Questions:

1. Why we should define first our business goals and plans?

2. Why we need to keep ourselves and our employees motivated?
3. How to plan according to business needs?
4. Why we need to organize our business items?
5. What are the benefits when we adhere to our commitments?
6. How to value our customers?
7. How the use of computer helps to organize our business?
8. Why we should organize our business?
9. What are the benefits of having organized business?
10. When do we need to organize our business?
11. Where we should start organizing business?
12. How the sole proprietorship help the business to be organize?
13. What are the advantages of having a sole proprietorship?
14. What are the disadvantages of having sole proprietorship?
15. How to separate business and personal finances?
16. How the interaction with the employees help to organize the business?
17. What are corporation?
18. What is the source and amount of borrowed money for the business?
19. How much personal control do I want to maintain over business decisions?
20. What form of organization will minimize taxation of the business?
21. How much personal responsibility should I take for business debts and liabilities?
22. What will happen to the business if I can no longer manage it?

23. What organization form will best help me to achieve my short-and long-term business
goals?

24. What are the importance of having organized business?

25. What should have the manager characteristics to organize his or her business?

How to Organize Business: Organizing Business Tips

Here are some tips to good business organization:
1. Define your business goals and plans: Write down your business goals and how you
plan to achieve them in a clear and precise way and stick to it. Keep this plan visible to
remind yourself of your plan from day to day. Buy an organizer or use software to do this.
By studying and sticking to your plan, you can evaluate your position as to where you stand
and make any necessary adjustments to get back on track.
2. Keep yourself and your employees motivated: When you and your employees are
happy at work, it shows - and customers notice it immediately. It also improves efficiency
and that shows your customers that you and your team are well- organized.
Keep rewarding your employees with any method that you feel works, so as to keep their
morale high.
3. Plan according to business needs: There are some things that need to be planned
daily, weekly, monthly and yearly. Make a list of these items and schedule them accordingly.
Daily planning should be done in the early morning or in the late evening the previous day.
Write these things down so that you do not forget them.
Use day planners available at office supply stores or use a computer program to remind
yourself of important events. With the many new inventory and accounting software
programs available, you can plan your stock, increase product rotation, and manage your
expenses - thereby increasing your cash flow and profit margin.
4. Organize your office items: Keep your office or store as neat as possible. Keep items
that you require everyday in the same place so that you do not have to hunt for them every
time you need them.

Clear out items that you do not need or have not used in a long time. This will prevent lost
time, helping you to concentrate on important issues instead of trivial things.
5. Adhere to your commitments: Keep your promises to customers,SUPPLIERS

and

employees. Making payments on time to your suppliers indicates a well-organized business.

Making deliveries at the agreed upon time to your customers will win their trust and will help
you in getting repeat orders, as well generate word-of-mouth advertising.
6. Keep in touch: Keeping in touch with your customers indicates that you care about them
and value their business. Send them brochures or e-mail them about new products and
services that you offer.
Mail your customers birthday cards or greeting cards on special occasions and holidays. This
shows a lot about how organized your business is.
7. Use that computer: A computer is like having an extra brain. Use it as much as possible.
Do your accounting, inventory, delivery scheduling, and even your letter writing on it. It will
save you a lot of time and effort - much more than doing these tasks manually.
With newer and faster applications, it is now possible to have a paperless, clutterless office.
Having access to data at your fingertips indicates good organization. Just don't forget to
make a regular backup of your data.
The more organized your small business is, the easier it will be to operate day-to-day,
leaving you more time to concentrate on increasing your profits.

How to Organize Your Business

Adapted for Maine from Iowa by Jim McConnon, Extension business and economics specialist
For information about UMaine Extension programs and resources,
visit extension.umaine.edu.
Find more of our publications and books at extensionpubs.umext.maine.edu.
One of the first things to think about if youre starting a small business is how you want to
organize it. Answering the following questions will help you decide.

What is the source and amount of borrowed money for the business?

What skills will the business need that I cannot provide?

How much personal control do I want to maintain over business decisions?

What form of organization will minimize taxation of the business?

How much personal responsibility should I take for business debts and liabilities?

What will happen to the business if I can no longer manage it?

What organization form will best help me to achieve my short-and long-term business
goals?

Your answers will strongly influence and be influenced by the legal business form you select.
However, that form may change with growth and needs of the enterprise. One example of a
form changing would be a sole proprietorship evolving into a partnership (which could add
shared expertise and resources) and then to a corporate structure, which could enhance
management continuity and financing capabilities (if shares are sold).
Basically, the form of organization depends on the type of business, how many owners or
investors are involved and how tax and liability issues will best be handled. Some
businesses, especially for tax and liability reasons, will want to incorporate from the
beginning. Others may operate for their lifetime as sole proprietorships. Any time two or
more unrelated people are involved in a business, they will probably want to create some
type of partnership agreement or a corporation. If youre considering this option, get help
from a tax and legal expert.
The basic forms of business organization, with some advantages and disadvantages, are
discussed in this fact sheet.
Sole proprietorship
The sole proprietorship is a business that is owned and operated by one person. It is the
simplest and least expensive business structure to form. Many start-up companies choose
this form until it becomes profitable to enter into a partnership or corporation. The sole
proprietorship form is often useful for a new business because it has a simple structure and
is easy to set up. It is the least regulated form of business organization. Its profits are taxed

as part of the owners individual income. The business owner in a sole proprietorship is
responsible for all financing, management decisions and liabilities of the business.
Advantages

