All you need to know to register your Business in the District of Columbia

Registering my business:  What for?

 In today’s post, we will look at the steps to obtain your business license, and we will help you navigate through the maze of business regulations. In order to operate in the DC area, you need to have your business registered or licensed by the Department of Consumer and Regulatory Affairs (DCRA).  For your convenience, here’s the link:  www.dcra.gov.  On this website, you’ll find: registration forms and documents, answers to frequently asked questions, the business name availability tool and a registered organization search.

The Licensing Process:

The following steps apply to all Business License applicants:

Seed #1: Employer Identification Number (EIN)

Generally, you’ll need an EIN if you answer “Yes” to the followings: Do you have employees?, Do you operate your business as a corporation?, LLC or partnership… (See DCRA website for more info.)

Seed #2: Certificate of Occupancy (CRA-5)

What is it? A Certificate of Occupancy or Home Occupation Permit is required to show that your business is operating in a building that meets building and zoning code requirements for its intended use. To file for a Certificate of Occupancy for your business, you must either have a commercially zoned business location or operate your business from home. Applications are available online at www.dcra.dc.gov under the heading called “zoning”.

Seed #3: DC Business Tax Identification Number (FR-500)

Tax ID numbers are used to provide information on ownership, location and type of business, which is needed to determine an employer’s liability to pay unemployment taxes.

Tax forms can be accessed online at www.otr.cfo.dc.gov

Seed #4: Certificate of Registration

You will receive a Certificate of Registration from the office of Tax and Revenue once you file your FR-500.

Seed#5: Clean Hands Certificate

The Clean Hands Certificate is an affidavit stating that you do not owe more than $100 to the District Government.

Seed#6: Basic Business License

A business will need a BBL if a business or non-profit requires city approvals, inspections or investigations. These rules apply if you conduct transactions in the District, even if your business is not located in the city.

Seed#7: Business Trade Name

The District of Columbia enacted legislation establishing a registration program for trade names. This law benefits the business community by:

-Allowing businesses to use created names in conducting business, including transacting business with vendors and financial institutions.

-Providing an official record of all owners associated with a created name

-Allowing businesses with created names to undertake legal action under that name (Doing Business As, or DBA).

You can register your trade name online at www.dcra.dc.gov

Content taken from The Doing Business in DC 2010 guidebook, published by the Washington, DC Economic Partnership.

*More information on LLC’s: If you want to learn more about the LLC Business structure, The DC WBC offers classes on LLC’s, taught by Derryl Maxwell, an attorney from the community Economic Development Project at the DC Bar Pro Bono Program. Find out more about our workshops at: http://dcwbc.org/index.php?option=com_seminar&Itemid=57

Interview of the Business Licensing Gardener:

Harold Pettigrew, Deputy Director of the Department of Consumer and Regulatory Affairs (Business and Professional Licensing Administration)

1. What types of businesses do you license?

All businesses operating in the District of Columbia must obtain a basic business license (BBL). The Department of Consumer and Regulatory Affairs (DCRA) licenses businesses in approximately 165 categories ranging from businesses in various categories ranging from home improvement contractors and single family rentals to massage and food establishments. 

2. What is the general cost of a business license?

The cost of a BBL depends on the type of business activity the applicant will be conducting in the District of Columbia.  For example, if an individual is interested in getting a bed and breakfast BBL, the cost is $333.30, whereas, a one family rental business license is $190.30.  The costs for obtaining a specific BBL are located online at dcra.dc.gov.

3. What do I need to apply for a business license?

Certain BBL categories require steps specific to the license category.  For example, a restaurant BBL requires an inspection and approval by the Department of Health, and a pawnbroker BBL requires an interview and approval by the Metropolitan Police Department.  The primary steps, however, required for all license categories are:

·         Step 1: Register with DCRA's Corporations Division

·         Step 2: Register with, or obtain a Clean Hands Certificate from the Office of Tax and Revenue

·         Step 3: Obtain a Certificate of Occupancy or Home Occupation Permit from DCRA

·         Step 4: Complete other requirements based on BBL category

·         Step 5: Complete and submit the BBL Application

4. Do I need a license if I operate my business from home?

Yes.  If operating a business from a residential property, a Home Occupation Permit (HOP) and Basic Business License (BBL) are required. 

That’s it Folks for this week! Rendez vous in two weeks for more business gardening.  And don’t forget to keep your New Year’s resolution to improve your business by registering for our Winter/Spring Classes! 

 “The smallest seed of faith is better than the largest fruit of happiness” Henry David Thoreau, American philosopher.

