines that description within its web
site as:
"Socially disadvantaged individuals are those who have been subjected to racial or ethnic
prejudice or cultural bias because of their identity as members of a group. Social
disadvantage must stem from circumstances beyond their control. In the absence of
evidence to the contrary, individuals who are members of the following designated groups
are presumed to be socially disadvantaged:
. Black Americans;
. Hispanic Americans;
. Native Americans (American Indians, Eskimos, Aleuts, and Native Hawaiians);
. Asian Pacific Americans (persons with origins from Japan, China, the Philippines,
Vietnam, Korea, Samoa, Guam, U.S. Trust Territory of the Pacific Islands (Republic
of Palau), Commonwealth of the Northern Mariana Islands, Laos, Cambodia
(Kampuchea), Taiwan; Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei,
Republic of the Marshall Islands, Federated States of Micronesia, Macao, Hong Kong,
Fiji, Tonga, Kiribati, Tuvalu, or Nauru; Subcontinent Asian Americans (persons with
origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or
Nepal); and
. Members of other groups designated by the SBA."
For more information about programs and resources for minority and women-owned
businesses, please click here.
The Business Plan
You will be able to use much of the research you have completed when compiling and
writing your business plan. The business plan is the blueprint or map for your business.
Compare starting your business to going on a vacation. Your vacation will go much more
smoothly with a plan. What week is best for the whole family to be away from home?
Where do you want to go? How will you get there? Do you need a reservation? Will you
have enough money for the trip? Without putting forethought into the trip, you might
never leave your driveway. It's the same with starting a business. In order to have the
best chance of a smooth and successful venture, do some homework, consisting of
research, analysis and planning. A business plan greatly increases your odds of success.
This CD is designed to make the creation of your business plan easier. If you would like to
get started right now on your business plan, click here. Or continue reading if you would
like to analyze the research you have just completed.
I
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Helpful
ional, Vi inia and National (Return to top)
Regional Links
The City of Virginia Beach Department of Economic Development
http://www.yesvirginiabeach.com
Hampton Roads Economic Development Alliance
http://www.hreda.com
Hampton Roads Small Business Development
http://www.hrsbdc.org
SCORE (Counselors to America's Small Businesses)
http://www.scorehr.org
Tidewater Community College
http://www.tcc.edu
Virginia Links
eVA: Virginia's business-to-government Web-based e-procurement tool
http://www.eVA.state.va.us
Hampton Roads Chamber of Commerce
http://www.hamptonroadschamber.com
Hampton Roads Partnership
http://www.hrp.org
Hampton Roads Technology Council
http://www.hrtc.com
Small Business Administration (Richmond District)
http://www.sba.gov/va
Statistical Resources for Virginia
http://www.virginiaplaces.org/stats.html
U.S. Environmental Protection Agency - Mid-Atlantic Compliance Assistance
http://epa.gov/region03/oecej/smallbiz.htm
Virginia's Business Pipeline
http://www.virginiabusiness.org
Virginia Census Quick Facts
http://quickfacts.census.gov/qfd/states/51000.html
Virginia's Center for Innovative Technology
http://www.cit.org
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Virginia Department of Agriculture and Consumer Services
http://www.vdacs.state.va.us/index.html
Virginia Department of Business Assistance
http://www.dba.state.va.us/smdev /
Virginia Department of Minority Business Enterprise
http://www.dmbe.state.va.us/
Virginia Economic Development Partnership
http://www.yesvirginia.org
Virginia Hispanic Chamber of Commerce
http://www.vahcc.com
Virginia Secretary of Commerce and Trade
http://www.commerce.virginia.gov/
National Links
Government
Bureau of Economic Analysis, Survey of Current Business (related to business
activity)
http://www.bea.doc.gov/bea/pubs.htm
Equal Employment Opportunity Commission
http://www.eeoc.gov/employers/smallbusinesses.html
Export-Import Bank of the U.S.
http://www.exim.gov /
Federal Trade Commission
http://www.ftc.gov /
Franchise & Business Opportunities (Federal Trade Commission)
http://www.ftc.gov/bcp/menu-fran.htm
Legal and Regulatory Information for America's Businesses
http://www.businesslaw.gov
Minority Business Development Agency (U.S. Dept. of Commerce)
http://www.mbda.gov/
The Official Business Link to the U.S. Goverment
http://www.business.gov
Small Business Administration
http://www.sba.gov
U.S. Copyright Office
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http://www.copyright.gov
U.S. Department of Census
http://www.census.gov
U.S. Department of Commerce
http://www.commerce.gov /
U.S. Department of Labor, Bureau of Labor Statistics
http://stats.bls.gov /
U.S. Department of Transportation, Office of Small and Disadvantaged Business
Utilization
http:// osdbuweb.dot.gov /
U.S. Government Export Portal
http://www.export.gov
U.S. Government Web portal (information on small business development)
http:// www.firstgov.gov/Business/Business_Development.shtml
U.S. Patent and Trademark Office
http://www.uspto.gov /
Associations
Edward Lowe Foundation (information for entrepreneurs)
http://www.edwardlowe.org/
Entrepreneurs Organization
http://www.eonetwork.org
International Franchise Association
http://www.franchise.org
Latin Business Association
http://www.lbausa.com/
National Association for the Self-Employed
http://www.nase.org
National Association of Home-Based Businesses
http://www.usahomebusiness.com/
National Association of Small Business Investment Companies (financing)
http://nasbic.org/
National Business Association (for small businesses)
http://www.nationalbusiness.org/
National Association of Women Business Owners (NA WBO)
http://www.nawbo.org
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National Federation of Independent Business
http://www.nfib.com/cgi-bi n/ N FIB.d II / Publ ic/ SiteNavigation/ home.jsp
Service Corps of Retired Executives
http://www.score.org
Small Business Advancement National Center
http://www.sbaer.uca.edu/
The International Center for Assistance, Inc. (ICFA)
http://www.innovativebank.com
U.S. Chamber of Commerce
http://www.uschamber.org/default
Working Today (advocate for home-based businesses)
http://www.workingtoday.org/
Commercial
Dunn & Bradstreet
http://www.dnb.com
Free Advice.com (Business law)
http://business-Iaw.freeadvice.com/
International Wealth Success, Inc. (information on financing)
http://www.iwsmoney.com/
The Business Search Engine
http://www.business.com/
The World Wide Web Chamber of Commerce (site for Internet businesses)
http://www.webchamber.com/
Thomas Register (Company Profiles)
http://www.thomasregister.com/
Vantis Numerica (Information for International Entrepreneurs
http://www.vantisnumerica.com
Welcome Business USA (Resources for Entrepreneurs)
http://www.welcomebusiness.com/
Training Links
Center for Entrepreneurial Development at the Community College Workforce
Alliance, Verizon Entrepreneurial Resource Center, AdvanTech, 501 E. Franklin
St., Richmond, VA 23219; (804)521-4320; e-mail: businessinfo@ccwa.vccs.edu
http://www.CCWAsmallbusiness.com
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American Business Women's Association
http://www.abwahq.org
Center for Innovative Technology
http://www.cit.org/calendar.asp
Small Business Administration (on-line training)
http://www.sba.gov /training/
Small Business Administration (Richmond District)
http://www.sba.gov/va/
Tidewater Community College
http://www.tcc.edu
U.S. Department of Labor
http://www.doleta.gov/
Virginia Department of Business Assistance
http://www.dba.state.va.us/
Your final Decision: Analyzing the facts (Return to top)
If the word "Analysis" makes you shudder and recall hated classes in science or math:
relax. Analysis is just a way to make sense out of research. Analysis helps you figure out
the answers to the questions you had when you started your research.
Your Business Decision
Look at the list of things you wrote down before you started your research. If you were
uncertain about the type of business you wanted to operate, start with your list of
questions. Now look at what you wrote down about your skills, interests and past
experience. Compare your personal expertise and passion to information you gathered
about different industries and opportunities. By comparing your questions (what you didn't
know) to the answers (information you gathered during the research process), you should
be able to come up with a viable business that you would be both interested in starting and
qualified to start.
Your Customers
By looking at the secondary data and primary data (if needed) that you collected about
your potential customers, you will be able to get a clear idea of who will be interested in
buying your product or service. Knowing your customers will help you decide if your
business idea will work because you will know if you have enough buyers to be profitable.
Knowing your customers will also help you later when you put together a marketing plan
for your business. Click here to access a brief form. Once you fill it out, you should know
exactly who your customers will be.
Your Competitors
The information you gathered on your competitors is invaluable. From it, you can find ideas
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about what you should charge for your product or service, how you should market your
business, where you should locate your business, any area not addressed by the
competition in which you could specialize, and if the competition is too fierce in your
industry. If you decide that your industry is already choked with competitors, try to come
up with a niche or specialty, or start the research process again, choosing a different
business. Click here to access a brief form; it should help you put your research and
thoughts together about your competition.
Your Business Location
Again, your research should direct this decision. After completing your research, you will
know where your competitors are located; the cost versus the benefit of operating in
different locations; and any rules, regulations and incentives for locating in a certain area.
Armed with this knowledge, you can evaluate the pros and cons of different areas, and
decide where to locate your business.
What is my Business Objective?
Once you have found answers to your questions and studied your answers, you are ready
to set your business objective. Your objective is what you want to achieve. It is a mission
statement. For example, if you want to start a house cleaning business, your objective
might be to "offer affordable, reliable, high-quality cleaning services to families in the City
of Virginia Beach." From a main objective, you can then decide on short and long term
goals for your business, and the strategies you will use to reach them. Setting and
reaching these goals will be covered in the Marketing section of the Business Plan you will
write.
A Word About Marketing
After researching your industry, setting a business objective, choosing a location, and
finding out who your customers and competitors are, you are ready to do some preliminary
marketing analysis. A first step in determining how to market your business is to prepare a
SWOT Analysis. SWOT stands for "Strengths, Weaknesses, Opportunities, and Threats."