You are your own boss

Less government regulation than other forms

Simple structure

Ease of formation

Business losses lower personal tax

Disadvantages

Risk losing business with death or disability

Total personal liability

Profits taxed as personal income

Limited financial resources

Limited management potential can only expand with after tax dollars

General partnership
A general partnership is a legal business relationship in which two or more persons agree to
share ownership and management of a business. With a general partnership, you can pool
capital and management resources of two or more people. It is easy to set up and needs no
special registration (except for any trade names the partners use).
A written agreement among partners is not required by law, but helps clarify business
arrangements and avoid misunderstandings. You may want a lawyer to draw up a written
partnership agreement. Any agreement must follow the Maine Code on general partnerships.
When signed by all partners, the agreement is an enforceable contract.

The partnership agreement should include:

a list of the rights and responsibilities of each partner and his or her heirs

the management and continuity arrangements for the business in the event of death
or disability of one of the partners

the profit distribution plan

any special conditions or arrangements that may affect any of the partners through
operation of the business

Withdrawal of one partner or adding another automatically ends a partnership unless the
agreement says otherwise. So you can avoid business liquidation with a partnership
agreement that covers transition of ownership and continuity of the business.
Partnership liabilities extend to personal assets of each of the general partners. Each general
partner is held personally liable for all business obligations of the partnership. Each partner
is taxed at his or her personal tax rate on his/her share of the partnership income.
Advantages

Simple organization

Shared personal resources

Shared financial resources

The right to select partners

Disadvantages

Cost of organization

Unlimited liability

Limited decision-making

Limited life of business

Sharing of profit

Limited partnership
A limited partnership is a particular form of partnership that gives investors special tax
advantages and protection from liability. The limited partnership is like a corporation in many
respects. It allows people to invest in the business, but their liability is limited to the amount
of their investment or as agreed in the limited partnership agreement. The partnership must
include at least one general partner who has general liability for the debts of the limited
partnership. The limited partner usually exercises no control over the business of the
partnership, but is merely an investor. The general partner usually manages the business.
This form is often typically used to get more funds for a business. Both general and limited
partners are taxed at their personal rate on their share of taxable income from the business.
The limited partnership itself is not taxed.
A summary of the limited partnership agreement, along with the business name, must be
filed with the secretary of states office, which sends a copy to the county recorders office.
Advantages

General partner maintains control of business

Limited partner can invest with limit on liability

Easy way to secure financial resources

The business is not directly taxed

Disadvantages

More complex organization

Limited partner has no control of business

General partner has general liability for the business

Corporation

A corporation is a separate legal entity from its owners, the shareholders. It can make
contracts, it is liable for any obligations, and it pays taxes on earnings. It is a legal person.
A corporation attracts capital investment funds by selling shares of stock in the company to
investors, or trading stocks for assets. Generally, stockholders are not liable for claims in
excess of the current value of their shares. Corporate officers may become personally liable
in some cases, but generally creditors can only lay claim on the assets of a corporation.
The corporations identity makes its continued life possible. A death or stock sale has little
effect on corporate managements ability to continue with business.
Corporate income is taxed at its own rate. More attractive corporate business tax rates were
set with the Tax Reform Act of 1986. The portion of corporate after-tax income given to
shareholders as dividends is taxed again as personal income of shareholders.
To incorporate, you must apply to the secretary of state by filing articles of incorporation.
The secretary then grants a certificate of incorporation. Sale and exchange of stock are
governed by state law, to protect the public investor, and special registration is needed to
sell stock to the public. The name of the corporation must be approved by the secretary of
state to avoid duplication. The state charges a one-time fee for filing the articles of
incorporation with the secretary of state.
After receiving and filing the articles of incorporation and approving the corporate name, the
secretary of state sends the document to the county recorders office in the county where
the office of the registered agent for the corporation is located. The county recorder files the
articles of incorporation in the county. There is a one-time charge for this service.
After the county recorder has filed the articles of incorporation, the corporation receives a
certificate of incorporation from the secretary of state. The corporation can start doing
business, right after the certificate of incorporation is issued by the secretary of state. The
corporation must also print a notice of intent to do business in a newspaper with countywide distribution to establish good standing in the county.
Articles of incorporation can be written by members of the corporation or a lawyer. However,
using a lawyer or accountant can sometimes help you avoid many problems and pitfalls of
establishing a legal corporation in Maine.