Happy gardening J

Got Your Dream Biz Idea? Take Action Now!

Before starting a new plantation to your garden, let’s see what the right answers to our first Business Quiz Post are:

Question #1

What is the most important quality for entrepreneurs to have?

Willingness to take initiative—Risk taking, organization and money mindedness is important, but none of them matter without action.

Question #2

Are you good at both short term and long term planning?

Always --This will mean you have to write a Business Plan. (The DC WBC has a Business Plan Lab that can help you focus your goals. For more info go to: http://dcwbc.org/index.php?option=com_seminar&Itemid=57 or contact Florence@dcwbc.org)

Question #3

Do you like to take risks?

Sometimes--There’s a perception that successful entrepreneurs are wild risk-takers. Actually, successful entrepreneurs are always on the lookout for opportunities with acceptable risks-that is, risks that can be mitigated or managed.

Question #4

Do you expect your total household income to rise within 1 year of starting a business?

No--In 2005, 35% of small business owners saw their income decrease within the 1^st year of starting a business. Only 16%of the current business accounted for 100% of their household income.

Question #5

Are you good at following through on your ideas/plans/projects?

Yes—Persistence pays!

Now that you have the vision for your business and weighed the pros and cons, you need to take action! It’s time for the Basics Steps of Starting a Business.

Basic Steps of Starting a Business: The questions you need to ask yourself:

1/ Know your Business

-What are you selling?

-Who are your customers?

-Who is your competition?

2/ Write a Business Plan

- How will your business make money?

- How will you finance the business?

3/ Find a location 

-Where are your customers?

- Where will your Business operate?

-  How much space will you need?

- What are the zoning requirements?

4/Make Your Business Legal  

 - What Business Structure will your company have?

 - What kind of license do you need?

 - What tax forms do you need?

5/ Get Financing          

-Will you need a loan?

- Do you qualify for a loan?

- What are the sources of Financing?

- What financial incentives are available?

To help you through those steps, The DC WBC Team is here to answer all of your questions.

Also, if you need assistance with choosing the right location for your Business, go to our Business Fertilizer tab under “Assistance with choosing a location for your Business”. Resources are listed for you.

Business Interview:

Evelyn Bandoh, President of EAB Creative Planning Services and Consultant for the Business Plan Lab workshop at the DC WBC.

What is a Business Plan?

In short, a business plan is important because it serves as a road map for any business, whether it is traditional, social or creative in nature.  From this business plan, existing and emerging entrepreneurs can determine the feasibility of their business and make changes where necessary to ensure success.  The plan allows both entrepreneurs and business owners to plan for the end, while working out the beginning. It serves as a "self check" and "self reflection" document.  Will this idea be successful?  How does it create value?  Who are my customers and clients?  How will I reach them?  Does a market for my product even exist?  The best question that a business plan helps us determine is 'HOW WILL I PAY FOR ALL OF THIS" and "WILL I MAKE MONEY AND WHEN". 

What are the most important parts of a Business Plan?

Some of the most important parts of the business plan are (1) Key team members- who is helping to run this business and make sure its successful (2) Marketing & Sales- is their a market for the product?  If so, what is your strategy to sell it and when you sell, how much will you sell?  Selling is how one generates revenue for the business that allows it to maintain current operations and eventually grow into a mature business and then finally the (3) financial projections: How much is it going to cost to operate, how much will you need to start up, how much cash (cash flow projection) does the business need to generate in order to stay open on a daily, weekly or monthly basis and how much revenue does the company need to earn in order to generate a profit
The business plan not only helps the owners answer these critical questions, it also allows the owners to LEARN about their business and their industry in a holistic and hands on way.  The task of doing the research and writing the plan, while tedious,  is extremely educational, eye-opening and a bit of a reality check for many existing and aspiring entrepreneurs and business owners.

What if I have someone writing my Business Plan?

In terms of someone writing the plan for you?  I am personally not a fan of it. I surely do recommend that entrepreneurs get people to help them refine the plan and edit the plan and make it ready for public reading, but unless the person is a successful and well experienced entrepreneur, folks should take the initiative and write their own plan. You cannot learn what you need to learn about your business unless you write the plan yourself.  Earlier in my career, I used to write plans. But I quickly realized what a mistake that was. I was often more of an expert in the client’s business than they were and that is just not a recipe for success.

That’s all folks! And we hope to see you in two weeks for more info on Business Licensing…Until then be confident and inspired by Anita Roddick’s quote, CEO of the Body Shop, “There is no scientific answer for success. You can’t define it. You’ve simply got to live it and do it”

Happy Gardening J

Got a Business Dream? Plant it with the following seeds!

