Stanford Federal Credit Union’s

Guide to Starting
a Business

Must-Know Information and

Tips Before You Get Going!
Contents
Creating a Business Plan....................................................................4

Location, Location, Location................................................................ 4

To Rent or Buy? That is the Question..................................................... 5

Utilizing Your Local Chamber of Commerce....................................... 6

Naming Your Business........................................................................ 6

Registering a DBA (Fictitious Business Name Statement)................... 7

Choosing a Business Structure........................................................... 8

Setting up Tax Accounts..................................................................... 8

Business Licenses and Permits.......................................................... 9

Financing............................................................................................. 10

Setting Up the Business Financial Accounts..................................... 10

Marketing Your Business.................................................................. 11

One Final Thing to Consider................................................................ 12

Sources & Resources.......................................................................... 13

So you want to start a business? That’s fantastic! But as you’ve
probably realized, starting a business takes more than just a
great idea.
Take a look at two of the Bay Area’s most successful companies:
Apple and Google. How do two of the biggest companies on
Earth relate to your small business, you might be thinking? Every
company, no matter how big or small, starts with an idea but is
cultivated by passion, crystal clear focus, and an understanding
of what your customers want and need. Where would Apple be
without Steve Jobs’ hunger and drive? And Google without the
focus and ingenuity of then Stanford students, Larry Page and
Sergey Brin?
This eBook serves as a guide to help you get started—from
creating a plan to securing financing, marketing on a budget,
and everything in between—including the exciting (choosing a
name for your business) and the not so exciting (tax, permit, and
licensing requirements.) Best wishes to you as you embark on
your exciting entrepreneurial journey!

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Creating a Business Plan
A business plan is a written document that outlines the future of
your business. It starts with day one (expertise, goals) and ends
3-5 years down the line, at which point your business is expected
to have greater resources and profitability. The business plan is
essentially a map that shows how you plan on getting from here
(the present) to there (the future).
Sure, a business plan really comes in handy when you’re trying
to secure financing, but that is not its only purpose. It also takes
into account projected growth, return on investment, and your
target market.
As one of the greatest innovators of our time, Walt Disney, said,
“You can design and create and build the most wonderful place
in the world. But it takes people to make the dream a reality.”
No matter what business you’re in, you will benefit greatly from
studying your competition—analyzing both their successes and
their failures. The internet and the emergence of social media has
made this easy. What do people like? Dislike? More importantly,
what do they desire? Many times you’ll find this is when the magic
happens. When analyzing what’s working and not working for your
competition, new or modified ideas suddenly materialize.

Location, Location, Location

If you’re planning an internet-only business, the only locations you
need to worry about are the best online venues to sell your goods.
The three largest non-self-hosted are Ebay, Etsy, and Amazon
Marketplace. However, if you plan on having an actual storefront,
there are some important things you need to consider:
• Do your ideal customers live nearby?
• Are the lease terms suitable to your needs? Are the rents reasonable
for the area?
• Do the size and shape of the space meet your layout requirements?
• Will the space be able to accommodate future growth?
• Is there an adequate amount of parking nearby?
• Are neighboring businesses likely to bring more traffic to your store?

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Take a look at the demographic overview of the area you’re
scoping out. What retailers, office parks, schools, and restaurants
draw people to the area? Do you notice how competing
businesses are often in close proximity to one another? There’s
a reason for that. Competition makes business thrive. Don’t be
afraid to set up shop near your competitors. It is likely they did the
necessary research before settling down and invested time and
money in advertising. This may pay off big time for your business
in terms of increased foot traffic—especially important when
you’re first starting out. From there on out, you’re likely to prosper
from word of mouth and a solid marketing strategy.

To Rent or Buy? That is the Question

The decision to rent or buy commercial property greatly depends
on your future projection of business and your current financial
status. If buying a space is going to completely drain all of your
capital, you are probably better off renting. Renting may also be
the best way to go if you believe you may outgrow your current
space within a few years.
However, now is a really great time to buy, and rates are at
historical lows. So, if you’re willing to commit to a space for at
least ten years, you should definitely consider buying.