Dissolving a corporation in Maine requires two filings with the secretary of state: a statement
of intent to dissolve and articles of dissolution.
Corporations are a more costly and complicated form of business organization than
partnerships. Articles of incorporation must also be filed in counties where offices are
located or real estate is held. Each year, an annual report must be filed with the state. There
is a small charge for filing, but the fee goes up as capital assets of the corporation increase.
Many sole proprietors feel they should incorporate to limit their business liability. This
certainly is an advantage, but unless the assets of the business are substantial, the officershareholder may still have to sign for the business.
Advantages

Shared personal resources

Shared financial resources

Perpetual life increased management capability

Easy transfer of business

Limited personal liability

Disadvantages

Possibility of double taxation

Complex organization

More costly operations

More complicated management

More government

S corporation

Entrepreneurs who decide on a corporate form of business may want to consider S

corporate status. Besides limiting liability, the tax advantages are a factor to consider for
this option. To qualify for a S Corporation structure, a corporation must meet all of the five
following requirements.
1. It must be a domestic (United States) corporation.
2. It must have no more than 35 shareholders.
3. It must have only one class of stock.
4. All shareholders must be individuals, estates or certain trusts.
5. None of the shareholders can be non-resident aliens.
The S structure is a corporate form for smaller businesses that allows a tax burden shift to
shareholders. The S corporation is not taxed, but must file an informational return. Income
is given to shareholders and is taxable to the shareholders whether or not its distributed to
them. Ordinary tax losses are also personal deductions.
You set up an S corporation the same way you set up a regular corporation. The S
structure merely allows for business profits to be taxed on personal income.
Limited Liability Company
The Maine legislature has recently approved a new form of business organization called a
Limited Liability Company (LLC). The LLC form of organization combines some of the best
features of the S corporation and the partnership forms of business. Limited liability
companies enjoy the benefits of limited liability associated with S corporations, together
with the flexibility of partnerships (in terms of taxation economics and number and types of
owners). Contact the secretary of state to learn how to form a limited liability company in
Maine.
Conclusion
There is no best method of determining the right form of business organization for your
enterprise. You should think about all factors before you make a decision. If youre

considering starting a business, consult lawyers, tax accountants and other professionals
(depending on the nature of the business) for advice.
1. Talk to a CPA
Nows the perfect time to make an appointment with your tax advisor, as youll both have
more time to discuss your financials and will be focused on long-term strategy, rather than
getting through this years tax season. Most importantly, youll still have plenty of time to
act on his or her suggestions while its still 2012.
2. Re-evaluate Your Business Entity
Many small businesses start out as sole proprietorships or partnerships, but then eventually
transition to another entity as they grow. For example, if your business is not incorporated,
you may want to consider incorporating (or forming an LLC) to shelter you from some
financial risk and possibly save money on taxes.
Sometimes an entity is formed with one income target in mind, and you might need to
reconsider the entity for a different income level. Failing to adjust your business entity for
your revenue can be a costly mistake. Discuss the different legal entities with your CPA, so
you can determine the right entity for your situation and the right time to make the change.
3. Review Estimated Tax Payments for 2012
Now that 2012 is in full swing (and your 2011 taxes are done), its a good time to review
what your business has made year to date and your forecast for the rest of the year. Then
assess your estimated tax payments to avoid having to dole out underpayment penalties
next year. Likewise, theres no reason to overpay with your estimated payments; interest
rates may be low, but theres still better things your business could be doing with that
money.
4. Separate Business and Personal Finances
If you havent done so already, take the steps to keep your personal finances and expenses
separate from those of your business. This is mandatory if your business is an LLC or
Corporation, but its good practice for sole proprietors as well. This means a few things:

Open a business credit card: While I normally dont recommend opening any
new credit lines, in this case its a smart idea. By putting all your business
expenses on the business card, youve got an instant audit trail of your years

expenses when tax time rolls around again. Of course, you should be saving
merchant receipts as well.

Open a business checking/savings account: If youre operating as an LLC or

Corp, your business needs to have its own checking account. If youre a sole
proprietor, youre able to use your own personal checking account. However,
consider opening a dedicated savings account or money market account where
you can transfer approximately 25% for each check or payment received as your
own personal tax withholdings. This strategy will make it far less painful when its
time to pay your self-employment and small business taxes.

5. Use a Cloud App to Get Organized

Theres no shortage of affordable cloud-based and mobile apps to help small businesses
streamline their operations and finances. Of course, in the daily grind of running your
business, its all too easy to stay with the status quo. This spring make the time to try out at
least one new web-based tool. For example, theres FreshBooks for invoicing, Expensify for
expense reporting, and countless other time tracking, travel, and industry-specific apps.
If youre not sure where to begin, consider what make up the toughest parts of managing
your finances. Are you slow to invoice clients? Did you have trouble digging through random
receipts while filling out your Schedule C this year? Do you forget to track your mileage for
client meetings? Your biggest headaches offer the best opportunities to improve your
execution.
6. Dont Forget Traditional Cleaning
When was the last time you cleaned your laptop keyboard or wiped down your phone
headset? Ever mistake dirt on your display for punctuation? Theres no reason not to take
the term "spring cleaning" literally and clean your devices to keep them looking their best.
None of these tasks will necessarily be things youll enjoy, but once done, youll be amazed
at the difference they can make to your productivity, bottom line, and mindset.