Based on your research, you should be able to list the strengths, weaknesses,
opportunities and threats that apply to your business. Armed with this list, you will be
better equipped to position your product or service in the marketplace. "Positioning" your
product or service means finding the right way to promote it, package it, price it, and place
(where to sell and distribute) it. A SWOT analysis is similar to making a list of pros and
cons before making a big decision.
Sample SWOT Analysis
Jane Taylor is opening a pet-sitting service. After
she prepares a SWOT analysis.
Strengths Weaknesses
her research,
*20-years of experience volunteering
with animal rescue groups;
*strong references
Opportunities
*No experience in accounting,
computers or other skills needed to run
a business
Threats
*People work long hours & travel &
need a reliable person to take care of
*The county in which she lives already
has two pet-sitting services, both
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their pets while they're away. Ifocused on the care of dogs and cats.
Analysis: Jane decides to market her pet-sitting service in a county adjacent to
the one in which she lives because the two most popular pet-sitting services in
the region do not operate there. Because many people in this county commute
45-minutes each way to Richmond to work, she believes they will need someone
to give their dogs a break while they are working. Jane also decides to expand
her business and offer care for horses, as well as house pets, since many of the
residents in this rural county own horses. Finally, she decides to hire a part-time
bookkeeper to maintain the business's records, so that she can focus on what
she loves: taking care of animals.
To complete your own SWOT analysis, click here.
Conclusion
Page 14 of 14
Analyzing the research data you collected will help you make decisions. If you wanted to
build a house, you would first think about the type of house in which you would like to live;
you would research neighborhoods and land prices; you would talk to architects and
contractors. You would do your homework. If you didn't, you would end up like the pig who
built the house out of straw. You would soon be homeless. Do your homework when
building a business: finish your research and analyze your findings. Your business will then
have a sound foundation. On this foundation, you can build the sturdy walls of a sound
financial plan to hold it together and the reliable roof of good marketing to protect it from
the elements. Then the wind and rain of competition, changing consumer demands, and
improper planning will not blow it to pieces.
........................................
Return to top
Go to next section: Step Two, Operating a Business
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Step Two: Operating a Business
Business Structure
Starting a new business requires making many decisions. A business owner is, by default,
a decision-maker. Fortunately, resources at the local, state and federal levels abound to
assist you with decisions related to starting and running your new business.
Decision: Business Organization
Once you know the type of business you wish to operate, you will need to decide on its
organization. Will it be a sole proprietorship, a partnership, a corporation, or a limited
liability corporation? Perhaps these choices sound confusing, but once you understand the
pros and cons of each, your decision should be easy to make.
The Different Types of Business Ownership
Sole Proprietorship (return to top)
Forming a sole proprietorship is the easiest way to start a business. In most cases, the
only step required is filling out a few simple forms. You will want to register the business
with your local government and conduct a search of your company's name to make sure
there are no other companies operating with the same name in your jurisdiction. A very
small fee is usually required for this service. For more information about what to bring with
you when you come into the Commissioner of Revenue Office to apply for your business
license, please click here.
To find out more about forming your sole proprietorship, contact the Virginia Beach
Department of Economic Development. You may reach them bye-mail at
ecdev@vbgov.com or by phone at (757) 385-6459. The Virginia Beach Department of
Economic Development web site is: http://yesvirginiabeach.com.
Sole Proprietorship Pros and Cons
Pros. The biggest advantages to a sole proprietorship are:
1) It is an easy way to start your business;
2) It is an inexpensive way to start your business.
Con. The biggest disadvantage to a sole proprietorship is:
The business owner (YOU) is personally liable for the business. This means that if a
disgruntled customer sued you, you could potentially lose your personal belongings, like
your house.
For additional information on starting a sole proprietorship:
http://www.nolo.com/lawcenter/ency/article.cfm/objectID/3FD 19141-DB91-4FCA-
BDB93416A4D05479
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http://www.mycorporation.com/Solprop.htm
Partnerships (Return to Top)
A business partnership is created when two or more persons agree, in person or in writing,
to start a business. To form a partnership, you will need to fill out the same business
license forms as those required for the sole proprietorship. The two main types of
partnerships are: General and Limited.
General Partnership
A general partnership is the easiest type of partnership to form. The only step required is
that you file to protect your trade name. This will prevent another business start-up from
using the name you have chosen. The Virginia Beach Department of Economic
Development can provide more information.
One additional step which you may wish to take if forming a general partnership is
preparing and signing a partnership agreement. Partnership forms should be prepared by
your attorney. For your convenience, a sample of a partnership form is included with this
CD and may be accessed by clicking here.
The biggest disadvantage to a General Partnership is that each partner is liable for the
whole business. To explain this, here is an example:
You and your friend Joe Smith form a business called Water Works that sells custom-
made plumbing fixtures. Unfortunately, Joe uses money set aside for the business to
fund his vacation in Florida. A month later, Water Works folds, but it owes its creditors
thousands of dollars. Joe is unable to provide any funds, so guess who is responsible for
these debts? You are. Even though the business is a partnership, if your partner(s) turns
out to be a deadbeat, you will be responsible for not half, but all, of the liabilities.
You are also responsible for any poor business decisions Joe may have made. Compare it
to a marriage. If your spouse buys a house in an unsafe neighborhood while you are away
on business, you are just as responsible for the house payments as your spouse is, even
though it wasn't your decision to buy the house.
Limited Partnership
A Limited Partnership is similar to the general partnership, with several major exceptions.
There are two actual classes of partners that make up the partnership: General Partners
and Limited Partners. General Partners have the same pros and cons as in a general
partnership above; however, each Limited Partner in a limited partnership is only liable to
the extent of his or her individual investment. Limited Partners have no say in the day-to-
day operations of the company; the General Partners actually manage the company. In
essence, a limited partner is an investor. In the case of the Water Works example above, a
limited partner's loss would only amount to the investment made in the company. The
company might fold due to one of the general partner's poor decisions, but a limited
partner would not have to bear financial losses above what was initially invested in the
business. However, general partners (those that manage day-to-day operations) may have
the same liabilities as under a general partnership.
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A limited partnership is a bit more complicated to start than a general partnership. In
addition to registering your trade name to protect it, you must file a Certificate of Limited
Partnership with the Virginia State Corporation Commission (http://www.state.va.us/scc/).
Various forms related to partnerships may be accessed via the State Corporation
Commission site at: http://www.scc.virginia.gov/division/c1k/fee_domfor_part.htm
Forms related to Limited Partnerships are available via the State Corporation
Commission site at:
http://www.scc.virginia.gov/division/c1k/fee_dom_lp.htm
Partnership Pros and Cons
Pro. The largest advantages of the partnership are that it is relatively simple to start a
business this way, and it allows the business to benefit from a combination of talents.
Another advantage, in the case of a limited partnership, is that each limited partner is
only liable to the extent of his or her individual investment.
Con. The largest disadvantage with a general partnership is that you are personally
responsible for more than half of the business' losses, if it incurs losses. And you are also
responsible for your partner's business decisions, even if they are bad decisions. Also, as
in the case of the sole proprietorship, with a partnership, you and your partner are not
protected from liability related to the business. For instance, if an unhappy customer
sued you, you could lose personal belongings, like your car.
For additional information on business partnerships:
Partnership FAQ (on the NOLO web site)
Corporations (Return to Top)
A corporation is a legal entity that is separate from the people who own it. Shareholders
govern the corporation indirectly by electing people to manage it.
Forming a corporation is somewhat complicated, and you may want to enlist the assistance
of an attorney if you choose to organize your business this way. To form a corporation
requires filing Articles of Incorporation with the State Corporation Commission
(http://www.state.va.us/scc/index.html)andpayingfilingfeesandotherinitialfees.To
access a copy of the Articles of Incorporation form, click here.
In addition, a corporation, once formed, must comply with several formalities, such as
holding regular meetings and maintaining explicit records. Also, to form a corporation, you
will need to fill out the same business license forms as those required for the sole
proprietorship.
There are several different types of corporations:
C Corporation
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This is the most common form of incorporation for America's largest companies. The letter
"C" simply refers to a subchapter of the IRS for corporate tax purposes. The separate
nature of the C Corporation creates advantages and disadvantages.
Since the C Corporation is separate from its owners, also known as shareholders, the
owners may be taxed twice for any profits. That is, the corporation pays taxes on its
profits. Then the corporation distributes the profits to the shareholders in the form of
dividends. The shareholders then pay taxes on these dividends. This is known as double
taxation and is considered a disadvantage of forming a business this way. Pending
legislation, however, may change this form of double taxation. Be sure to check with your
accountant.
An advantage is that the shareholders are only responsible for the company up to the
amount of their personal investment. They may lose all of their stock in a corporation if it
goes belly-up, but they will not lose their homes or other personal belongings.
S Corporation
The S Corporation shares much in common with the C Corporation. Like the C Corporation,
it is owned by shareholders who do not bear personal liability for the losses of the
corporation. Also, the same filing requirements and formal rules apply to both types of
corporations.
There are several differences between the two types of corporations, however. A major
difference and an advantage of the S Corporation is that its shareholders will not be taxed
twice for the company's profits. All profits are passed through to the shareholders'
individual income tax statements.
Another difference is that the S Corporation cannot have more than 75 shareholders, while
the C Corporation can have an unlimited number of shareholders. For this reason, larger
corporations are C Corporations.
Other Types of Corporations
There are several other types of corporations, including: professional corporations
(operated by licensed professionals, such as doctors and lawyers), nonprofit corporations,
and cooperatives.
Corporation Pros and Cons
Pro: An advantage is that the corporation is a separate legal entity from the individual(s)
owning it. This means that if someone sues the corporation, shareholders are only liable
for the corporation up to the amount of stock they own.
Con: A disadvantage is that it may be more complicated and more expensive to start a
business this way. There are ongoing regulations to abide by and fees to maintain when
you run a corporation.
For more information on corporations, consult the State Corporation Commission (SCC)
web site: http://www.state.va.us/scc/index.html. Or contact the SCC by phone at 804-
371-9967 (in Richmond) or toll-free from other parts of Virginia at 1-800-552-7945.
