The City of Galva believes that there are two constituent elements necessary for the creation of wealth: Capital and Entrepreneurship. Moreover, we understand that government has a penchant for erecting barriers to entry, limiting the flow of capital, impeding growth and hindering business continuity.
As government tightens the proverbial noose around the neck of free enterprise, it must (if it wishes to sustain itself), invent ever more elaborate schemes for enabling the system it is inexplicably stifling.
Hence, this section of our website is devoted to acquainting those in the process of undertaking, sustaining or expanding an enterprise to incentives, ideas and information calculated to "loosen the noose".
Founded in 1854, the City of Galva is a small but storied municipal corporation that lies midway between Peoria and the Quad Cities. Like many small cities founded before the turn of the last century, Galva was established as a railroad town on what was originally the Military Tract line, later called the Chicago, Burlington & Quincy (C.B. & Q.).
The founders, William and James Wiley, were astute enough to recognize that locating along a major avenue of commerce was essential to the prosperity and ultimate survival of their new venture.
Today, the Wiley's business acumen is just as important to the continued existence of Galva as it was in the 1850s.
As the importance of the railroad faded with the appearance of interstate highways, and large airports contributed to the conurbation of America, Galva struggled to live up to its motto: "The City of Go."
Without the dedication of its proud and determined Scandinavian and European populace, Galva was destined to become another casualty of progress.
Fortunately, the City has weathered the economic storm long enough to see the re-emergence of the railroad as a preeminent mode of transportation (Bureau of Transportation Statistics) and wisely takes advantage of its position along the Burlington Northern Main Line, its position along US Route 34, its access to two major interstates and its proximation to two international airports.
Election cycle after election cycle, the citizens of Galva continue to elect pro-business mayors and aldermen. As a result, the City has, over the past decade, welcomed within its corporate limits the branch office of a national wind energy corporation, a foundry, an assisted living center, an inland grain terminal (now the home of a 100 million gallon per year Ethanol plan), a new banking center, a hotel, a regional recycling operation, an additional clinic, a health care management facility, a large equipment repair facility, a powder coating operation and a new banking center to name a few.
Working with our regional partners and economic development associations, the City has facilitated the location of several wind farms in Henry County, thereby taking advantage, once again, of local assets (in this case a natural resource called wind) for an investment in the County of nearly $1 billion U.S.
The BNSF loads Ethanol at the Big River Resources facility in Galva, IL
The City of Galva boasts four distinct seasons. The summer months can produce highs in the upper 80's to lower 90's (on average), while the winter months can be quite cold (with lows in the teens and highs in the thirties).
Fall is particularly pleasant in Galva, with average temperatures in the low thirties on the bottom and in the mid-fifties on the top end.
Spring brings average temperatures in the mid fifties to low seventies.
Average Maximum Temperature: 59 degrees Fahrenheit
Average Minimum Temperature: 38 degrees Fahrenheit
Average Rainfall: 35 inches per year
Average Snowfall: 27 inches per year
Eagle Enterprises Recycling Center in Galva, IL
The City of Galva's COLI is less than both the average national and average Illinois indexes by approximately 19 and 18 points respectively.
Overall, Galva stands at less than 82, which compares favorably with the average Illinois index score of 99 and the national average of 100.
Branchfield Casting's foundry building in Galva, IL
Major transportation routes...
US Route 34 0.0 Miles BNSF Main Line 0.0 Miles Interstate 74 (East to Peoria & Beyond) 23 Miles Interstate 74 (West to Quad Cities) 16 Miles Interstate 80 (East and West) 17 Miles
Peoria, IL 50 Miles Quad Cities 48 Miles Galesburg, IL 28 Miles Chicago, IL 160 Miles St. Louis, MO 221 Miles
Peoria International 50 Miles Quad City International 45 Miles Chicago O'Hare 164 Miles Chicago Midway 155 Miles Kewanee Municipal 7 Miles
Colleges & Universities...
Black Hawk Community College, Galva 6 Miles Carl Sandburg College, Galesburg 23 Miles Knox College, Galesburg 23 Miles Augustana College, Rock Island 35 Miles Monmouth College 35 Miles Black Hawk Community College, Moline 45 Miles Bradley University, Peoria 50 Miles Western Illinois University, Macomb 59 Miles Eureka College, Eureka 66 Miles Illinois Wesleyan University, Bloomington 72 Miles Illinois State University, Normal 88 Miles University of Illinois, Springfield 102 Miles Northern Illinois University, DeKalb 116 Miles University of Illinois, Urbana 120 Miles
all-feed processing and packaging facility in Galva
The City of Galva participates in the Quad City Region Labor shed study area.
A detailed analysis of the availability and characteristics of workers within our region is maintained and updated by Iowa Workforce Development and the Quad City Development Group (now called "Quad Cities First") with assistance from the Bi-State Regional Commission.
For purposes of the study, Galva falls within "Zone 3."
The City of Galva's current property tax rate is 2.7490 per $100.00 of equalized assessed value.
The City sales tax rate is equivalent to the state rate of 6.25%.
The City does not impose the following taxes:
- Non-home Rule Municipal Sales Tax (Additional Sales Tax)
- Simplified Municipal Telecommunications Tax (Telecom Tax)
- Utility Tax
- Business District Tax
- Additional Motor Fuel Tax
- Additional alcoholic beverage tax
Kewanee Municipal Airport
3761 Midland Road
Kewanee, IL 61443
(309) 853 - 8671
20028 E 1650th Street
Geneseo, IL 61254
(309) 944 - 8128
6100 W. Everett McKinley Dirksen Parkway
Peoria, IL 61607
(309) 697 - 8272
2200 69th Avenue
Moline, IL 61265
(309) 764 - 9621
Loomis & North Tremont Streets
Kewanee, IL 61443
1 - 800 - 872 - 7245
Galva's north treatment plant in winter conditions
Water & Sewer Service
The City of Galva provides water and sewer service to residential and business customers.
