Chapter 7 discussed the principles involved in finding the right location for your business.We talked about engaging with your real estate agent and setting clear expectations of what you want in your office. We then delved into the many factors relevant to choosing a location that will serve the needs of your business model, your staff, and your patients. We then discussed the factors that weight the balance between the cost of the lease and the benefits of being in a certain location.There was a review of various city ordinances and how to be aware of what your specific municipality requires. Finally, we explained zoning and how it can affect your business. The following exercises will help reinforce the concepts presented in the textbook.
Key Terms
Curb Appeal
The visual presentation of a property from the outside and its influence on how the property and the business within is perceived by bystanders
Lease Rate
The amount of money paid over a specified time period for
the rental of an asset, such as real estate property or a piece of
equipment.
Zoning
The division of land and the assignment of a category of use of that land for various industries (i.e. commercial, residential, industrial, etc.) by a municipality.
Ordinance
legislation enacted by a municipality
Municipality
(Latin – municipium meaning “free city”) a city or town that has incorporated itself and runs its own local government
Mandamus
A judicial writ (order, judgment) issued as a command to a person to perform a public or statutory duty, usually in the public interest. For local small businesses, a mandamus would be municipality laws such as
having handicap access to a building, parking laws, and pet lease laws,
among others.
Building Codes
A set of laws, regulations, and guidelines that specify the standards for constructing buildings as well as the use for that building (i.e. food use, patient use, residential use, etc.)
General Welfare
Providing for the welfare of the general public as basic goal of government. The preamble to the U.S. Constitution cites promotion of the general welfare as a primary reason for the creation of the
Constitution. Promotion of the general welfare is also a stated purpose in state constitutions and statutes.
Location, Location, Location
The potential value to a property and its potential to profit a business based on its location
Cost Benefit
A concept that addresses the relation between the cost of an undertaking and the value of the resulting benefits.
Expected Outcomes
Understand the things you need to consider when deciding where you want to have your office
Have engaged with your real estate agent and be sure he/she understands your needs
Recognize the factors relevant to choosing a location that will be accessible to your patient population
Recognize the key factors that weigh the balance between the cost of the lease and the benefits of being in a certain location.
Understand the city ordinances of your municipality as they relate to your business
Understand zoning and what zoning regulations relate to the location of your office
Key Concepts
The main types of taxes to be aware of are income tax, employmenttax, estimated tax, and excise tax.
The major tax numbers you will need to have include an EIN, a TIN,and an HIN.
The government website irs.gov is a major resource for gathering further information on tax numbers and tax forms.
Work with your attorney to obtain your EIN. After doing so, you will need an unemployment insurance number, tax use number, and additional licenses your municipality may needs.
A 101 Error means your EIN application was rejected. Work with your attorney to find out why and correct as needed.
An EIN, UI#, tax use permit is required for running your business.Work with your attorney to obtain them correctly.
You are automatically enrolled in the federal EFTPS after obtaining your EIN. This allows you to make tax payments online.
FUTA imposes a federal employer tax used to help fund state workforce agencies.
The Schedule K-1 (Form 1065) Form is issued annually for an investment in partnership interests. Its purpose is to report each partner’s share of the business’s earnings, losses, deductions, and credits.
The P&L summarizes the revenues, costs and expenses incurred during a specified period, usually a fiscal quarter or year. It is synonymous with the income statement.
The Balance Sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity. It provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.
Most US businesses are taxed as pass-through entities that, unlike C corporations, are not subject to the corporate income tax or any other entity-level tax. Instead, their owners include their allocated shares of profits in taxable income under the individual income tax. Pass-through businesses include sole proprietorships, partnerships, and S corporations.
Form 1040 is the standard tax form. Schedule A provides for itemized deductions. Schedule C is a P&L for those self-employed. A 1099 is a general form to report all self-employed income.
Having a knowledgeable, experienced, and competent accountant or tax attorney who demonstrates an investment in the success of your business is an invaluable asset.
Chapter Slogans
Your broker works for you.
Do your research.
What do you want?
THINGS TO CONSIDER
What do you want?
What is your budget?
How much renovation will the place need?
Is the renovation cost worth the lower rent and location?
What are the city ordinances for your type of business?
Is the location in the appropriate zone for your business?
POUND THE PAVEMENT
1. Visit your local city hall. Find out where certain departments are located such as where you can get blueprints, where you get licenses issued, and who to speak to about questions over renovations and whether they meet zoning and ordinances. Get to know someone or a few people and build a positive rapport so that when you need them, they will already know you.
2. Pay attention when living your own life.When you go to get coffee, where is the business, how easy is it to get to, what is its accessibility? Is it is a great location? Does it stand out among other business? As you consider other businesses pros and cons of their location, consider how it would affect your own patients.