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Additional forms related to corporations may be accessed on the State Corporation
Commission web site at: http://www.scc.virginia.gov/division/c1k/fee_dom_corp.htm
Additional web sites offering information on corporations:
http://www.state.va.us/scc/division/c1k/index.htm#faq
(Office of the Clerk, State Corporation Commission-frequently asked questions)
NOLO Law Centers (Information on Corporations)
Limited Liability Company (Return to Top)
A Limited Liability Company (LLC) is not a corporation. It is a distinct form of business
ownership that combines features of the corporation with features of the partnership or
sole proprietorship.
Forming an LLC is similar to forming a corporation. Articles of organization must be
prepared and filed and fees must be paid. You may wish to consult an attorney if you
choose to form an LLC.
An LLC is like a corporation in that it provides liability protection for its owners. It is like a
sole proprietorship, partnership or S Corporation in that it protects its owners from double
taxation: profits are accounted for on the individual owner(s)' income tax returns. The LLC
owners may choose to operate the LLC like a corporation, and elect managers to run it, or
they may choose to operate like a partnership and manage the company themselves. A
single person may also operate an LLC.
Articles of Incorporation for a Domestic Limited Liability Company (in Word format) may
be downloaded from this CD by clicking here. If you prefer pdf format of this document,
click here.
Additional forms related to LLC's may be accessed on the State Corporation Commission
web site at: http://www.scc.virginia.gov/division/c1k/fee_dom_"c.htm. Also, to form an
LLC, you will need to fill out the same business license forms as those required for the
sole proprietorship.
For additional information on LLCs, visit the NOLO Law Center's web site, LLC FAQ.
LLC Pros and Cons
Pro. The owner(s)' liability is limited.
Con. It is somewhat complex and expensive to form an LLC.
Return to top
Go to next section: Requirements
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Step Two: Operating a Business
Requirements
Local Requirements
Starting a business is easier than you might think. In the case of a sole proprietorship or
general partnership, simply register your business and its trade name and you are in
business. You may access the Virginia Beach business license form here. Before
registering your business, however, you will need to ensure that the name you have
chosen is not currently registered. To request information on a specific company name,
you may fill out a Business License Information Request Form and submit it to the
Virginia Beach Commissioner of Revenue, City Hall, Virginia Beach, VA 23456-9002.
Please contact the Commissioner of Revenue at (757) 427-4251 with any additional
questions.
The City of Virginia Beach also has specific requirements for certain businesses. For
instance, fire code permits are required for some businesses. A copy of the fire code
permit application is attached here. At the bottom of the application, you will see a list
of the occupations and operations which must have a fire code permit. For more
information, please contact the Virginia Beach Department of Economic Development.
Forms related to local requirements for specific types of businesses are maintained on
the Virginia Beach Commissioner of Revenue site, and may be accessed by clicking this
link. This site also contains tax schedules and other relevant information for new
businesses. For tax rates and due dates, click here.
New business owners should be aware that their business location will have to be
approved by the Virginia Beach Zoning Department. This includes home-based
businesses. To reference the city code section related to zoning requirements, go to
www.vbgov.com/dept/planning/ordinances. For additional information about zoning,
please go to: http://www.vbgov.com/dept/planning/zoning/.
Additional information for new businesses (including information about building permits
and inspections and new construction) may be viewed on the Virginia Beach web site at:
http://www.vbgov.com/business/ .
If you have any questions about the business license procedure, call the Virginia Beach
Department of Economic Development at (757) 385-6459.
Local Tax Requirements
As your business grows, so will the requirements. As you make money, you pay taxes.
Each county and city within Virginia receives 1% of the 5% retail sales tax levied on
retail sales within Virginia.
To assist you with local tax requirements, the following information from the Virginia
Beach Commissioner of Revenue web site is included:
"Revenue Agents and Investigators of the Commissioner of the Revenue interview all
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applicants for a business license. Tax rates are set by City Council and vary by industrial
classification. All business entities are classified by industry type. When a new business
applies for a license with the Commissioner's office, an application is completed for any
other applicable tangible property or trustee taxes. If any of the original application
information changes, notification is required. Some manufacturing, farm and non-profit
entities may qualify as tax exempt, but all enterprises must register with the
Commissioner of the Revenue.
"Some organizations that host an event that lasts no longer than 72 hours and occurs
no more than three times a year may be exempt from certain taxes. Events of this kind
are still required to register and are referred to as Community Events.
"The treasurer collects all trustee tax payments. Please refer to the Virginia Beach
Treasurer's office for more information."
Business tax due dates are posted on the Virginia Beach Commissioner of Revenue web
site at: http://www.vbgov.com/dept/cor/taxes/0.1937.9891.00.html. Business Property
tax rates and due dates are posted at:
http://www.vbgov.com/dept/cor/business_revenue/0.1759.9798.00.html. The trustee
tax rates and due dates may be viewed at:
http://www.vbgov.com/dept/cor/business_revenue/0.1759.9831.00.html.
The combined state and local tax rate schedule is attached here.
Commonwealth of Virginia Requirements (return to top)
If your business is a corporation, a limited liability company or a limited partnership, you
must register it with the Virginia State Corporation Commission (SCC). The type of
registration form you use will depend on the type of business you are starting.
The Virginia State Corporation Commission maintains registration
forms on-line. To access them, please go to:
http://www.state.va.us/scc/division/clk/fee_bus.htm .
If you do not have access to the Internet, you may obtain information about the
required see forms, by calling: (804)371-9733 (Richmond), or toll-free 1-866-722-2551
(Virginia only).
For more information about the Virginia State Corporation Commission, you may view
its home page at: http://www.state.va.us/scc/
Other Virginia requirements deal with issues related to taxes, employees and specific
industry regulations, including health and safety issues. For Virginia's requirements
related to taxes and employees, click here to go to that particular section on this CD.
For information related to specific industry requirements, please consult the Virginia
Department of Business Assistance (DBA) web site. This site contains a guide to licenses
and permits within Virginia. It provides a listing by business type or activity and also by
agency. Click here to go to this page (http://www.dba.state.va.us/licenses/). If you do
not have Internet access, you may contact the DBA at (804) 371-8200.
Federal Requirements (return to top)
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Similar to many of the Commonwealth of Virginia requirements, many of the Federal
requirements for small businesses relate to taxes and employment. For information on
federal requirements related to taxes and employees, you may click here to go to that
particular section on this CD.
Other Federal requirements for businesses deal with environmental issues. For
information on Federal environmental requirements, please consult the U.S.
Environmental Protection Agency Small Business Gateway at:
http://www.epa.gov/smallbusiness/ or you may address your questions to the Small
Business Ombudsman at 1-800-368-5888,
j}.
As a small business owner, you should ..Ju€.lware that, depending on what type of
business you own, you may have to abide JY health and safety requirements. For
federal requirements dealing with healtQ a d safety, review the U.S. Department of
Labor Occupational Health & Safety Adrrilrwktration's (OSHA) web site at:
http://www . osha. gov.
In addition, federal law requires that certain specialized businesses obtain and maintain
licenses. The following types of businesses require a federal license:
. Meat processors, drugs (required by the FDA, http://www.fda.gov);
. Interstate delivery people (required by the Department of Transporation, Federal
Highway Administration, http://www.fhwa.dot.gov);
. Investment services (required by the SEC, http://www.sec.gov);
. Radio and TV stations (required by the FCC, http://www.fcc.gov);
. Tobacco products, alcohol, firearms (required by the Bureau of Alcohol, Tobacco and
Firearms, http://www.atf.treas.gov); and
. Export licenses (required by the Bureau of Export Administration,
http://www . bxa.doc.gov).
Information about federal permits may be found at: http://business-
law.freeadvice.com/permits.htm. Laws change, so if you are in doubt as to whether a
special federal license is required for your business, consult an expert.
Please address any questions about requirements that you still may have to the Virginia
Beach Department of Economic Development at (757) 385-6464 or consult one of the
contacts listed on the Help Page.
Return to Top
Go to next section: Employees
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-
Step Two: Operating a Business
Managing Employees: The Basics
Unless you plan to run your business by yourself or with one or more partner(s), you
will have to manage employees. If your business depends on its employees to thrive,
remember these two rules:
1) Hire smart, capable people; and
2) Retain the smart, capable people you hire.
Hiring Smart, Capable People
Different people are suited for different types of occupations. If you need a mechanic for
your auto repair shop, you will look for someone with different skills and interests than
the CPA who is looking for an accountant to help with her tax preparation business.
Write a complete job description of the position you want to fill. Thinking about and
writing down the specific skills and attitudes needed to complete the job at hand will
help you find the right person. Once you have your job description, you are better
equipped to both find and hire your new employee.
You may already have the perfect person in mind or be able to fill your opening from a
personal reference. If not, there are many ways to advertise for employees, including
trade journals relevant to your field; Internet sites; and, of course, the help wanted
section of your local newspaper. The method you choose will depend on the position you
are filling. For instance, placing a "help wanted" poster in the window of your coffee
shop may be all you need to do to get qualified applicants for the open counter position,
but this method will probably not work if you are trying to hire a computer programmer.
For information on hiring:
http://www.businesstown.com/hi ring/h iring-top.asp
http://www.businesstown.com/h iring/hiring-advice.asp
After completing the job description and finding one or more qualified applicants, the
next step is making a job offer and hiring someone. You will probably want to interview
your applicant(s). You may have a good idea of the applicant's skills and experience
based on his or her application or resume. The interview will provide you an opportunity
to get to know the person's personality and level of enthusiasm. Do you click with your
applicant? Personality and attitude are important factors to consider. You want to hire
someone with whom you get along and who will function well in the position. For
instance, someone with a friendly, outgoing demeanor would probably do well in a
customer service position, whereas, an introverted person may perform well in a
position as a bookkeeper. For sample interview questions, click here.
The following table (from NOLO.com) gives information on questions that can and
cannot be legally asked during a job interview. Please note that these questions are not
necessarily all-inclusive.