Currently, the City of Galva has an excess capacity of 400,000 gallons per day (gpd)
Current excess capacity in our sewage treatment plants is as follows:
North Sewage Treatment Plant:
Excess flow capacity of 30,000 gallons per day (gpd)
Excess organic treatment capacity of 3,000 PE (population equivalency)
South Sewage Treatment Plant:
Excess flow capacity of 200,000 gallons per day (gpd)
Excess organic treatment capacity of 2,000 PE (population equivalency)
or on the Web at:
or on the Web at:
or on the Web at:
Gas & Electric Service
or on the Web at:
Steps to Starting A Business
The Illinois Entrepreneurship Network Business Information Center of Illinois (the Center) was created by the Department of Commerce and Economic Opportunity (DCEO) to assist startup and existing businesses with:
- regulatory compliance
- informational resources
Much of the information found in this section of our Website can be found on the DCEO Website. Wherever possible, however, this Section will provide specifics where the DCEO Website generalizes.
Feasibility Analysis and Checklist...
A feasibility analysis is an important first step and should be completed before you invest too much time and effort into starting a business that you may find later had no chance of succeeding.
You can view the checklist here, or if you prefer, you can download the checklist from the DCEO Website.
Answering the questions posed in the checklist will give you a better idea of whether or not your new or existing business opportunity is worth pursuing.
Additionally, certain question are designed to help you figure out if you truly have what it takes to become a business owner.
The Business Plan
After you have completed a feasibility study and self-assessment, conventional wisdom suggests that the second step is a business plan.
For a different perspective, see Julian Lange's study of 117 new ventures to get Babson College's take on whether or not a business plan is absolutely necessary in the "real world" (hint: it is if you will be seeking startup capital from angels, venture capitalists and most banks).
You can find a lot of additional information on the World Wide Web about business plans; from how to write one to software products designed to assist you in the process (just type "business plan" in your search engine of choice). These products range from free to quite expensive.
The SBA offers a few free online courses that can assist you in starting and growing a business. One of the free courses they offer is entitled "How to Prepare a Business Plan."
If you would like to know which section of a business plan is hardest to complete, type "hardest section of a business plan" into your search engine of choice. The answer will be the marketing section (what some refer to as "market analysis" and "marketing strategy").
The bottom line: no matter how terrific your product or service, if you cannot sell it for a profit your business venture will not succeed.
Scroll down to the "What ownership structure choices do I have?" section of the DCEO Website to compare the several types of recognized business organizations in the Sate.
Keep in mind that information is subject to change, and that you may need the assistance of an attorney.
If you are unfamiliar with the seven types of organization, scroll down for a brief description followed by advantages (Pros) and disadvantages (Cons) of each.
A sole proprietorship is a business which is owned and operated by an individual. The advantages of this form of organization include ease of formation and relative freedom from government controls and restrictions. Disadvantages include less access to capital and financial resources. Also, this form of business organization provides less protection with regard to personal liability (if the owner's company should get into a position of owing more to others than the amount of cash and other assets it has, the owner's personal assets -- home, car, etc. -- may be required to be sold to pay the obligations of the business).
A general partnership is defined as two or more individuals carrying on an association as co-owners of a business for profit. Types of partnerships include general and limited. Before starting the company, the partners should agree on how much owner equity each partner must contribute, the extent to which each partner will work in the company, and the share of the profits or losses to be received by each of them. This agreement should be prepared by an attorney in writing to avoid any future misunderstandings. As with sole proprietorships, a general partnership exposes the owners to personal liability. If the business is not successful and the partnership cannot pay all it owes, the general partners may be required to do so using their personal assets.
Limited Liability Partnership
A Limited Partnership is an organization made up of a GENERAL PARTNER, who manages a project; and limited partners, who invest money, but, have limited liability, are not involved in day-today management, and usually cannot lose more than their capital contribution. Usually, limited partners receive income, capital gains, and tax benefits; the general partner collects fees and a percentage of capital gains and income. Typical limited partnerships are in real estate, oil and gas, and equipment leasing and family partnerships, but they also finance movies, research and development, and other projects. Typically, public limited partnerships are sold through brokerage firms for minimum investments of $5,000.00, whereas private limited partnerships are put together with fewer than 35 limited partners who invest more than $20,000.00 each.
Limited Liability Company
A Limited Liability Company (LLC) is the non-corporate form of doing business that provides its owners with limited liability, flow-through tax treatment and operating flexibility through participation in management of the business. The LLC is well suited for every type of business venture except banking and insurance, which are prohibited by Statute. Examples of acceptable businesses are: farming, agricultural services, mining, construction, manufacturing, transportation, wholesale and retail trade, investment companies, insurance agents, real estate brokers, all types of real estate ventures, hotels, personal and business services, automotive sales and services, amusement and recreation, health services, accounting, architecture and other professions, just to name a few. Many Illinois businesses could obtain personal limited liability protection by restructuring as an LLC with a minimum of one owner.
A corporation is a distinct legal entity and is the most complex form of organization. A corporation may sell shares of stock, which are certificates indicating ownership, to as many people as is desirable. The shareholders then elect a board of directors, which elects a president and other officers who run the company on a day-to-day basis. Among the advantages of corporate formation are limited liability of the shareholder and ease of transferring ownership. Registration as a CORPORATION. If the decision is made to incorporate, Articles of Incorporation must be filed with the Secretary of State indicating the purpose of the enterprise. The corporation will be required to file annual reports with the Secretary of State. If the name of the business will include the word "Corporation," "Inc.," "Incorporated" or "Corp.," you must incorporate.