Seed #1:Have you ever asked yourself Do I have what it takes to start up a business? Am I going to make it?

A lot of Small Business Entrepreneurs doubt they have what it takes to run a business.

At the Washington, DC Women’s Business Center, we know for sure that running a company means a lot of sacrifice. It can be grueling, lonely and can distract you from your current profession. But owning your business can be the most rewarding experience of your life.  After all, what is better than being your own boss? Hard work and long hours directly benefit you, rather than increasing profits for someone else.

Seed #2: The Itinerary of your Journey

To help you picture what it takes to run a business, the DC WBC offers a class called Vision 2 Action that helps future entrepreneurs out to fulfill their “Voyage of a Lifetime”.

Imagine planning your business as if you were planning a trip.

For example:

Ask yourself what is the first thing you need to know before going on a trip?

What is your destination? (Define your business)

What is your mode of transportation? (Execute your goals)

What is your time frame? (Design your business, exit strategy and potential future growth)

What are the activities? (Specify goals)

What is the budget? (Understand and secure financing)

 Seed #3: Self Evaluation Quiz

Have a seat and take 30 minutes of your time to answer simple questions you should ask yourself prior to even THINKING about running your own business.

(Many thanks to Evelyn Bandoh, CEO of  EAB Creative Planning Services, LLC and consultant for the DC WBC Business Plan Lab for the "Self Evaluation Quiz.)

-What is your vision?

-Are you passionate about what you do?

-What are your unique gifts, talents and skills sets?

-What is the state of your personal financial affairs?

(Cash/ collateral/ credit/ competency)

-Who is your support and advisors network?

-How will your business idea create value?

Seed #4: Business Quiz

-What is the most important quality for entrepreneurs to have?

(1-desire to make money 2-Being a risk taker 3-Being well- organized 4-Willingness to take the initiative)

-Are you good at both short range and long term planning?

(1-Always 2- Mostly 3- Sometimes 4-Never)

-Do you like to take risks?

(1-Always 2- Mostly 3- Sometimes 4-Never)

-Do you expect your total household income to rise within on year of starting a business?

 (1- Yes 2- No)

Are you good at following through on your ideas/plans /projects?

(1- Yes 2- No)

Do you have strong people skills?

(1-   Yes 2- No)

 Rendez-vous next week for the answers to the Business quiz.

Gardener Tips:

Q&A

-I have an idea for my business but I am not sure how feasible it is.

What should I do?

 Nicole Eickhoff, DC WBC Business Development Specialist:

”There are many ways to start a business.  If you have an idea, but you aren't sure if it's a viable one, the first step is to do a bit of market research.  Market research looks different for every business because each industry has it's own caveats.  For example, if you are trying to sell fine art, you can get appraisals for it's worth, but you should also be looking at your target client and what he/she is currently paying for fine art similar to yours.  If you are a consultant, find out how many other consultants are in your industry.”

I have a business plan, but I am not sure if I have enough financial resources. What should I do?

Once you have a solid business plan, you will have a very clear idea of how much capital you will need to start your business.  There are many options available to you based on your needs.

If you need a microloan, the DCWBC partners with the National Community Reinvestment Coalition’s CD Fund to help businesses who need less than a 50, 000 dollar loan.  We also work closely with other financial institutions that can provide SBA loans.

If you need help on any aspect of your financial planning for your business, we can do an assessment of your business to help point you in the right direction.

It’s always important to form relationships with bankers, attorneys, and accountants who can help you along the way.  Even if you do not need his or her services right now, knowing to whom you can turn will prove beneficial in the future.

-I have heard that every business needs a business plan.  Is that true? 

Yes.  Absolutely.  A business plan is the map that guides you to where you want to go.  That said, YOU are the one who determines the destination of your journey, so you don’t have to globalize your plan.  In fact, a really good business plan should be specialized to your vision.  This way, your “map” will only take you on the roads you draw and keep you focused.

A business plan differs from a map in one way: it is a living document.  It may not serve you well to use the same business model you were using 10 years ago because the geography has changed.  Stay aware of trends and orient yourself to where you are in any given moment. 

 Thanks to our budding entrepreneurs for encouraging this blog. We will see you in two weeks for more planting!  Until then meditate on what Mary Kay Ash, famous woman entrepreneur and founder of Mary Kay cosmetics, Inc once said, “You can have anything in this world you want, if you want it badly enough and you're willing to pay the price."

 Happy Gardening J