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Subject lawful Inquiry Unlawful Inquiry
Are you 18 years of age or older? (To
Age determine if the applicant is legally How old are you?
old enough to perform the job)
Is your spouse employed by this
Marital status employer? (If your company has a Are you married?
nepotism policy)
Are you legally authorized to work in Are you a native-born citizen
Citizenship the United States on a full-time of the United States? Where
basis? are you from?
These [provide applicant with list] are Do you have any physical
Disability the essential functions of the job. disabilities that would prevent
How would you perform them? you from doing this job?
Drug and Do you currently use illegal drugs? Have you ever been addicted
alcohol use to drugs?
For further information on interviewing:
http://www.entrepreneur.com/amex/article/O.5742.303589.00.html
http://www.babyshopmagazine.com/faIIOO/hourly.htm
After the interview, always follow through and check references. It is a good practice to
enhance your check of references with a background check. A background check is
especially important for positions in security and law enforcement, health care, child
care, and for positions that involve visits to customers' homes or offices or where
sensitive information will be handled. Be aware, however, that there are legal guidelines
to follow when conducting background checks.
There are private companies who can conduct an affordable background check for you.
Conduct an on-line search using the phrase "employee background checks" to find links
to companies which do this type of work. Or look in your local yellow pages. Remember
to check references of the company that you hire to do your background check!
For additional information on conducting background checks:
http://www.privacyrights.org/fs/fs16-bck.htm
Keeping the Smart, Capable People you Hire from Quitting
Once you have a great employee working with your business, treat her or him as you
would a great customer. Everyone is different, of course, and has different career goals
and requirements; but, in general, your employees will want to be compensated,
motivated and rewarded.
Compensation is the combined package of salary and benefits, including health
insurance and time off. Be stingy with a good employee and it may end up costing you
much more than the compensation would, both financially and in terms of the hassle-
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factor involved in finding and training a new person when your prized employee leaves
for greener fields.
Motivating your employees will require finding out more about them, since different
people are motivated by different things. Reviews provide a good forum for discussing
issues such as motivation with your employees. They are also important for
accountability and legal backup purposes. Keep records of your employees'
performance, including documentation of any needed discipline or reprimanding. Some
people may need autonomy and control over a project in order to feel motivated. Others
may require a certain type of work environment or an opportunity to take classes or
receive training. Find out what motivates your employees and make sure you provide it
for them.
Rewards are the good grades of the business world. Provide rewards, such as a share in
profits or even something as simple as verbal recognition, to high achievers. Let them
know they are doing a great job. Rewards help keep morale high.
For more tips on retaining employees:
http://www.zeromillion.com/business/employee-motivate.html
http://www.entrepreneur.com/article/0.4621.301301.00.html
Employment Termination
If you take the time to interview your potential employees and check their references,
you will hopefully hire a great and loyal employee and never have to go through the
rough job of firing someone. But what do you do if the person you hire steals from your
business, is rude to your customers, is unreliable, or is not getting the job done?
For some offenses, such as stealing, immediate dismissal might be the best solution. In
other cases, you may not need to fire someone, but just provide additional training or
other assistance. For instance, perhaps an employee clearly is trying to do a good job,
but is making mistakes. More training may be all it takes to turn this employee into a
loyal and capable addition to your staff.
In other cases, you may wish to give a series of warnings to an employee who acts in an
inappropriate way to give her a chance to change before taking the drastic measure of
firing her. For instance, perhaps you have a policy that your employees always show up
on time for work. If someone is perpetually late, you could start with a verbal warning.
If the poor attendance continues, you could follow the verbal warning with one or two
written warnings. Finally, as a last resort, you may decide to fire the employee.
Sometimes you may have an employee who breaks a rule (such as showing up on time),
but does an exceptional job. In this case, you may wish to overlook a rule. The product,
in this case, the work completed, may be more important to your business than the
process, in this case, the time in which the employee comes in to work. Remember that
people have different personalities and different requirements for a work environment in
which they can perform at their best. Another idea is to discuss with your employee
reasons for his or her misconduct. In the case of the employee who is late, maybe the
employee has another obligation, such as getting a child to day care or school. You may
be able to work out an adjustment in your employee's schedule. An employee with less
stress and who feels that you are on his or her side will be more likely to work hard and
remain loyal to you.
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If all remedies fail and you do have to fire someone, there is no easy way around it. One
way to fire an employee is to call the employee into your office or another private work
area. Explain the reasons why you are letting him go. Point out the series of warnings
that you offered, and give details on how a final paycheck will be made. Give the
employee a letter of termination which you prepared ahead of time. Above all, make
sure you are abiding by all legal requirements related to firing someone. If possible, try
to end the meeting on a friendly note, with a handshake and a wish for luck.
Letting Someone Go when They are Doing a Great Job
Sometimes you may have to let a great employee go due to budgetary concerns. In this
case, it will be in your and your employee's best interest to keep relations between you
as excellent as possible. Providing an employee you must layoff with advance notice, a
severance package and assistance in finding other work are three ways to help keep
your relationship with your employee on positive footing. These steps will help your
employee and they will help you maintain a positive image in the community. Also, if
you need your former employee's assistance later, he or she will be more likely to help
you. As with firing someone, if you must lay someone off, be sure to follow all legal
requirements.
Additional information on firing someone:
NOLO: FAQ about Firing Someone
Managing Employees: Government Regulations and Taxes (return to
top)
An important part of managing your employees* will take place behind the scene. Make
sure you take care of all tax and regulatory requirements related to your employees to
keep the engine of your business humming. These requirements exist at the federal,
state and local levels. It is very important to follow all laws regarding employees. A form
is included at the end of this section to help you keep track of your decisions related to
employees. Consult with an attorney, as needed.
Federal Requirements
General Federal Regulations
Employer Identification Number (EIN)
The Employer Identification Number, or EIN, identifies the business to the Internal
Revenue Service and the Social Security Administration. It will appear on all business
tax returns and all tax correspondence related to your business. Although sole
proprietorships with no employees may not need an EIN, the Commonwealth of Virginia
encourages all businesses to use one since the EIN is often used by state and local
agencies as a means of cross-referencing businesses.
If you answer yes to any of the following questions, you will need an EIN:
. Do you have employees?
. Do you operate your business as a corporation or a partnership?
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. Do you file any of these tax returns: Employment; Excise; or Alcohol, Tobacco and
Firearms?
. Do you withhold taxes on income, other than wages, paid to a non-resident alien?
. Do you have a Keogh plan?
. Are you involved with any of the following types of organizations:
o Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt
Organization Business Income Tax Returns;
o Estates;
o Real estate mortgage investment conduits;
o Non-profit organizations;
o Farmers' cooperatives; or
o Plan administrators.
To apply for an EIN, fill out IRS Form SS-4. Application may be made by phone, fax,
mail or on-line. For more information on applying for the EIN, visit the IRS web site:
http://www.irs.gov/businesses/small/article/0..id=97860.00.html.
Or you may reach them by phone at (800) 829-1040.
Employee Eligibility Verification
The U.S. Department of Justice, Immigration and Naturalization Service requires all
employers to complete an Employee Eligibility Verification Form (Form I-9) for each
employee hired. This form provides proof that the employee is eligible to work in the
United States. With increased fears about terrorism, this form has become more
important in recent months.
To access a copy of the Form I-9 in pdf format, click here. Information on Employee
Eligibility Requirements and the form I-9 is available on the Bureau of Citizenship and
Immigration Services web site: http://uscis.gov/graphics/formsfee/forms/i-9.htm. If you
do not have access to the Internet, you may call 1 (800) 870-3676 to have the form
mailed to you.
Required Posters
Federal regulations require that companies with employees must post certain posters in
a conspicuous place so that their employees may read them. Four required posters are
listed below. For additional information about these posters or to obtain information
about other posters that certain employers may be required to display, you may view
the Department of Labor web site at: http://www.dol.gov/osbp/sbrefa/poster/main.htm.
Fair Labor Standards Act (FLSA) Minimum Wage Poster
Employers subject to the Fair Labor Standards Act's minimum wage provisions must
display, and keep displayed, in a conspicuous place a notice related to minimum wage.
An approved copy of this poster is included on this CD, and may be accessed by clicking
here.
Family and Medical Leave Act (FMLA) Poster
Employers must post, and keep posted, a poster summarizing the major provisions of
The Family and Medical Leave Act (FMLA) and telling employees how to file a complaint.
An approved copy of this poster is included on this CD, and may be accessed by clicking
here.
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Equal Employment Opportunity (EEO) Poster
Employers covered by the non-discrimation and EEO laws are required to display the
poster "Equal Employment Opportunity is the Law" in a prominent place. This poster
gives information about laws and procedures for filing complaints of violations of the
laws with the Office of Federal Contract Compliance Programs (OFCCP). An approved
copy of this poster is included on this CD, and may be accessed by clicking here.
Occupational Safety and Health Administration (OSHA) Poster
Employers must display the OSHA poster in a prominent place where all employees may
read it. This poster gives information about the rights of employees to a safe and
healthy workplace. An approved copy of this poster is included on this CD, and may be
accessed by clicking here.
Federal Tax Requirements (Note: The forms included in this section are current as of
2005. You may check for changes to any of the forms on the Internal Revenue Service
web site at http://www.irs.gov.)
There are three different federal tax requirements for employers:
Income Tax
Social Security and Medicare (FICA)
Federal Unemployment Tax (FUTA)
Income Tax
Employers must withhold income tax from each employee's paycheck throughout the
year. The amount withheld will vary based on pay rate, marital status, and exemptions.
Each employee must fill out an IRS W-4 form before they begin employment. In return,
employers must send an IRS W-2 form to each employee showing payments and
withholdings no later than January 31 of each following year. By February 28, employers
must furnish the Social Security Administration with copies of all of their employees' W-
2 forms, as well as the IRS Form W-3 (Summary and Transmittal Form). The Social
Security Administration submits the data to the IRS. The table you use to compute how
much tax to withhold is on page 34 of IRS Publication 15, Circular E, Employer's Tax
Guide (Revised January 2005).
Employers deposit the withheld tax either monthly, or semiweekly according to the total
payroll amount, and submit it using Form 941.