Electing S Corporation status is an option that must be made through the Internal Revenue Service (IRS) when starting a business. In general, an S Corporation passes through income and expenses to its shareholders, who then report them on their own income tax returns. To qualify for S Corporation status, a corporation must meet several requirements, one of which limits the number of shareholders to 75. All shareholders also must consent to the corporation's choice of S Corporation status.
Registering a Business
Sole Proprietorships and General Partnerships:
The Illinois Assumed Name Act requires the registration of a sole proprietorship or general partnership with the county clerk's office when the name of the business differs from the owner(s) full legal name(s).
You must register your proprietorship or partnership with the Illinois Department of Revenue (ILDOR) by filing a REG-1. You can download a copy of form REG-1 from the ILDOR Website or you may register online at the Illinois Business Gateway.
In addition, the State will require a Schedule REG-1-L Illinois Business Site Location Information form be attached to your REG-1.
Other forms of organization:
The State of Illinois advises that competent counsel be sought before organizing as other than a sole proprietorship or general partnership (should you be unsure about the risks involved in either a sole proprietorship or general partnership, the wise course is also to seek counsel from a competent attorney and/or accountant).
The Illinois Secretary of State's Website maintains a business services section that contains, among other things, up-to-date information, requisite forms and relevant contact information for those wishing to organize as other than a sole proprietorship or general partnership.
In addition, the Illinois Business Gateway Website has up-to-date information on registration requirements, or you may contact one of the offices listed below:
For all forms of organization...
Keep in mind that most businesses are required to be registered with and/or licensed by the Department of Revenue. Use the link to the right (Licensure) for more information about licenses and permits.
Limited Liability Partnership
501 South Second Street
Room 357, Howlett Building
Springfield, IL 62756
(217) 524 - 4952
501 South Second Street
Room 357, Howlett Building
Springfield, IL 62756
(217) 785 - 8960
Or the Chicago Office at:
69 W. Washington
Chicago, IL 60601
(312) 793 - 2872
Limited Liability Company
501 South Second Street
Room 351, Howlett Building
Springfield, IL 62756
(217) 524 - 8008
501 South Second Street
Room 328, Howlett Building
Springfield, IL 62756
(217) 782 - 6961
A common way to start a business in Illinois is to acquire an existing business.
Be aware that the purchaser of the assets of a business is required to file a "Notice of Sale/Purchase of Business Assets" (form CBS-1), and obtain a Bulk Sales Release of Transferee Liability from the Illinois Department of Revenue.
Illinois Department of Revenue
Bulk Sales Section
P. O. Box 641155
Chicago, IL 60664-1155
(312) 814 - 3063
This aspect of business is regulated by the Franchise Disclosure Act which is administered by the Illinois Attorney General.
The Franchise Disclosure Act requires that the franchiser register with the Illinois Attorney General and provide the franchisee complete information regarding their franchisor-franchisee relationship, the details of the contract, the prior business experience of the franchiser and other information relevant to the franchise offered for sale.
A copy of the Act may be obtained from the office of the attorney general: (217) 782 - 4465
Licenses, Registration, Permits and Assistance
Illinois Department of Revenue:
In Illinois, most businesses are required to be registered and/or licensed by the Department of Revenue.
For more information on which form is applicable to your business, please contact the Illinois Department of Revenue at 1-800/732-8866, or by writing or visiting Revenue at:
Illinois Department of Revenue
100 West Randolph
Chicago, IL 60601
Or in Springfield at:
101 West Jefferson Street
P. O. Box 19030
Springfield, IL 62794-9030
The Department of Revenue also licenses and registers certain businesses upon which miscellaneous and excise taxes are levied. These include, but may not be limited to:
- Cigarette and Cigarette Use Tax (distributors);
- Coin-Operated Amusement Device Tax;
- Gas Revenue Tax;
- Hotel Operators' Occupation Tax;
- Liquor Tax;
- Motor Fuel Tax (distributors, suppliers, bulk users and blenders);
- Motor Fuel Use Tax;
- Public Utilities Tax (electric); and,
- Telecommunications Tax.
For more information call the Department of Revenue's Miscellaneous Taxes and Excise Tax Office at (217) 782 - 6045, or visit the ILDOR Tax Information page on the DOR Website.
The Department of Financial and Professional Regulation
The Department of Financial and Professional Regulation is the main licensing agency for the State of Illinois. IDFPR is comprised of three divisions that represent the agency's various functions and activities:
For a complete listing of professions regulated and licensed by IDFPR start here.
To contact the Department by phone, mail, or in person:
320 W. Washington
Springfield, IL 62786
(217) 782 - 3000
122 South Michigan Ave., Suite 1900
Chicago, IL 60603
(312) 793 - 3000
320 W. Washington
Springfield, IL 62786
(217) 782 - 2831
100 W. Randolph
Chicago, IL 60601
(312) 814 - 2000
320 W. Washington
Springfield, IL 62786
(217) 785 - 0800
100 W. Randolph
Chicago, IL 60601
(312) 814 - 4500
Illinois Department of Insurance
The Illinois Department of Insurance licenses and regulates all individuals who sell insurance in Illinois and determines their compliance with continuing education requirements.
Licenses are issued to producers, limited insurance representatives, public adjusters, premium finance companies, third party administrators and viatical settlement providers.
All producers and public adjusters must first pass a qualifying examination administered by an independent testing service.
All licensees are subject to investigations and examinations which may lead to regulatory action when violations are discovered.