Advantages of buying commercial property:

• You avoid fluctuating rents, especially in unpredictable markets
• Owning commercial property is an investment, which will likely
increase in value
• You’ll have a greater sense of security—free of concerns that your
landlord might discontinue renting the space
• Owning a space will make your business more attractive to potential
buyers should you decide to sell it sometime down the road

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Utilizing Your Local Chamber of Commerce
Involvement in your local Chamber of Commerce can do wonders
for your business’ reputation. It shows your customers that you
genuinely care about them and you’re actively involved in the
community.
Even if you are not a member, you can still join their e-mail list or
follow them on social media sites to tap into their newsletters and
upcoming events. You may discover great ways to network your
new business.

Naming Your Business

Most budding entrepreneurs put a great deal of time and effort
into coming up with the perfect name for their new business—as
they should. It is one of the most important decisions you will
make as a new business owner. While a bad name may not
completely ruin your chances of success, it can have a significant
impact on how people convey your business.
Would you want to get your hair cut at Blood, Sweat, & Shears?
(Yes, it truly exists).
How likely are you to run to Boring Business Systems for your
equipment and software needs? (Admittedly, there is a bit of
humor in this one. “Meet Our Boring Team,” “Check Out Our
Boring Newsletter.”)
Ideally, your name should convey the value and uniqueness of the
product or service you’re selling, while also forming a connection
with your customer.
Once you’ve got it narrowed down to a few potential candidates,
you might find it helpful to test them out with a focus group. Also
consider how your name will fit into a logo. How does it sound
when read out loud? And most importantly, is the web domain
available? You can check that out at BetterWhois.com or any
domain provider—GoDaddy and NameCheap to name a few.

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There are also tons of name-generating websites like Naming.net
and Dotomator.com that generate names at random or suggested
names based on user-entered keywords and type of business.
As part of your research, you’ll also want to make sure the name
you decide on isn’t already trademarked by someone else. If not,
you may decide to trademark it yourself. It will come at a cost, but
at least it will protect your business name against infringers.

Registering a DBA (Fictitious Business Name

Statement)
A DBA (“Doing Business As”), also known as a “Fictitious
Business Name,” is needed if:
• You’re a sole proprietor or part of a general partnership operating
under a name other than your own. [Ex: If your name is John Smith
and your business name is John Smith Taxidermy, you will not have to
file a DBA].
• You’re an existing corporation or LLC doing business under a name
other than your business’ legal name.
Check with your county on how to register for a Fictitious
Business Name:
Santa Clara County
San Mateo County

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Choosing a Business Structure
There are four main business structures to choose from—each
with different legal and tax consequences. Your business goals
will be the greatest determining factor in deciding the structure
that best suits your business.

Sole Partnership Limited Liability Corporation

Proprietorship Company (LLC)

Pros The simplest and More perspectives and Can be formed by With numerous
least expensive levels of experience. one person owners/stockholders,
structure—with Also, greater oppor- startup and operating
Members of the LLC
the least amount tunities for garnering capital is much easier
are not personally
of government capital to acquire
liable for debts (or
regulation
Each partner reports other liabilities) Since corporations
his or her share of incurred by the operate separately
profits/write-offs on business from their owners,
personal income tax ownership can be
return, rather than transferred easily
filing taxes as a busi-
ness entity

Cons Sole proprietor’s Like the sole Requires a lot more Subject to double
personal assets proprietorship, paperwork/costs taxation: first as
are accountable partnerships offer to construct and corporate income, then
for any debts or no personal asset operate than a sole as personal income for
other liabilities protection. Creditors proprietorship or each individual
incurred by the can come after both partnership stockholder
business partners’ assets to
cover business debt

How Do I Set Up a Corporation or LLC?