"Form 941 Deposit Due Date. If you are a new employer and have never filed 941
forms, you are a Monthly Schedule Depositor for the first calendar year of your business
unless you are a special exception to the rule. Monthly Schedule Depositors should
deposit taxes from all of their paydays in a month by the 15th of the next month, even
if they pay wages every week.
"Employers with prior payrolls and taxes of $1,000 or more per quarter must determine
if they make either Monthly Schedule Deposits, or Semiweekly Schedule Deposits. This
determination is based on your Form 941 taxes during a four quarter Lookback
Period." (Source: IRS web site.)
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IRS Publication 15, Circular E, Employer's Tax Guide (Rev. January 2005) provides the
following information to help employers determine if they must make monthly or
semiweekly deposits.
"Your deposit schedule for a calendar year is determined from the total taxes (not
reduced by any advance EIC payments) reported on your Forms 941 (line 11) in a four-
quarter lookback period. The lookback period begins July 1 and ends June 30 as shown
in Table 1 below. If you reported $50,000 or less of taxes for the lookback period, you
are a monthly schedule depositor; if you reported more than $50,000, you are a
semiweekly schedule depositor."
2005 Lookback Period
2003 2004 2005
July 1 to October 1 to January 1 to April 1 to Calendar Year
September 30 December 31 March 31 June 30 January to December
More information about this process is available on the IRS web site at:
http://www.irs.gov/businesses/small/article/0..id=98818.00.html.
For further instructions on W-2 and W-3 forms and filing, click here.
For a copy of the W-2 form, click here (provided for informational purposes only).
For a copy of the W-3 form, click here (provided for informational purposes only).
For a copy of the W-4 form, click here.
For a copy of the Form 941, click here.
For more tax information related to businesses, consult the IRS web site at:
http://www.irs.gov. Or you may consult the Richmond office of the IRS at 400 N. Eighth
Street, Richmond, VA 23240; telephone (804) 916-8700.
Keep in mind that tax laws change frequently, and you may wish to consult an
accountant, attorney or tax expert. For recommendations on experts, contact the Center
for Entrepreneurial Development in Richmond, Virginia, at (804)521-4320.
Social Security and Medicare (FICA)
The employer and employee share the FICA tax. The employer withholds the employee's
share from each paycheck; the employer must then match this amount. The chart below
(from IRS Publication 15, Circular E, Employer's Tax Guide) gives the rates for Social
Security and Medicare Tax.
Calendar Limit Wage Base Limit (each Tax Rate on Taxable Wages
employee) and Tips
2004-Social $87,900 12.4%
Security
2004-Medicare All Wages 2.9%
2004-Social $87,000 2.9%
Security
2003-Medicare All Wages 2.9%
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2002-Social $84,900 12.4%
Security
2002-Medicare All Wages 2.9%
Small businesses (reporting $50,000 or less in payroll taxes the prior year) must pay
federal income and FICA taxes monthly; large businesses pay these taxes twice weekly.
The payments are made with Coupon 8109-B directly to a bank. In addition, these taxes
are filed four times a year on Form 941.
For a copy of Form 941 (pdf), click here.
For a copy of the Employer's Tax Guide (Publication 15) (January 2005 version), click
here. This informative gUide contains much information to guide you regarding taxes
and your employees.
Federal Unemployment Tax (FUTA)
Funds from the FUTA and the state unemployment tax provide temporary financial relief
to those who become unemployed through no fault of their own. Contrary to popular
belief, employees do not contribute to the FUTA: employers are responsible for paying
100% of all unemployment taxes. The FUTA amount is based on an employee's wages.
Employers get credit towards the FUTA based on what they pay to Virginia for state
unemployment taxes (see state unemployment tax below).
Employers file the FUTA annually on Form 940. It must be paid at least by January 31 of
the following year or quarterly on Coupon 8109 if a higher payroll requires it.
Click here for a copy of the IRS Form 940.
Commonwealth of Virginia Requirements
Upon starting a business in Virginia, it is necessary to register your business with the
Department of Taxation using form R-1. This form can also be accessed on line through
the Virginia Department of Taxation web site at http://www.tax.virginia.gov/.
With regard to taxes and tax forms, it is important to note that the forms included with
this CD are current as of 2005. Because tax forms do change, you may wish to consult
the Virginia Department of Taxation's web site for changes to any of these forms.
The Commonwealth of Virginia requires businesses to be responsible for five different
types of monetary requirements:
Income Tax
Unemployment Tax
Retail Sales Tax
Workers' Compensation Insurance
Miscellaneous Taxes
Income Tax
Employers must withhold a portion of their employee(s)' income for Virginia's income
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tax. Employers register for this tax with the State of Virginia using Form R-1. If your
withholding liability for the month is less than $100, your withholding tax payments are
due quarterly. If your withholding liability for the month is $100, but less than $1,000,
your withholding payments are due monthly. If your withholding liability for the month
is $1000 or more, your withholding tax payments are due semiweekly.
The specific forms you will use (Forms VA-5, VA-6, VA-15, and VA-16) will vary based
on your withholding liability. To gain more information, please consult the Virginia
Department of Taxation's web site for information on withholding taxes:
http://www.tax.virginia.gov. If you do not have access to the Internet, you may also
consult the Virginia Department of Taxation's Customer Service by phone at: (804) 367-
8031.
Copies of forms are available here:
Form R-1
Form VA-5
Form VA-6
Form VA-15
Form VA-16
Unemployment Tax
As noted above, the main purpose of the unemployment tax is to provide temporary
financial relief to individuals unemployed through no fault of their own. Employer's
contributions to Virginia's unemployment fund are normally based on wages they have
paid, the amount they have contributed to the unemployment fund, and the amount of
compensation that their laid off employees have received from the unemployment fund.
Employers pay both a state and federal unemployment tax, as noted above; the state
tax paid by employers may be credited against the federal tax.
If you answer yes to any of the following questions, you must pay the unemployment
tax:
· Do you employ one or more employees (or 10 agricultural employees) during twenty
weeks or more of the calendar year?
. Do you have $1500 or more in your quarterly payroll?
· Have you acquired a business subject to the unemployment tax?
. Are you subject to the FUTA?
· Are you a governmental operation or political subdivision?
The unemployment tax is paid via the Virginia Employment Commission (VEC), rather
than the Virginia Department of Taxation. Payment is due quarterly to: Virginia
Employment Commission, P.O. Box 1358, Richmond, Virginia 23218.
For more information, consult the VEC web site: http://www.vec.state.va.us/index.cfm.
If you do not have Internet access, you may reach your local VEC office by phone. There
are VEC field offices located throughout the state of Virginia. For the location closest to
you, consult your local phone book.
Retail Sales Tax
Businesses in Virginia must pay a sales tax to the state on gross receipts from retail
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sales. The tax is noted to consumers and is added to the regular price of purchased
goods. Currently the sales tax rate is 4.5% (3.5% is state tax, and 1% is local tax). The
Virginia Department of Taxation defines retail sales as "sales to a customer or to any
person for any purpose other than for resale." The tax may also apply to the lease of
personal property and the renting of accommodations. Some food may be taxed at a
lower rate. As of July 1, 1998, nonprescription drugs and certain medicines were
exempted from state sales tax.
To view the tax table for sales in Virginia, click here.
As noted above, you must register your business with the Virginia Department of
Taxation using form R-1. Businesses subject to the sales tax must also submit a
monthly sales tax report on form ST-9, with payment, by the 20th of the following
month, regardless of whether they had taxable sales that month. The form and payment
should be mailed to: Virginia Department of Taxation, P.O. Box26626,Richmond,VA
23261-6626. Some businesses may be able to switch from monthly to quarterly
payment of this tax. If you would like to switch, please contact the Virginia Department
of Taxation.
For a copy of the form ST-9, click here. You may also contact Customer Service at (804)
367-8031 for a copy of the form to be mailed to you.
For more information on the Virginia Sales Tax, consult the relevant section of the
Virginia Department of Taxation's web site: http://www.tax.virginia.gov. You may also
contact Customer Service at (804)367-8031.
Workers' Compensation Insurance
Workers' Compensation is not a tax, but a type of insurance that most employers in
Virginia must have. This insurance provides compensation and medical benefits to an
employee or his or her dependents if the employee becomes disabled or dies from an
accidental injury or disease acquired due to employment. Any employer with three or
more regular employees is required to provide worker's compensation insurance. The
employee pays no portion of this insurance.
There are four methods of obtaining insurance:
1. Purchase and maintain a workers' compensation policy from a company licensed in
Virginia;
2. Apply to the Virginia Workers' Compensation Commission for approval as an
independent self-insurer;
3. Become a member of a group self-insurance association licensed by the Virginia
State Corporation Commission; or
4. Enter into an agreement with a professional employer organization as provided in
Section 65.2-801.AA of the Code of Virginia. *
(Source: Virginia Workers' Compensation Commission web site.)
For more information on Workers' Compensation Insurance, consult the Workers'
Compensation Commission web site at: http://www.vwc.state.va.us/. Or contact the
Commission by phone at (703) 518-8055.
Miscellaneous Taxes
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In addition to the requirements listed above, certain businesses are required to pay
additional, miscellaneous taxes, such as the "Litter Tax" and the "Tobacco Tax." To find
out if your business is responsible for paying a miscellaneous tax, consult the Virginia
Department of Taxation's web site for business tax information:
http://www.tax.virginia.gov. Or contact them by phone at (804)367-8031.
Local Requirements
For information on any Virginia Beach requirements related to employment, please
contact the Virginia Beach Department of Economic Development. For information on
local taxes, please click here.
*Employers should be aware of the difference between independent contractors and
employees. Classifying an individual as an independent contractor can make a big
difference in terms of federal, state and local requirements; and federal, state and local
taxes. According to the IRS, the following factors indicate someone is an independent
contractor:
1. The worker hires, supervises and pays her assistants;
2. The worker is free to work when and for whom she wants;
3. The work is done on the worker's premises;
4. The worker is paid by the job or on straight commission;
5. The worker has the risk of profit or loss;
6. The worker does work for several businesses at one time;
7. The worker's services are available to the general public; and
8. The worker can't be fired except for breach of contract.
(Source: IRS)
For more information, consult your local IRS field office.