Illinois Department of Insurance
100 W. Randolph Street
Chicago, IL 60601-3395
(312) 814 - 2420
Or in Springfield at:
320 W. Washington Street
Springfield, IL 62767-0001
(217) 524 - 4872
Information application packages may be obtained from:
Jefferson Terrace - Suite 300A
300 West Jefferson Street
Springfield, IL 62702
(217) 782 - 2256
Or in Chicago at:
69 W. Washington Street
Chicago, IL 60602
(312) 793 - 3384
And the list goes on...
In addition, many businesses are required to obtain permits or register with other state agencies. An example of this would be day-care services which are licensed by the Department of Children and Family Services. Trucking companies must register with the Illinois Commerce Commission. Those in the plumbing business register with the Department of Public Health.
Taxation for small businesses can be quite simple or very complex, depending on the size and type of operation. The following list outlines the major taxes with which a business must be concerned. Of course, the tax liability of each business will be different.
Every individual, corporation, trust and estate residing in Illinois or earning or receiving income in Illinois, must pay an income tax based on net income.
A replacement tax is also applied to the net income of partnerships, corporations and trusts.
S Corporations are subject only to replacement tax.
- Sole Proprietorship - A sole proprietorship must pay individual income taxes on earnings from the business
- Partnership and Limited Liability Companies - Each partner/owner must pay taxes on the distributive share of partnership/owner's income. In addition, Illinois has a replacement tax that applies to partnerships.
- Corporations - The corporate entity must pay a corporate income tax and replacement tax which is administered and collected by the Department of Revenue. In addition, corporations are assessed a franchise tax each year based on their paid-in capital and a Corporate Personal Property Tax Replacement Income Tax. Corporate and franchise taxes are administered and collected by the Secretary of State's Office.
Four categories of taxes comprise state and local sales taxes. These are:
- Retailer's Occupation Tax - a tax imposed directly on the gross receipts of a retail seller for the privilege of conducting business in Illinois. Retailers pay the Tax, and, by law, reimburse themselves for the tax by collecting Use Tax (see next) from customers, based on the selling price of the tangible personal property. The business can keep 1.75% of the taxes collected for acting as an agent for the Department of Revenue (so long as the tax is paid in a timely manner).
- Use Tax - a tax imposed directly on the purchaser for the privilege of using and consuming tangible personal property in Illinois that has been purchased anywhere.
- Service Occupation Tax - a tax imposed directly on the receipts from the selling price of any tangible personal property transferred as part of a sale of service, if the cost to the service person is 35% or more of the total charged.
- Service Use Tax - a tax imposed directly on the purchaser which is based on the selling price of the property transferred incident to a sale of service. The Service Use Tax is intended to reimburse the service person for his/her Service Occupation Tax liability.
Sales Tax Exemptions
All for-profit real estate owners are required to pay property taxes. The property tax rate is determined by local taxing jurisdictions and is paid to the township or county tax collector in the year following assessment (see "Taxes" under the Community Profile section of this page for information about local property taxes).
Certain taxes must be withheld from employee wages and remitted to the government. These include state and federal income taxes and FICA (Social Security).
You may be required to register with both the federal government and the State of Illinois for tax withholding purposes.
To learn more about your federal requirements, contact the Internal Revenue Service at 1 - 800 - 829 - 3676 or visit their Small Business Products Online Ordering page to request any of the following materials:
- Recognizing Illegal Tax Avoidance Schemes (Publication 3995) or view the brochure online
- Small Business Tax Responsibilities (Publication 4591) or view the brochure online
You can find other pertinent publications such as the following in the "Publications Online" section of the IRS Website, or simply click the link of the title you are interested in below to view it online:
- Employers Tax Guide (Publication 15)
- Tax Guide for Small Business (Publication 334)
- Starting A Business and Keeping Records (Publication 583)
Federal Employer Identification Number (FEIN)
Every partnership, corporation and S Corporation must have a FEIN to use as its taxpayer identification number.
A sole proprietorship must have a FEIN if it:
- Pays wages to one or more employees; or
- Files any excise tax returns, including those for alcohol, tobacco or firearms
Otherwise, sole proprietors can use their social security number as their business taxpayer identification number.
To apply for a FEIN.
The Federal Immigration Reform and Control Act of 1986 requires every employer to keep on file a form for every employee certifying that employee's identity and work eligibility.
For further information, contact the Bureau of Citizenship and Immigration Services (formerly known as the U.S. Immigration and Naturalization Service.
Wage Withholding For Child Support
Federal and state laws require judges in domestic relations cases to order employers to withhold a portion of an employee's income for payment of child support.
An Income Withholding Notice is prepared and served immediately upon the payor unless a written agreement by both parties to an alternative arrangement has been made.
If the payor becomes delinquent, the Income Withholding Notice will be issued.
The order is mandatory in cases involving Public Aid recipients.
When an Income Withholding Notice is served on the employer, the employer withholds the amount stated and sends the amount withheld to the State Disbursement Unit. If the employer fails to withhold wages as specified in the Notice, the employer will be liable for the amount that should have been withheld, and may have to pay a fine.
An employer may not discharge, discipline, deny employment or otherwise penalize an employee because they are subject to an Income Withholding Notice. An employer who does so may be ordered to em ply, reinstate and/or pay restitution to the employee. A fine may be imposed by the Court on the employer.
The Illinois Department of Health care and Family Services (formerly the Illinois Department of Public Aid) is the child support enforcement agency for the State of Illinois.
For more specific information on provision of wage withholding for child support, contact the Illinois Department of Health care and Family Services at 1 - 800 - 447 - 4278 or visit their Child Support Services web page.
You may be required to make unemployment insurance contributions to the Department of Employment Security.
Generally, you are liable for such contributions if you have:
- Employed one or more workers in each of twenty weeks in a calendar year; or
- Paid at least $1,500 in total wages during a calendar quarter
You also may be liable if you acquire all or part of a business already subject to the Unemployment Insurance Act.
