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Are contractors required to be licensed in Idaho?

In 2005, the Idaho Legislature passed the Idaho Contractor Registration Act, which requires contractors, remodelers and any business that charges $2,000 or more to a customer for work that improves, changes or demolishes property to be registered. The Act requires registration, not licensure. Registration is with the Idaho Division of Occupational and Professional Licenses. Any business that improves, changes, modifys or demolishes real property needs to register.

Where can I get money for my business?

The answer to this question will vary depending on whether you are starting a business or are already in business and on the following:

  • the amount of money needed
  • length of time in business
  • geographic location
  • personal credit rating and financial net worth
  • business credit rating, if an existing business
  • management ability
  • ability to provide collateral and repay the debt
  • viability of the business idea
  • type of financing needed (debt or equity)

Committing your own funds is often the first financing step for a start-up. It is certainly the best indicator of how serious you are about your business. Risking your own money gives confidence for others to invest in your business.

Next, approach family and friends - those who know you best and want to see you succeed. Show them the benefits available by investing in your business. Let them have an equity stake in your business, become a partner, or if they prefer to lend you the money, write up a contract and pay back the loan with interest, as if you were working with a bank.

The next obvious source is a bank, particularly for an established business. Developing a relationship with a bank and a banker before approaching them for a loan is key. They will help you determine which type of loan is best for you.

Other loan sources include commercial finance companies, venture capital firms (only available to rapidly growing tech companies), angel financing (private investors of a few thousand dollars up to $5 million who are interested in rapidly growing companies), local development companies, and life insurance companies. For information about financing options, see the website.

Trade credit, selling stock, seller financing, use of supplier/vendor financing (have a supplier extend 120 day terms instead of the usual thirty while you extend only 30-day terms to your customer), end-user funding (having the ultimate customer finance the research and development of the product), and equipment leasing offer alternatives to borrowing. Leasing, for example, can be an advantage because it does not tie up your cash.

Consider which options are right for you and then work with your banker or an Idaho SBDC consultant to determine the option that is best for you.

How can I obtain a loan?

Securing a business loan can be a daunting process, particularly in this economy. The best way to enhance your "asking" position is to do your homework. Before approaching a lender, get a copy of both your personal and business credit reports and make sure they are accurate. If anything is amiss, correct it with the reporting agency. If there are blemishes (late or missed payments, defaults, etc.) - prepare explanations.

Prepare a detailed written business plan with credible financial and market data. If you are already established in business, be prepared to provide two to three years of financial statements and tax documents. Understand that if you have a poor credit record (personal or business) or cannot demonstrate a personal investment in the business and the ability to repay a loan, you will not be considered a good risk. Instead of applying for a loan now, you may need to work at maintaining good personal and business credit (timely, consistent payment of debt) for at least two years and then reapply.

Your banker will know of several types of loans. One of the most common for small businesses is an SBA loan. The Small Business Administration does not make direct loans to businesses; rather, they guarantee loans. To get an SBA loan, a business owner must first contact a commercial loan officer at a bank. All SBA loan programs, even those for women, veterans, and the handicapped, require the business owner to start with a bank.

The bank evaluates the needs of the business, determines whether the potential borrower is eligible for a loan, helps the borrower fill out application forms, and determines which of the many loan programs is most appropriate for the situation. If the loan needs a guarantee in order to be more attractive to the lender, the package is forwarded to the SBA.

The role of the SBA is limited to guaranteeing some portion of the loan made by the bank to the borrower. This guarantee lowers the risk to the bank, but it doesn't affect the amount of the loan.

Most banks in Idaho are SBA-approved lenders. However, some are more active in making small business loans than others. Start with your own bank to find out if they make small business loans. If not, contact a state or community bank. They are generally more interested in helping small businesses than the large national banks.

If I'm thinking of starting a business, what should I do first?