Helpful links Related to Managing Employees (return to top)
Links related to employees:
Entrepreneur.com (Information on Employees)
Links Related to Worker's Compensation:
http://www.vwc.state.va.us/index.htm
The VA Workers' Compensation Commission
http://www.dol.gov/esa/owcp_org.htm
DOL info on workers' compensation
http://www.vwc.state.va.us/employers_guide.htm
The VA Workers' Compensation Commission (info for employers)
http://www.vwc.state.va.us/act.htm
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Overview of the Workers' Compensation Commission
http://lawyers. find law .com/lawyer/servlet/PCityFirm?state= V A&practice= FL50
West Legal Directory (find a workers compensation lawyer in Virginia)
http://attorneypages.com/535V A/index. htm
Attorney Pages.com: find a workers compensation lawyer in VA
http://info. insure.com/business/workerscom p/lawtool.cfm
Insure.com : Workers comp insurance laws in VA
http://www.dhrm.state.va.us/WorkersComp/riskcontrol.htm
Training related to workers comp
http://trs. virginia.gov/drm/drm.asp
VA Division of Risk Management
http://www.state.va.us/scc/news/commins.htm
SCC article regarding insurance coverage for small businesses
Links Related to Unemployment Compensation:
http://www . vec. virginia.gov/vecportal/faq.cfm
Virginia Employment Commission, Unemployment Insurance FAQ
http://www.law.comell.edu/topics/unemploymenccompensation.html
Description of unemployment compensation
.
Links Related to Federal Employment Laws
http://www.eeoc.gov/facts/qanda.html
Federal laws prohibiting discrimination in employment
http://www.dol.gov/elaws/
Employment laws for workers and small business owners (Dept. of Labor)
Conclusion: Managing Your Employees
To help keep track of your decisions about employees and requirements related to
employees, you may click here to access an "Employee Management Form."
Return to top
Go to next section: Assistance
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An Interactive Guide to Starting a Business in Virginia Beach
Step Three: Business Plan
Introduction: A Recipe for uccess
Do you want your business to succeed?
Page 1 of 3
Studies show that small business owners who complete a business plan before starting
their businesses are much more likely to succeed than small business owners who do
not.
How does a business plan help small business owners succeed?
1) It helps you by providing direction for your business.
It answers the following questions:
· What kind-of business are you starting?
. What are your goals?
· How will you reach your goals?
. Who are your customers?
. Who is the competition?
· Where should you locate your business?
. How will you finance your business?
· How will people find out about your business?
2) It helps you by providing information to other people who could help you succeed,
such as investors, banks, potential partners, and future employees.
Preparing a Business Plan takes time and effort, but, in the long run, it will save you
time and effort. It will help you find out:
1) Can your business make money?
2) Do you have the time, energy and resources to make your business work?
3) How quickly will your business grow and how much will the growth cost?
4) What are the benchmarks that will show how your business' planned growth
compares to its actual growth?
If you deCide the business can succeed and you can
make it work, the Business Plan will serve as your
gUide throughout the entire start-up process and as
a reference for the entire life of your venture. Its
importance cannot be overemphasized.
The Business Plan Cycle
Budget Projedions
,/~ ./--,~
, /
M~~j?' Changes
as required by
the Business Plan
Take Action
to Implement
the Business
The business plan is a continuous process, not a
document that is done once and then put away on a
shelf. It should be updated every quarter, or at the
minimum annually, to compare the actual figures
that have transpired with the projections that were
initially included in the plan. Comparing your budget
with what has actually happened will help keep a
Evaluate the Results
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.
company "on track" and prevent future surprises.
This CD is designed to make the process of preparing a Business Plan easier. If you
have completed the research in "Step 1: Getting Started," you have already done some
of the homework necessary for the Business Plan.
If you really want to be in business for yourself, if you are willing to invest the time and
effort required to be successful, if you want to have a map to follow on the exciting road
of entrepreneurship, continue reading.
Elements of the Business Plan (Return to Top)
The Business Plan consists of:
1) Cover Page
The cover page consists of your name, address, phone number, e-mail address, and
web site.
2) Table of Contents
3) Executive Summary
The Executive Summary contains a summary of the other sections of the Business Plan.
It is the most important section, as it is the first (and sometimes only) part of the Plan
that some interested parties may read. You will prepare this section last, after
completing the other parts of the Business Plan.
4) Background Information
This section includes:
a) Your personal background and qualifications to run the business;
b) A mission statement for your business;
c) Background information on the type of industry into which your business fits, and its
place within that industry; and
d) Your business' goals and objectives.
5) Description of Products and/or Services
This section includes a description of the product(s) and/or service(s) you are selling.
The description should include the price of each product or service, and the cost to your
business to produce each product or service.
6) Organizational Matters
This section tells how your business will be managed and organized. Questions
answered will include: Is the business a sole proprietorship, partnership, corporation or
limited liability company? Who will manage the business? Will the business have
employees? Who will be its advisors?
7) Marketing Plan
The Marketing Plan includes information on your customers and competitors. Based on
this information, you will decide where to locate your business and how to promote its
product or service.
8) Financial Plan
The Financial Plan will provide information about your resources for running the business
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and your projections for profits. It is the longest and, many would claim, the most
important part of the Business Plan. Based on the Financial Plan, you should be able to
determine if your business will be profitable, and hence, if it will be worth your effort to
start it.
9) Conclusion (optional)
The Conclusion presents a summary of why your business will be successful, using data
gained in the other sections to support your claim. It may also present how much
money is required for the business, where the money will come from and where it will
be used.
10) Appendix (optional)
The Appendix contains any supporting materials, such as your personal resume or a
record of any relevant training or education.
If you would like to view a sample business plan first, please select one:
Bubba's Bagels
Sorrel's Horse Farm
Ready to Get Started?
Click the "Ready to Get Started" link above and the CD will walk you through the
creation of each of these sections.
Retu rn to top
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Step Three: Business Plan
Create Your usiness Plan
Ready to get started on your business plan? The Table of Contents listed below contains all
of the sections that your business plan will need. Click on each link below and, when the
page opens, follow the instructions at the top. You will have options to save, erase and
print each section.
If you would like to view a sample business plan before getting started, you may choose
from one of two provided on this CD:
Bubba's Bagels
Sorrel's Horse Farm
...............................
Important Notices:
If this is the first time using this software on this computer and you have not yet
taken all of the steps that were included at the beginning of this CD, please click here and
follow the simple instructions before using to ensure that this software will work efficiently
on your computer.
...............................
The software on this CD is subject to changes that may occur whenever Microsoft or
other companies upgrade internal system operations through security upgrades,
patches, and other changes to the way the system operates. If you experience
problems with the operation of this CD, check for an upgrade patch at the
Community College Workforce Alliance web site:
http://www.ccwa.vccs.edu/sbCD.cfm.
...............................
The business plan software included on this CD will run best if you use Internet
Explorer 6.0 (or later) as your browser. It will not operate if the browser in use
is Mozilla/Firefox, Netscape or Macintosh OS.
...............................
Additional Note on Printing: If you would like the pages of the business plan to print
without unnecessary headers or footers, please take the following steps before
proceeding. Go to "File" on your browser menu. Select "Page Setup." Underneath the
section titled "Headers and Footers," delete anything in the field next to "Headers" and
also delete anything in the field next to "Footers." These two fields should be blank.
Click "Ok."
You are ready to print!
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An Interactive Guide to Starting a Business in Virginia Beach
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Business Plan Table of Contents
Step One: Cover Sheet
Step Two: Background Information
Step Three: Description of Product(s) and/or Service(s)
Step Four: Organizational Matters
Step Five: The Marketing Plan
Step Six: Competitive Analysis
Step Seven: The Financial Plan
Step Eight: Conclusion
Step Nine: Executive Summary
Step Ten: Appendix
Print Your Business Plan
Return to Step Three: Business Plan
Return Home
Retu rn to top
.............................................
Return to top
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An Interactive Guide to Starting a Business in Virginia Beach
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About Virginia Beach: Local Information
The Word on the Beach
USA Weekend Magazine named Virginia Beach as the Best Place to Live in the
Nation in 2003.
. In its 6th Annual "America's 50 Hottest Cities" publication, Expansion Management
Magazine ranked Virginia Beach as the 11th best city in the nation for companies
looking to expand or relocate in 2004.
. In 2004 the National Policy Research Council named Virginia Beach as the Most
Livable Large City for Women.
. Virginia Beach was ranked 4th in the list of best city governments by the National
Policy Research Council in 2004.
. According to the 2004 Digital Cities Survey, Virginia Beach has the most
technologically advanced government in America, among cities with a population
of 250,000 or more.
. Virginia Beach has the highest bond ratings for cities in Hampton Roads and is
among the highest in the state.
. Virginia Beach has the lowest crime rate in the US among big cities according to
the 2003 FBI's crime report.
. Ladies Home Journal ranked Virginia Beach as the #1 city in the nation in its 2002
list of "America's Ten Best Cities."
. Among the 50 largest cities in the nation, Virginia Beach has the 9th lowest
spending per thousand residents, according to "Measures of Efficiency and Fiscal
Performance," City of Virginia Beach Department of Management Services 2004.
. Virginia Beach was rated one of the five Best Managed Cities in the Nation in a
2000 Syracuse University / Governing Magazine research study.
. In 2003, Inside Business judged Virginia Beach one of the 25 Best Places to Work
in Hampton Roads.
. According to a 2004 Men's Fitness Magazine study, Virginia Beach is the 3rd fittest
city in the country.
. Virginia Beach is the 8th most efficiently run large city in the nation according to
the Reason Public Policy Institute in 2001.
. A Census Bureau's American Community Survey found that Virginia Beach has the
4th Highest City Median Household Income among the nations 68 largest cities in
2004.
. Virginia Beach received the Healthy Community Award from the American Parks
and Recreation Society.
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About Virginia Beach: Local Information
Business Advantages
Virginia Beach....