To determine liability, complete and submit a Report to Determine Liability form (UI-1).
For additional information, read the Department's guide: "Fast Facts for Employers."
By law, an employer is required to provide insurance for employee's accidental deaths, injuries, and occupational diseases arising out of and in the course of employment.
The insurance requirement is applicable to almost all businesses and must include provisions for all medical expenses, rehabilitation and retraining, temporary and total disability, permanent disability and death benefits.
Insurance is generally purchased through private firms or agents, although business can apply to the Commission for permission to self-insure.
Annual premiums are based on total company payroll, loss experience and type of business.
Employers must post a notice in the workplace listing the insurance carrier and explaining worker's rights under the law.
Temporary workers who otherwise do not receive any company benefits are still provided worker's compensation.
For further information on worker's compensation, contact:
100 West Randolph, 8-200
Chicago, IL 6061
(312) 814 - 6611
Obtaining Legal Counsel
Many business owners consider legal services only when their firms are in trouble. However, costly and time-consuming legal problems can be averted by retaining a competent attorney who can advise on such business areas as:
- choosing the type of business organization that best suits your needs and objectives
- protecting your family's financial security from business risks
- advising you as to local, state and federal regulations which affect your business
- obtaining licenses and permits
- preparing or inspecting contracts
- resolving tax questions
- assisting in obtaining financing and,
- giving practical advice on many business problems
Attorneys also can provide professional help when dealing with other parties such as:
- financial institutions
- owners of possible store or plant locations
- union officials
- governmental bodies
- franchising companies
- contracts with suppliers and customers, and
- insurance coverage negotiation with employees
In addition, other problems may arise requiring the services of an attorney. For instance, the employer may be served with wage deduction orders against employees which, if not handled properly, can result in personal liability on the part of the employer. Other examples:
- The business may face collection problems with its customers
- The business may become involved in disputes with its trade creditors
- The business may have disputes with both present and former employees
- The business may have expansion opportunities or restructuring may have to be considered
When seeking an attorney's counsel or assistance, be as prepared as possible. Collect pertinent data, do necessary research and have as much information as possible about your business. This will save your attorney time and you money.
When considering an attorney, use discretion. Remember, an attorney will provide services fundamental to the success of your business.
There are several methods for selecting an attorney. It may be prudent to seek recommendations from other business owners. The Martindale-Hubbel Law Directory contains a listing and rating of attorneys in your city; a copy may be found at the local library. The public library is also a place to obtain reference books on legal topics. Included in this group is the Small Business Legal Advisor by William A. Hancock, published by McGraw-Hill.
Many people starting a small business fail to consider their insurance needs. A well planned insurance program is essential for protecting a business from unforeseen losses and significant financial burdens.
Four types of insurance coverage are essential:
- workers' compensation
In addition, there are several desirable types of insurance coverage:
- business interruption
- key employee
In organizing an insurance program, there are four basic considerations:
- Recognize your risks - recognize the perils facing the business and the potential loss from each
- Study insurance costs- before purchasing insurance, investigate the methods by which you can reduce the cost of coverage. This includes "shopping" for the appropriate insurance plans.
- Have a plan - prepare an insurance plan that is compatible with the operation and goals of the business
- Get professional advice - a qualified insurance agency, producer, broker or consultant can explain options, recommend the best coverage and help save money
Access to proper information is provided by a sound bookkeeping system.
Functions of a good system include:
- Starting and keeping an accounting system for the accurate and timely recording of the company's cash receipts, disbursements, sales and operating expenses
- Preparing periodic statements. This includes statement of assets and liabilities as of a given date (balance sheet), statement of results of operations for a given period of time (income statement), statement of changes in financial position, and establishment of systems that track accounts receivable and payments due
- Preparing state and federal income tax returns
- Preparing social security, withholding, property and other tax returns
These responsibilities may be undertaken from within or outside of the business. This will depend on the size and nature of the business and your own experience and available time. Your accountant, attorney or banker can help decide your needs for a bookkeeper or bookkeeping service.
In addition to bookkeeping requirements, you may need the services of a certified public accountant (CPA), an accountant who has passed a written examination prepared by the American Institute of Certified Public Accountants and who has received a state license for their public practice of accountancy. CPAs provide the following services:
- Auditing - Although you may have hired a bookkeeper to maintain accounting records and prepare financial statements, there are many reasons why you may need financial statements certified by a CPA. For example, banks and other lenders frequently require an audit before a loan is granted and during the period that the loan is outstanding.
- Taxes - Most businesses do not have employees who are experts in tax matters and, therefore, must rely on professional assistance. This is particularly true today when the tax laws are complex and continually changing. The tax services provided by CPAs include planning transactions for the lowest present and future tax liabilities, preparation of tax returns, conferences with taxing authorities who are examining prior years' tax returns and estate planning.
- Consulting - Because of their experience with many companies in many industries, CPAs may be able to assist you in cost reduction, improvement of reports, installing or upgrading accounting systems, budgeting and forecasts, financial analyses, production control, quality control, compensation of personnel and records management.
The Independent Accountants Association of Illinois (IAAI), established in 1949, also can refer a competent accountant to the potential Illinois small businessperson. IAAI's membership is composed of both CPAs and non-CPA accountants. Many of the IAAI accountants are licensed to represent a client before the IRS. Non-CPA accountants can assist with accounting, sales and payroll tax preparation and other business consulting needs.
The Illinois CPA Society is the state professional association representing more than 25,000 certified public accountants. The Illinois CPA Society is one of the largest state CPA Societies with members in education, government, industry and public accounting.
Members of the Illinois CPA Society are bound by professional ethical standards.