Before you quit your job or print business cards, it is wise to take stock of personal considerations. Ask yourself:

  • Do I have what it takes to be an entrepreneur?
  • Am I a risk-taker?
  • Do I have a grasp of basic financial and marketing principles?
  • Am I resourceful and organized?
  • Can I support myself and/or my family financially during the early stages of the venture when cash may be short?
  • Am I willing to work 18 hours a day 7 days a week if that is what it takes?
  • Will my family and friends be supportive during the start-up process?
  • Am I knowledgeable and experienced enough in my chosen field?

If the answer to any of these questions is "no," you may want to focus on addressing the issues before proceeding. If most of your answers are 'yes,' then it is time to lay the groundwork. Get as much information as you can on the feasibility of your idea and on the real experience of starting and managing any business. You can do this by:

  • accessing business publications and data from your local library
  • taking seminars and workshops
  • speaking with or reading the websites of trade or professional groups that represent your chosen industry
  • consulting with people who are already in the same or similar line of business (avoid those who may perceive you as a potential competitor)
  • seeking advice from professional counselors like those at the Idaho SBDC or your local SCORE office

Also, take the time to read through the information on the website, then contact your nearest SCORE Chapter or Idaho SBDC office to arrange for a free consulting session.

What kind of registration and licenses are required to start a business?

Our companion website,, which was created by over 20 Idaho state agencies,  makes it easy for business owners to get a grip on the multitude of regulations, taxes, and licenses affecting business operations in Idaho. The site takes the guesswork out of which agency to contact for what. The heart of the site is the Business Wizard. It asks a few questions about your business and then develops a customized checklist of agencies to contact. The checklist includes phone numbers and links to forms and websites.

If you have been in business for awhile and you know what agency has the information you are seeking, just browse through the topic buttons on the home page. Links to downloadable forms and other information are at your fingertips.

Should I have a web page?

Many business owners assume they need a website, but not all businesses need one, depending on your particular situation. There are four general reasons to have a website:

  • to sell products and services
  • to provide information
  • to increase visibility
  • to provide additional customer service

First, decide if any of these reasons make sense for your business. To sell products and services on the Internet, success involves:

  • having a great product or service
  • attracting a targeted market
  • selling and satisfying your customers

E-Commerce (selling through a website) is a six step process; all online businesses will go through the first three steps:

  1. Create the online content.
  2. Host the content on the Internet.
  3. Market the website and content.

Businesses conducting online sales will need to complete three additional steps:

  1. Collect and record customer orders
  2. Process payments
  3. Fill and ship customer orders

Before committing valuable cash and precious time pursuing the development of a website, you may want to meet with an SBDC consultant to determine whether your business would benefit from having a website.

What does marketing involve?

Marketing is one of the most important aspects of your business. Without marketing, potential clients can't find you. Marketing consists of four elements, often called the "four P's":

  • Product - the item or service you sell
  • Price - the amount you charge for your product or service
  • Promotion - the ways you inform your potential clients about who, what and where you are
  • Provision - the channels you use to get your product or service to the customer

Marketing encompasses much more than just advertising or selling. A major part of marketing involves researching your customers:

  • Who are they?
  • Where are they located?
  • How do you reach them?
  • What do they want? (Great product? Great customer service? Follow-up support?)
  • What can they afford?
  • What do they think?

Your understanding and application of the answers to such questions plays a major role in the success or failure of your business.

For assistance in creating a marketing plan for your business, contact your nearest SBDC or SCORE office.

What is my market potential?

The principles of determining market share and market potential are the same for all businesses. First determine a customer profile (who), your anticipated market area (where) and the geographic size of the market (how many). This is the general market potential. Knowing the number and strength of your competitors (and then estimating the share of business you will take from them) will give you the market potential specific to your enterprise.

How can I find and keep qualified employees?

Two of the greatest challenges for any business are hiring the right people and keeping them. Employees, and more importantly their contributions, are a business's most important asset. So how do you go about finding, selecting and retaining the best people?