You can go directly to the state secretary website for the state
you wish to set up your business in order to set up a corporation
or LLC. In addition, you can also use online services such as
legalzoom.com or rocketlawyer.com to set up the entity.
Please seek the advise of an attorney and/or a CPA to determine
which type of entity would be best for your business.

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Setting up Tax Accounts
You will need an EIN (Employer Identification Number) if you
answer “Yes” to the following questions: (from IRS.gov)
• Do you have employees?
• Do you operate your business as a corporation or a partnership?
• 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?
-- Trusts (other than grantor-owned revocable trusts)
-- Estates
-- Real estate mortgage investment conduits
-- Non-profit organizations
-- Farmers’ cooperatives
-- Plan administrators

If your company has employees, you must register with the

California Employment Development Department (EDD) for state
income tax withholding and employment taxes. You must register
within 15 calendar days after paying wages exceeding $100.
You can register or monitor your accounts online at EDD’s
e-Services for Business.
In the state of California, employers are required to withhold
or pay:
• Income Tax
• State Disability Insurance
• State Unemployment Insurance
• Employment Training Tax

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Business Licenses and Permits
In California, you are required to obtain a business license—
regardless of the business type— from the city you are
operating in.
Other licenses and permits required, both state and federal, will
vary by business type. The U.S Small Business Administration
provides an easy tool to figure out which licenses and permits
apply to your business—based on your zip code and industry.
SBA Permit Me Tool
If you’re selling tangible goods, you will also need a seller’s permit
from the State Board of Equalization.

Opening a business banking account:

In order to open a business banking account, you will be required
to provide some or all of the following depending on the type of
entity:
• Fictitious Name Statements or Business License
• EIN Number
• Copy of Stamped Organization papers (Stamped by the Secretary
of State)
• Operating Agreement and/or bylaws

Financing
And now, the $64,000 question: How are you going to finance
that awesome business plan? Unless you have adequate personal
assets to cover the upfront/operating costs of your business,
you’re going to need to get capital from somewhere. For many
business owners, “somewhere” can be from four or five different
sources. Here are the top four.

Grants
Getting a grant is naturally the ideal source of business financing.
Unfortunately, they are not always the easiest to obtain and not all
businesses qualify.
Grants.gov allows you to search over 1,000 programs that
distribute billions in grants each year.

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Tech Grants
Grants are available to small tech firms through the Small
Business Innovation Research program and the Small Business
Technology transfer program. Check out SBIR.gov to see if your
company qualifies.

Venture Capitalist and Angel Investors

Venture Capital Firms and “Angel Investors” provide unsecured
financing to young companies with high growth potential. These
investors often have an active role in helping new companies
realize a rapid return on investment. In order to obtain venture
capital, you’ll have to have a clear business model and an
impressive pitch.

Friends and Family

Friends and family can be great sources of financing for obvious
reasons—they know and (hopefully!) trust you, so you won’t have
to jump through hoops to prove your integrity. Of course, adding
money into the mix can make things very complicated, so you
should not enter into this situation without first having a plan (loan
amount, interest, repayment schedule). Signing a promissory note
will give your friendly lenders added peace of mind that the money
is, in legal terms, a loan and not a gift.

For Established Businesses:

Credit Unions
The credit union should be at the top of your list when it comes
time to securing financing for your business. Because it is a
member-owned cooperative, the profits are turned over to its
members in the form of higher deposit returns and significantly
lower loan rates. In addition to the great rates, credit unions also
offer much greater flexibility than the big banks and are subjected
to less regulation. Small businesses, in particular, will benefit from
the credit union’s less rigid requirements that perhaps froze them
out from big bank funding.
Apply for a business loan at Stanford Federal Credit Union

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Setting Up the Business Financial Accounts
Determine your business banking needs and choose the account
that best suits them. Hiring a part-time bookkeeper and/or utilizing
easy-to-use accounting software may prove to be invaluable in
keeping your finances and record keeping organized.
Compare Business Checking Plans at Stanford Federal Credit Union