The Illinois CPA Society sponsors several public service programs. Some of these include: Disaster Relief Assistance for those in need of tax assistance after a natural disaster (floods, tornadoes, etc.), teaching educational courses for small business owners, and speaking engagements throughout the state. For more information, contact The Illinois CPA Society.
There are associations to represent every business/trade/professional imaginable.
Associations are engaged in promoting the business interests of their members and often:
- conduct research
- provide educational services
- develop statistics
- sponsor quality education and certification standards
- lobby public officials
- publish newsletters, books and periodicals
Benefits may include:
- free attendance at trade shows and conventions
- workshops and seminars
- dollar-saving bankcards
- promote public awareness of and the value of your trade
- and, in some instances, provide insurance
The smaller business owner has little time to lobby government officials on issues of interest, which makes a membership in an association a valuable aspect of operating a business, especially if your profession/trade is heavily regulated.
Additional benefits include networking with people in your field of interest and keeping up with industry trends and developments.
Chambers of Commerce
The Illinois Chamber and local chambers of commerce act in much the same way as associations and offer many of the same programs. Chambers, however, support the entire concept of a community and market the area as a whole, which includes its businesses, churches, schools, parks & recreation, special events, historical significance, natural environment and other civic amenities. Benefits of membership in a chamber include opportunities to network and create an awareness of business name, product or service.
By getting involved in chamber activities, members have the opportunity to meet and work with area business leaders on issues impacting not only business, but also the area. Chambers work to improve the economic climate, business environment and community's image as a whole.
Financial resources available to small businesses can vary depending on whether you are starting a new business or purchasing an existing business.
The most common source of financing for a small business is personal resources. Many businesses begin on a "shoestring" or household budget until their financial situation and cash flow are stable. Friends, relatives and financial institutions also are potential sources of financing.
Business loans for startup enterprises are not easily obtained, but fortunately there are various alternatives to consider. US Small Business Administration (SBA) has alot of information regarding loan programs.
How To Apply For A Loan
The following guidelines should be used for the current or prospective business owner when preparing to request financial assistance. Those wanting to start a business should:
- Describe the type of business you plan to establish
- Submit information on the products or services the business plans to offer and identify existing and potential customers and competitors
- Describe your experience and management capabilities
- Prepare an estimate of how much you or others have to invest in the business and how much you will need to borrow
- Prepare a current financial statement (balance sheet) listing all personal assets and all liabilities
- Prepare a detailed projection of earnings for the first three years the business will operate
- List collateral to be offered as security for the loan, indicating your estimate of the present market value of each item
- State the amount of the loan and exact purpose(s) for which it can be used
Those already in business should:
- Submit a brief history of the business and its employment growth
- Submit information on your company's products or services and identify existing and potential major customers and competitors
- Prepare a current financial statement (balance sheet) listing all assets and liabilities of the business
- Have an earnings (profit and loss) statement for the last two years and for the current period to the date of the balance sheet
- Prepare a current personal financial statement of the owner, each partner or each stockholder owning 20 percent or more of the corporate stock in the business
- List collateral to be offered as security for the loan, with an estimate of the present market value of each item
- State the amount of the loan requested and exact purposes for which it can be used
Along with the preceding information, a business plan should be submitted to the lender outlining the basic structure and direction of the business.
Overview Of Federal And State Financial Assistance Programs
There are a number of financial assistance programs available to the business community here in Illinois, including aid from federal sources:
- US Small Business Administration (SBA) - The SBA has a number of programs and services available. They include training and educational programs, advisory services, publications, financial programs and contract assistance. The agency also offers specialized programs for women business owners, minorities, veterans, international trade and rural development. Local SBA resources are available through the SBA-Direct program.
- State of Illinois - The Department of Commerce and Economic Opportunity (DCEO) is Illinois' lead economic development agency, with a wide range of programs and services.
Businesses have special financial needs and the types of commercial accounts available are as varied as those for individuals. Work with your local banker to discuss the following banking services:
- Commercial Checking Accounts - Checking account services are available for every size of business, with custom check design and a variety of check formats that provide audit controls for the account. Service charges may be calculated on the number of checks written and the number of checks deposited, plus a monthly maintenance fee. In most cases, an account receives a monthly earning credit based on an average of previous weeks' Treasury Bill rates which is applied against the service charges calculated for the account.
- Commercial Deposit Services - Commercial Bulk Deposits allow the business to process bulk change, pick up currency or drop off large deposits. Also, with the advent of 24-hour automatic teller facilities, businesses as well as individuals have greater access to certain banking services. Federal Tax Depository Services also are available to help prevent a penalty for late payment of taxes. The date the bank accepts the deposit establishes the date of payment.
- Commercial Savings/Investment Services - Business Savings Programs allow a business to deposit up to a certain amount in a savings account that earns interest on a percentage per year, compounded continuously for an effective yield. Short-term investments also are available using Certificates of Deposit and Repurchase Agreements.
- Loan Services - In some instances, the bank can provide assistance in obtaining and financing loans. The following are some possible areas of assistance:
- Working capital loans provide short-term access to interim operating funds.
- A revolving line of credit is a pre-established borrowing limit that can help meet monthly expenses.
- Inventory financing or a seasonal line of credit can help see the business through cyclical, capital-intensive periods which are common to agriculture and certain types of wholesale and retail operations.
- A letter of credit from a bank can improve purchasing power in business transactions outside the local area.
- Accounts receivable financing allows borrowing against business already on the books.
- Equipment financing and leasing arrangements can help to properly equip the business or expand it when it is ready to grow. - Capital loans provide venture capital to help start or invest in a commercial enterprise.
- Real estate mortgages are available to help acquire property and real estate management services can help manage the property.