. Has a strategic Mid-Atlantic coast location
. Is located within 750 miles of 60% of U.S. Market
. Is known for its "business friendly" environment
· Offers a wide variety of programs, services and incentives which reduce the costs
of relocating and expanding a facility within the city
· Can streamline the construction process by "Fast-Tracking" the permitting and
approval processes
· Partners effectively with regional and state economic development organizations
and agencies to provide business incentives
· Offers competitively priced land and buildings providing a multitude of options for
business start-up, expansion and relocation
· Has a redundant telecommunication infrastructure which provides an additional
cost advantage over other areas
· Offers a civilian labor force of 200,000; with 700,000 in the MSA
· Features unique labor components, including military personnel and their spouses,
seasonal and part-time workers, and college students, to augment the traditional
workforce.
· Has a labor pool with a strong work ethic and low absenteeism and turnover rates
· MSA was named by Money Magazine as the "Best Place to Live" among large cities
in the south
· MSA was ranked thirteenth in the Top 20 "Best Big Cities for Small Business" by
Entrepreneur Magazine
. Offers a low cost of living and doing business
· Has a climate tempered by the Gulf Stream off the Atlantic Coast which moderates
winter's chill and provides cooling ocean breezes in the summer
Virginia.. ..
· Has a corporate income tax rate of 6%, which is lower than all surrounding
states (except Tennessee, which has the same rate)
· Has a corporate income tax rate that has remained the same since 1972
· Has low premiums for unemployment insurance and workers' compensation
insurance
· Has a 3.5% sales tax that is lower than any surrounding state
Advantages for High-Technology and Information Technology &
T@I@communications Companies....
· Advertising Age magazine ranks Hampton Roads number 10 in household Internet
usage.
· Virginia Beach was rated the 41st Most Wired City in the nation in March 1999 by
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Yahoo! Internet Life magazine.
· Hampton Roads' 11 institutions of higher learning help keep the workforce on the
cutting edge by offering undergraduate and advanced degrees in electrical,
electronic and communications engineering, computer and information science,
and business technology.
· Hampton Roads has some 39,000 engineers, scientists and technicians among its
population of 1.5 million.
· Hampton Roads is home to the U. S. Navy's Atlantic Fleet, in addition to several
Army, Air Force, Marine and Coast Guard bases. Many highly trained and skilled
military members remain in Hampton Roads and add their special talents to our
civilian workforce when their tour of duty ends or they retire.
· Virginia, with more than 4,700 high technology companies in the state, has gained
the title "Silicon Dominion."
· Virginia Beach is home to over 100 high tech companies-a majority dedicated to
communications, computers and information technology systems.
· The Hampton Roads Technology Council, an affiliation of regional technology firms
which focuses on accelerating and expanding high-tech business and opportunity
in Hampton Roads.
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About Virginia Beach: Local Information
Business Development
I Project Information I Available Sites & Buildings I Property Search I
Project Information
Fast Track Construction Program (posted 6/2/2005)
Virginia Beach initiated its unique Fast-Track Construction Program in 1994 after
completing a strategic planning process which included in-depth discussions with
developers, contractors, architects, engineers, and city staff. The program has
significant advantages for companies desiring to relocate or expand in Virginia Beach
and is still rare in the world of economic development.
· Fast-tracking streamlines permitting and construction so that custom buildings can
be built, occupied and operational in as little as six months. This is at least 50%
less time than the typical non-fast-track construction time of 12-18 months or
more.
· The Fast-Track Construction Program is customer service and teamwork oriented
program adopted and supported by the mayor and city council.
· The city's pro-business attitude is reflected in the priority given to all fast-track
projects, whether they are built on city or privately owned sites. Various sites from
one- to 1,000 acres with access to city services are available for fast-track
projects.
· The relocating/expanding company interviews and selects its construction team,
including the architect, engineers and contractor. The City of Virginia Beach
maintains up-to-date lists of regional professionals as a service-not for marketing
purposes-for companies planning fast-track projects.
· Fast-track projects are phased; building requirements and priorities, time frame,
and financial parameters are established up front.
· The Department of Economic Development will assist fast-track companies in
locating and setting up temporary facilities during construction so business
operations can begin virtually simultaneously with move-in.
Example Fast-Track Construction Projects
Avis Virginia Beach Processing Center
Location: Center POinte Office Park
Avis Site: 15 acres
Building Size: 167,000 sq. ft.
Employees: Capacity for 1,100
GEICO Regional Service Center
Location: Corporate Landing Business Park
GEICO Site: 30 acres
Building Size: 250,000 sq. ft.
Employees: Capacity for 2,500
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Project Approval Requirements (posted 6/2/2005)
Permits Department Contact/ Phone Fee Approx. Time
Number Frame
Site Plan Planning/Development Team Review $1130 + 4 Weeks
Review Services Center 757-426-5790 $85/acre
Land Planning/Development Team Review *$25 Permit Fee Incoporated as
Disturbing part fo site plan
Permit Services Center 757-426-5790 Requires Bond review
Per DFU, $66 Customer Service
Drains Public Utilities Customer Debbie water ($13 sewer open 8:30-
Fixtu re Service Hollingsworth for renovations 5:00pm, DFU's
Units 757-427-4867 and additions) purchased
immediately
Right-of- Planning/Development Team Review *$25 Permit Fee Incoporated as
part fo site plan
Way Permit Services Center 757-426-5790 Requires Bond review
Building Planning/Permits & Doug Smith $100 (part of 3-4 weeks
Plan Review Inspections 757-427-4211 permit fee)
24 hours to
Plumbing Planning/Permits & Amy Meador $25 plus $6 per receive permit
24 hours to
Permit Inspections 757-427-4211 plumbing fixture schedule
inspection
24 hours to
Electric Planning/Permits & Carla Andrews $25 plus $20 per receive permit
50 amps (Single 24 hours to
Permit Inspections 757-427-4211 Service price) schedule
inspection
$25 first $1000 24 hours to
receive permit
Mechanical Planning/Permits & Andrea Robinson in value plus $5 24 hours to
Permit Inspections 757-427-4211 per additional schedule
$1000 inspection
24 hours to
Kevin Based on sign receive permit
Sign Permit Planning/Zoning Hershberger size-$368 24 hours to
757 -427 -8074 maximum schedule
inspection
24 hours to
Building Planning/Permits & Doug Smith $25 plus $8 per receive permit
24 hours to
Permit Inspections 757-427-4211 100 sq. ft. schedule
inspection
Certificate $25 New
of Planning/Permits & Jeanette Mathis Construction $50 24 hours
Occupancy Inspections 757-427-4211 Existing
Structures
* Fee does not include inspections, separate inspection fees will be charged based on
proposed work.
** All time estimates based upon complete plans submitted by each Engineering Firm,
workload and customer needs
.................................
Available Sites and Buildings (return to top)
Virginia Beach offers a rare blend of successfully developed business sites and open
land available for a multitude of uses.
Currently, the city has seven major business corridors containing more than 27 million
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square feet of enclosed space. The highest concentration is in light industrial, with 12
million square feet of office space, followed by commercial and retail development of 9
million square feet. Office development occupies another 6 million square feet of
developed space.
Norfolk/Virginia Beach International Airport (Industrial Park)
This section of Virginia Beach's business district encompasses more than 4 million
square feet of light industrial and office space within the 250-acre Airport Industrial
Park, located adjacent to the Norfolk/Virginia Beach International Airport. Currently,
the area houses numerous national and international manufacturing, warehousing and
distribution centers, with another 25 acres available for development.
Regional Urban Commerce Center
The city's second largest commerce district is located at the Newtown / Witchduck /
Virginia Beach Boulevard convergence off of Interstate 264. This area contains 6
million square feet of low and mid-rise offices, light industrial and commercial & retail
space. Another 40 acres are available for development.
Retail Mixed Use Center
(Oceana West / Lynnhaven Mall area)
Several domestic and foreign firms occupy 1500 acres of of Lynnhaven Parkway near
the Interstate 264 interchange, including Lynnhaven Mall, the city's largest enclosed
retail shopping center. The area is also home to several upscale office and commercial
complexes. Currently 225 acres are availabel for development.
Retail Center (Hilltop Area)
Hampton Roads' highest per capita retail sales takes place in the city's trendy First
Colonial business corridor, home to numerous upscale establishments, including
jewelry and fine fashion retailers.
Visitor / Cultural Center
Virginia Beach is one of the country's top tourism destinations, attracting millions of
visitors and contributing more than $500 million to the city's economy anually. Visitors
can enjoy beach views while attending business conferences in any of the city's 30
conference hotels. The Oceanfront area also contains over 1.5 million square feet of
retail shops along Atlantic and Pacific avenues, and more than 250,000 square feet of
office space.
Campus Employment Center (Corporate Landing Area)
Located south and west of Oceana Naval Air Station, along General Booth Boulevard,
Dam Neck Road, Princess Anne Road and the proposed alignment of the new
Southeastern Expressway.
.........................................
Property Search (return to top)
I New Industrial Building Search I Office Building Search I Site Search
(The links above will take you to the relevant pages on the Internet.)
.........................................
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About Virginia Beach: Local Information
Economic Opportunities
Technology Zones
The City of Virginia Beach has a Technology Zone Ordinance that will allow for the
designation of a Technology Zone.
A qualified technology business, as defined in the ordinance must meet the following
criteria:
(a) provide a minimum capital investment of $20,000,000 in personal and/or improved
real estate(exclusive of raw land cost) or provide for the creation of 300 new full time
employees; and
(b) must pay its employees average salaries, including benefits, of at least $50,000
annually.
A qualified technology business will be entitled to a rebate of a percentage of the
business, professional and occupational taxes over a five-year period.
Additional incentives include the reimbursement of building code fees, subdivision and
site plan review fees, as well as water and sewage connection fees.
..........................................
Available Labor
The Hampton Roads (cities of Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk
and County of Isle of Wight.) labor force consists of both civilian and military personnel
and is diverse in backgrounds and experiences. The labor force is abundant as a
resource for business and industry and is evaluated by employers to be reliable and
energetic. Employees in the Virginia Beach area have a reputation for low absenteeism
and turnover rates, outstanding work ethics and military influenced work discipline.