Decide What You Want

Before beginning your hiring efforts, know what you want. One way is to list the skills, experience, and other attributes you are looking for in the following categories:

  • must have - skills you do not have the time, money or desire to teach but which are absolutely necessary to the job, such as education, occupational license and experience
  • should have - sets of skills in which the candidate should have some degree of knowledge or skill
  • nice to have - what you'd love to have but can live without

Search in the Right Places

The harder it is for you to find the skills you need, the wider the net you must cast. You may choose from local media, the state's employment center (ID Department of Labor offices), and the Internet. View any employment ad as a marketing tool for your company, making it as appealing as possible. Put a headline on your ad that describes the absolutely best benefit you can offer. Be sure to add your must-have list of skills, experience, and education. To get qualified people without having to weed through a pile of applications, be specific about what you say and very selective about where you place the ad.

Don't underestimate the value of networking. You may choose to ask your best employees if they know someone who would fit well in your organization or use your network in the community to find employees.

Conduct a Thorough Interview

Give the applicant a complete and accurate picture of your business. In today's market, you have to sell both yourself and your company. Through your questions, cover the job's must-haves, should-haves, and nice-to-haves and be sure to obtain a clear picture of where the candidate is in relation to these attributes. Remember, good questions lead to good answers - the more you learn about each applicant's experience and skills, the better prepared you are to make your decision. If you find yourself talking as much or more than the candidate, stop - you only learn about the candidate when you are listening. Don't be afraid to press a candidate for more information - it is then that you may learn important information.

Hire the Right Person

Some tips for choosing who to hire include:

  • Go with your gut instinct
  • Accomplishments are what really matter
  • Attitude counts
  • Be objective

The three critical elements in hiring the right person for the job are skills match, company fit, and job match. Be objective in determining which candidates have the best overall fit. In terms of wages, try to be a leader in your market - think about the cost of paying a little more versus the cost of turnover (roughly 25% of salary and benefits).

Hold on to Good Employees

Employee retention is as important as the initial hire. An individual's suitability to a particular job is the single most important factor in job performance and retention. Be sure to provide jobs that fit with the employee's personality and then take the time for a proper orientation. Listen to them and continue to provide training and skills development opportunities. Set clear expectations, show concern for employees, and treat them fairly. Some other low or no-cost employee retention tips include:

  • Use an open management style that gives employees a sense of ownership and more control over their destiny.
  • After completion of a tough project, give team members some time off or reward them in some other way.
  • Be as flexible as possible with work hours, dress, work rules, telecommuting.
  • Try to make the work challenging or allow individuals to make an immediate difference in some way.
  • Have fun. Throw a pizza party for no particular reason; give away family tickets to an amusement park.
  • Assign coaches or mentors to help employees not only with specific jobs, but also in developing their careers.
  • Consider offering an equity stake in the company to key hires.
  • Make sure your managers and supervisors have the necessary skills to hire and keep good people.

Your business's reputation is a key element in retaining employees and attracting new ones. Make sure you know how your business is perceived in the community and do whatever it takes to make that perception a positive one.

Does the Idaho SBDC charge for its services?

The counseling,  management and technical assistance services offered by Idaho SBDC counselors and staff are provided at no charge to the client. Charges may be made to recover client-approved direct costs for items such as printing, postage, data retrieval, etc., related to special projects. Nominal fees are generally charged for training seminars and special events.

How can I protect my customers' and employees' data from theft?

Identity theft, Internet fraud, and security breaches are increasingly common in today's business world. To help your small business manage security and privacy challenges, the Better Business Bureau (BBB) has partnered with nationally-recognized security and privacy experts to create a new toolkit called Cybersecurity Resources to Help Businesses and Consumers. The objective is to demystify the complexities of data security and provide small businesses with a non-technical road map to securing their customer and employee data.

The Idaho SBDC offers a Cyber Security Packet that you may find helpful.

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