- Credit investigations can help protect the business owner when dealing with unfamiliar sources.
- Other Services - The nature of banking is such that it lends itself readily to other services. Following are some of the other services offered by banks:
- Business advice - It frequently is said that the banker should be a business guide and friend to his clients. Bank officers develop a broad understanding of the operations of their clients' businesses. Some banks employ engineering and management experts who are made available to their clients for suggestions and guidance. It is very important to find a banker who is interested in you and your company.
- Credit advice - Every sizable bank has a credit department that handles problems that arise daily. A bank with a good credit department frequently can be helpful to the business owner.
- Agent services - Although it may act as an agent in many important and complex ways, the use of a bank as an agent for collection and disbursement services of various kinds can be of invaluable assistance to smaller businesses.
- Trust services - Most banks have trust departments that, among other things, handle financial affairs for people who want them to manage or hold investments, and to collect income and pay it out as agreed. Also, many times a bank is named as executor in a will to take charge when an individual dies.
- Safe deposit boxes - Many banks provide safe deposit box services. The service is a simple one and is frequently used for the safekeeping of various business records.
- Investing Profits - Because it can be difficult to anticipate volume and a general unwillingness exists to take a market risk, many businesses prefer to leave profits in an interest-earning commercial checking (NOW) account. NOW accounts are available only to sole proprietorships and partnerships unless a corporation is not-for-profit. However, several other avenues might be explored:
- High grade commercial paper
- Municipal bonds
- Treasury bills or tax anticipation notes
- Certificates of deposit
Check with the bank's investment advisor or a stock broker for the best plan for your business.
Uniform Commercial Code
Chapter 810, Illinois Compiled Statutes, Act 5, Article 9, Part 1, contains the provisions of the Uniform Commercial Code - Secured Transactions.
If you borrow money using certain items of commercial property as collateral, the lender has the right to file a lien on that property with the Secretary of State's Office, Uniform Commercial Code Division. This guarantees the lender first rights to the property if you default on loan payments or file for bankruptcy.
Many financing plans for small businesses involve, at least in part, the issuance of securities.
Some of the most common forms of securities utilized by small businesses are:
- common or preferred stock
- limited partnership interests
- debt with an option to convert into stock
- warrants to purchase stock
Debt financing obtained from parties other than commercial lenders also may involve a security.
Securities must be registered with the Secretary of State's Office, Securities Department, before being offered or sold in Illinois, unless the securities are exempt from the registration requirements.
Persons selling the securities also may have to be licensed by the Securities Department.
If the business is seeking securities financing in any other state, it probably will also have to comply with federal and the other states' securities registration requirements.
Consult an attorney about whether your financing plan involves securities and the applicable registration requirements and exemptions.
Determining Business Location
The location of the business often is determined by the type of business. Many sole proprietor operations are run in the home. Indeed, some occupations make that desirable and you are entitled to certain tax deductions which can be determined by discussing your business situation with an attorney or accountant.
Check local ordinances regarding owning and operating a business from your home.
The Galva Zoning Ordinance defines a home occupation thusly:
A gainful occupation or profession customarily carried on by an occupant of a dwelling unit as a use which is clearly incidental to the use of the dwelling unit for residential purposes. The "home occupation" shall be carried on wholly within the principal building or within a building accessory thereto, and only by members of the family occupying the premises and one person outside the family. No article shall be sold or offered for sale on the premises except such as is produced by the occupation on the premises. There shall be no exterior display; no exterior storage of material, no other exterior indication of the "home occupation" or variation from the residential character of the principal building, and no offensive odors, noise, vibration, smoke, dust, heat, or glare shall be produced. Offices, clinics, doctor's offices,hospitals, barber shops, tea rooms, restaurants, beauty parlors, dress shops, millinery shops, tourist homes, animal hospitals, and kennels, among others, shall not be deemed to be "home occupations."
Opening An Office
If the decision is made to have an office outside the home, a reputable real estate agent specializing in leasing or selling commercial space can help determine a quality location. Take as much time and care in choosing a business site as in choosing a home. The average employee spends 25 percent of his/her time at work and the environment should be as conducive to business as possible. In addition, a local office furniture and supply store can give valuable help in getting the office set up. It can assist with everything from color schemes to company logo design. Shared office space is another alternative whereby space is rented on a yearly, monthly or even hourly basis. Conference rooms, steno service and mailing address use are but a few options.
If your business has additional employees, chances are someone will be ill or unexpectedly absent for personal reasons. If this absence will create major inefficiencies, consider contacting a local employment agency.
Temporary services can supply clerical personnel and, in some instances, workers for light industrial positions. A temporary replacement can usually be on the job within a few hours. The company will charge an hourly rate based on job description. If dissatisfied with the help provided, there generally is no charge. Check the yellow pages of the local telephone directory for Temporary Employment Agencies.
If known in advance that an employee will be out of the office (vacation, for example), contact your local college or university and ask for their placement offices. Students often stop by to check bulletin boards for local job offerings.
There will be instances, of course, when the business must go on without replacement help. If it is obvious that the business is understaffed, explain the situation to the customers and request their patience. The majority will be quite understanding.
Credit Card Service
In this age of plastic, most businesses accept major credit cards as payment for services or product.
A local bank can make your business accessible to the Visa, MasterCharge, American Express and other credit card systems.
When contacting a bank which handles those accounts, you will be asked to provide commercial and financial statements, and the bank will do an analysis of the business' solvency. If unable to estimate the business' income, a personal credit check will be conducted to ascertain dependability.
Upon approval, the bank will establish a commercial account for the business into which you deposit the credit card "bank" copies. The bank receives statements from the credit card company and remits payment from your account.