In terms of major occupations, the Hampton Roads labor force exhibits a well-balanced
and healthy distribution of managerial, professional, technical, blue collar and clerical
support personnel in a wide variety of business and industry. The above chart highlights
the excellent Occupational Mix in 2005 in Hampton Roads.
The Unemployment rate for our region is 3.5% (more information can be found at
http://velma.virtuallmi.com). However, Virginia Beach is fortunate to have the following
"special components" of available high quality of labor that are not reflected in the
unemployment rate:
Active Duty Personnel that leave the military on an annual basis and remain in the area
number 12,000 and bring disciplined production, technical, managerial, computer and
electronic skills to the labor force. Military spouses in the area number 40,000 to 50,000
and a majority have two years of college and administrative, secretarial, customer
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An Interactive Guide to Starting a Business in Virginia Beach
service, bookkeeping and computer skills. Many work full and part-time to supplement
family incomes.
Students in the area colleges number almost 80,000, and also seek full-time, part-time
and seasonal employment during college. Upon graduation, they also provide a good
supply of qualified workers.
Commuters crossing into Virginia from North Carolina on a daily basis number 13,500
and bring additional skills to the labor force.
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About Virginia Beach: Local Information
All About Virginia Beach
Background Information
Located in the southeastern corner where Virginia meets the sea, Virginia Beach is part
of the Hampton Roads Metropolitan Statistical Area (MSA) that includes the cities of
Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia
Beach and Williamsburg and the counties of Gloucester, James City, Mathews, Isle of
Wight, York and the North Carolina county of Currituck. This is the 31st largest
metropolitan market in the U.S., with a population of more than 1.5 million people.
History
The first settlers to America landed in Virginia Beach in 1607, erected a cross, and
named the spot Cape Henry. First settlement inside the city limits of Virginia Beach was
made on Lynnhaven Bay in 1621; but, the area that is now Virginia Beach remained
thinly settled for well over a century. In the 1880's, the resort was developed along the
beach, and by the turn of the century, the city was very popular. In 1906, it became a
town; the rest of the area remained undeveloped.
During World War II, the Navy built Oceana Naval Air Station in what is now the middle
of Virginia Beach. In 1963 the resort town of Virginia Beach merged with Princess Anne
county to form the modern city. Virginia Beach is now the most populous City in
Virginia. Virginia Beach is part of the Norfolk-Virginia Beach-Newport News VA-NC
Metropolitan Statistical Area (MSA).
If you would like to learn more about the history of Virginia Beach, please visit the
Virginia Beach Web Site's more extensive section on Virginia Beach history.
Size
Virginia Beach has 310 square miles with 38 miles of ocean and bay front beaches. The
city is situated an average of 12 feet above sea level.
Population
Virginia Beach is the fastest growing city on the East Coast and the largest city in the
state with nearly half a million residents. It is expected to surpass 525,000 by the year
2020.
Government
As the first recipient of the American Society of Public Administration (ASPA) National
Innovation Recognition Award, Virginia Beach was cited for excellence and innovation in
organizational development, strategic planning, quality initiatives and process
improvements. The award recognizes Virginia Beach for successfully changing its
organization to improve local government, be more competitive and more citizen and
customer focused.
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...
The Economy
The Virginia Beach economy is comprised of a diverse range of activities. In 1997,
contributions to the economic welfare of the city included the following:
. With 156 farms and approximately 32,700 acres of land under cultivation,
agribusiness contributes more than $55 million to the city's overall economy.
. The construction and real estate industry adds over $422 million.
. Convention and trade shows produce $70.6 million in gross revenue.
. Virginia Beach is home to four military bases with a combined annual payroll of
$913 million for 32,000 armed services and civilian workers.
. The city's popularity as a tourism destination brought 2.5 million visitors, who
spent over a half billion dollars here.
. More than 7,750 retail and wholesale businesses in the city generated $3.2 billion
in taxable sales.
Business Distribution
Virginia Beach has five major concentrations of office, industrial and commercial
property which are situated along a corridor that runs the length of the city-closely
paralleling Interstate 264-from adjacent the Norfolk/Virginia Beach International
Airport to the Atlantic Ocean. Other smaller nodes of office and commercial activity are
located throughout the city. Available acreage, plus existing industrial, warehouse and
office space, offer a variety of options for business start-up, expansion and relocation.
Workforce
The Hampton Roads labor force consists of both civilian and military personnel and is
diverse in background and experience. The labor force is abundant and is evaluated by
employers to be productive, reliable and energetic. Employees in Virginia Beach have a
reputation for very low absenteeism and turnover rates, outstanding work ethics and
military influenced work discipline. The Hampton Roads labor force exhibits a well-
balanced and healthy distribution of managerial, professional, technical, blue collar and
clerical support personnel in a wide variety of business and industry.
Communications &. Utilities
Excellent communications and utility infrastructures serve Virginia Beach. Businesses
and the community benefit from the region's three fiber-optic rings. Verizon provides
local telephone services in the city. The area is also served by a daily and weekly
newspapers, eight local television stations, 44 radio stations, and cable television. The
city has a comprehensive utility structure including water, electricity, natural gas,
sewage, and solid waste.
Transportation
Hampton Roads has a comprehensive and efficient transportation network with a
strategic geographic position to provide a strong link between national and international
markets. The Virginia Beach area's mid-Atlantic location puts business within a 750 mile
radius of two-thirds of the U.S. population and business. Hampton Roads offers a unique
and integrated transportation system.
. Virginia Beach is located at the mouth of the Chesapeake Bay and alongside the
Port of Hampton Roads, one of the finest natural harbors in the world. Each year,
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over 63 million tons of cargo move through Virginia's ports.
. Rail service via Norfolk Southern, CSX and other smaller rail lines reach out from
Virginia to serve every major industrial center.
. Minutes away, Norfolk International Airport serves business and industry alike with
over 200 daily flights on seven major and seven commuter airlines.
. A network of interstate highways and enlarged state highways provide corridors to
transit Hampton Roads and reach nearby major north-south routes I-95 and I-85.
Beach Lifestyle
Residents are drawn to Virginia Beach for a variety of reasons including an
outstanding water-oriented high quality of life and an ideal location with 38 miles of
shoreline on the Atlantic Ocean and the Chesapeake Bay, 28 miles of public
beaches, 79 miles of scenic waterways and 60 miles of biking trails. Virginia Beach
is known as one of the largest resort cities in the country with excellent beaches
and water sports, tennis, golf, boating and sailing, fresh and salt water fishing,
hunting and camping facilities, as well as numerous other recreational activities.
. Climate: Virginia Beach's temperate maritime climate is influenced by the
nearby Gulf Stream. Mild winters rarely below freezing and summers with
great beach weather extend from spring through fall.
. Safe City: For the tenth consecutive year, Virginia Beach has had the lowest
crime rate in the nation for a city of its size.
. Cultural Amenities: Virginia Beach offers many cultural amenities including
the symphony, opera, performing arts and museums. More than 200 arts and
cultural organizations are located in the city. The Virginia Aquarium in Virginia
Beach recently completed a $35 million expansion and is one of the top most
attended aquariums in the nation. Preserved 17th, 18th and 19th century
homes, churches and shrines can also be toured. Virginia Beach's
commitment to the arts is evidenced by the 95,000 square foot Central
Library, a 32,000 square foot $7.5 million Contemporary Art Center of
Virginia, the 20,000-seat GTE Virginia Beach Amphitheater, and a newly
renovated oceanfront resort strip.
. Recreation: There are three major state and regional parks and three large
national wild life refuges in the city making Virginia Beach a hot ecotourism
destination. In addition, the city has 11 public golf courses, 18 marinas with
public access, three fishing piers, and the new Virginia Beach Sportsplex.
. Medical: The Virginia Beach area enjoys an outstanding reputation as a
leader in innovative health and medical care. Hampton Roads has a well-
coordinated regional health care system with state-of-the-art equipment and
facilities and specialists in every field.
. Education: The Virginia Beach Public School System enjoys an excellent
reputation throughout the Commonwealth of Virginia and across the country.
The MSA also has top notch higher education programs with 11 colleges and
universities and two community colleges, including the new Virginia Beach
Higher Education Center and the upcoming Advanced Technology Center, as
well as the College of William and Mary, Old Dominion University, Norfolk
State University, Virginia Wesleyan College, Eastern Virginia Medical School,
and Tidewater Community College.
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Infrastructure
Transportation Services
Highways
Major highways serving area:
. Interstate 64 and 664 which connect with Interstate 95 & Interstate 85
. U.S. Route 13 (to Eastern Shore)
. U.S. Route 58 (Virginia Beach Blvd.)
. U.S. Route 60
. Virginia Beach - Norfolk Expressway (Virginia Route 44)
Motor Freight Services (MSA)
Over 135 motor carriers and 50 common carrier terminals
Overnight Package Delivery
Federal Express, U.P.s., DHL Worldwide Express, Emery Worldwide, U.S. Mail Express
and a number of other couriers serve the area
Bus Service
. Greyhound - Trailways Bus Lines
. Hampton Roads Transit - local service
Railroads
. Norfolk Southern Railway
. Eastern Shore Railroad, Inc.
. Connection to CSX Transportation
Airport
Less than a mile from the Virginia Beach city limits is Norfolk International Airport, a
modern facility averaging 194 commercial flight arrivals & departures daily.
Major airlines serving the region are American, Continental, Delta, Independence Air,
Northwest, Southwest, and USAirways. Commuter service is available through
Continental Express, United Express, American Eagle, Comair / Delta, Northwest Airlink,
and USAir Express. General aviation service is also provided.
Cargo airlines and air freight forwarders have offices in the airport complex.
Waterways
. Port of Hampton Roads - 25 square miles (65 km)
. 60 million tons of cargo - 1995
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. Channel depth to 50 feet (14 meters)
. Foreign freight forwarders - 53
. Ship offices & agents - 52
. Inland Waterway (Maine to Florida)
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