Marketing your business

An effective marketing plan is crucial to the success of your
business! Even if you have the most beautiful storefront in town,
you can’t rely on foot traffic alone. A good marketing strategy is
just as important for an online-only business. People need to find
you. Your goal is to make it so they don’t have to look so hard.
You can spring for fancy ads and radio time, and it certainly will
help your efforts, but there are plenty of ways you can market your
business on a tight budget:
• Get your business listed on Google
• Actively participate in social media sites that pertain to your business
• Build a Facebook and Twitter page to engage people who are
interested in your product/service and build loyal fans
• Get a dot-com! You can attain one for as low as $12.99 annually from
GoDaddy.com
• Build a website. WordPress offers free and low-cost templates that are
incredibly user-friendly
• Use Pinterest to promote your products
• Start a blog that’s relevant to your industry. A blog will not only
engage current customers; it will attract and give you insight into
new customers. It will also give your company a voice and you more
credibility as an industry expert
• Always keep your business cards on hand. You never know when you
might need them!

One final thing to consider

Consider hiring a qualified business attorney to ensure your
business is compliant with state and federal laws and to
assist with your business organization, contracts, real estate
transactions, and protection of your intellectual property.

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Sources & Resources
The following sources were invaluable to the writing of this eBook:
Entrepreneur.com
U.S Small Business Administration
The Real Value of Joining a Local Chamber of Commerce
IRS.gov

Useful Links
Stanford Federal Credit Union Business Loans
Stanford Federal Credit Union Business Checking Plans
California State Board of Equalization
BetterWhoIs.com: Domain search
CA Employment Development Department
Grants.gov
SBIR.gov
Naming.net
Dot-o-mator Name Generator

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Stanford Federal Credit Union’s
Guide to Starting a Business
Must-Know Information and Tips Before You Get Going!
By Stanford Federal Credit Union
In 1959, a group of Stanford employees created the Stanford Federal Credit Union to serve their banking
needs. Today, we’ve grown to nearly, 50,000 members and over $1.4 billion in assets, and the quality of our
expansive line of financial products and services is unmatched in the industry. We serve the faculty, staff,
students, alumni, and volunteers of Stanford University (naturally), Stanford Hospital & Clinics, Lucile Packard
Children’s Hospital, and SLAC National Accelerator Laboratory…but we also serve over a 100 local
companies and their employees, including Google, Genentech, Facebook, SAP and VMware. That’s a lot
of companies, true, but we’ve still got room for you!
To top it off, Stanford FCU was the first financial institution to offer online banking, and it continues to
be committed to offering innovative technology to its members. The credit union is also focused on enhancing
financial lives through education and counseling. Our truly visionary leadership continues to be provided
by our member-elected Board of Directors, who selflessly serves without pay to help oversee the credit
union’s operations.

Contact Us:
(650) 723-2509, (888) 723-2328 or info@sfcu.org

Your Starting a Business Expert

at Stanford Federal Credit Union
Charles Yun, VP Commercial Banking
Charles Yun is responsible for the Commercial Banking Division
of Stanford Federal Credit Union. He has over 17 years of com-
mercial banking experience in various disciplines which include:
Commercial and Industrial Loans, Structured Lines of Credit,
Commercial Real Estate, S.B.A., Technology Lending, Foreign
transactions, and Mergers & Acquisitions. He’s in charge of
growing the division through loans, deposits, and product lines
while maintaining the highest credit standards in the industry.
Charles received his B.S. in Finance from San Jose State Univer-
sity and his M.B.A. from Pepperdine University.

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Stanford Federal Credit Union’s
Guide to Starting a Business
Must-Know Information and Tips Before You Get Going!
See how Stanford Federal Credit Union can help you with your personal banking.

www.sfcu.org

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