Each bank imposes a processing cost on the business account depending upon average sales and volume. This can be anywhere from two to twelve percent -- usually the former.
The bank and the credit card company can either rent or sell one or more credit card machines. At some point the business may want to consider more sophisticated equipment which automatically determines the validity of a credit card. After signing an agreement with the bank, the business will receive monthly statements of account balance.
Check Cashing Protection
A business can enhance its profits by welcoming a potential customer's check, but along with a check cashing policy comes the built-in risk of receiving a bad check. No business is immune. There are several ways, however, to be as protected as possible when providing this service.
It is sound policy to have the check writer include their phone, driver's license and social security numbers on the check. The check should have the person's name and address pre-printed. In case of problems, the writer can be reached.
In order to verify if a check is good at point of purchase, several companies provide a tracking system and can tell a subscribing member (generally via an 800 number) whether or not to accept a check. For a one-time enrollment fee, a sales representative will explain the service and provide training for employees on how to use the system. Thereafter, a monthly fee entitles you to check verification and guaranteed payment if the service indicates a check is good that subsequently is not.
There also are check cashing protection systems that will guarantee, up to a certain limit, all bad checks you receive. Acting as a type of insurance agency, the systems charge a monthly rate based on the average volume of checks you receive, and provide personalized service. When you receive an "insufficient" or "non-sufficient funds" (ISF/NSF) check returned by a bank, you have several recourses:
- Wait a reasonable amount of time and redeposit the check
- Contact the individual who wrote the check requesting that they make the check good
- Post a notice alerting employees not to accept checks from the individual until the outstanding check is made good
- If satisfaction has not been received within a reasonable amount of time, send a written demand to the person's last known address by certified letter, return receipt requested.
By law, the individual who fails to pay the amount of the written check within 30 days is liable for triple the amount owed, plus attorney's fees and court costs for recovery. In no case is that amount less than $100 or more than $500 plus fees and costs.
In order to bring a civil suit in small claims or other appropriate court, you will need a copy of the letter, certified mail receipt, a copy of the check (front and back), and a letter from the bank indicating that the check is no good.
Another course of action would be to contact the local State's Attorney's Office. The State's Attorney's Office may contact the maker of the check by letter to finally resolve any questions of inadvertence or may initiate prosecution immediately. Upon initial contact with the State's Attorney's Office, you will be asked to complete an incident report to aid in prosecution of the case.
Remember that most people do not set out to defraud or pass bogus checks, but there are enough who do, so remain alert.
The local police department may be a source of assistance if forgery is suspected.
Public relations can be simply defined as "doing good things and then making an effort to alert people that you've done them." In a practical sense, it means getting the word of the positive, newsworthy things that happen in or at your place of business to the media so they, in turn, will tell the story to their audiences -- your potential customers. When this happens successfully, the end result is publicity.
Good publicity is any news that is of potential interest to the people in the community. People make news. Employee promotions and awards make news. Events make news -- business opening, special promotions, anniversary celebrations, participation in or sponsorship of a community activity. Innovations are news -- a new product, a new service.
The more consumers read, see and hear about a business' positive accomplishments, achievements and activities, the greater the awareness will be of you and your business in the local community, resulting in a better image.
Awareness and a good image are what can set a business apart from competitors.
Patents, Trademarks and Copyrights
In some instances, "protection" may be sought for a product, service, new invention or printed material. Following is a brief discussion of the three primary kinds of intellectual property protection, each of which serves different purposes.
A patent is a grant of a property right by the United States Government to the inventor (or his/her heirs or assigns). The grant is made through the United States Patent and Trademark Office.
There are three types of patents:
- Utility patents may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof. Utility patents are granted for a term which begins with the date of the grant and usually ends 20 years from the date it was first applied for subject to the payment of appropriate maintenance fees.
- Design patents may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture. Design patents last 14 years from the date the patent was granted. No maintenance fees are required for design patents; and
- Plant patents may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant. Plant patents are granted for a term which begins with the date of the grant and usually ends 20 years from the date it was first applied fort
Each patent application is a unique document that is prepared individually by the inventor, with or without the help of a patent attorney. The first step in developing an application is a search to be sure the invention is indeed new, unique, non-obvious and, for utility patents useful. When the document is prepared is filed with and examined by the United States Patent and Trademark Office. All fees may be revised annual, taking effect October 1, the beginning of the federal government's fiscal year.
General information concerning patents is available on the Web at the United States Patent and Trademark Office website.
The State of Illinois has a designated Patent and Trademark Depository Library which is housed in the Chicago Public Library.
Use the trademarks section of the United States Patent and Trademark website to research trademark information.
The mark must be in use in Illinois before it may be registered and examples of this use must be submitted with the application for registration.
For research and/or trademark/service mark registration with the State of Illinois, start with the Secretary of States Trademark/Service Mark web page.
Copyright protects the author, generally allowing the "author" to control the copying of his work. Additional information, forms and electronic filing of copyrights can be done through the Library of Congress web page.
Business.gov, which, by the time you read this may be merged with SBA.gov, puts it succinctly: "The federal government does not provide grants for starting or expanding a business."
The federal government does provide grants for specific non-commercial purposes: "If your small business is engaged in scientific research and development (R&D), you may qualify for federal grants under the SBIR (Small Business Innovation Research) and the STTR (Small Business Technology Transfer) programs...."
Government agencies generally do not make loans directly to business owners. The government provides a guaranty to banks and lenders for money lent to small businesses. This guaranty is a promise to pay a portion of the loan back to the bank in case a business owner defaults on the loan. A guaranty reduces the lender's risk, which allows the lender to make loans to business owners who do not qualify for traditional loans.
That said, there are literally hundreds of loans available to small businesses, and following are some resources available to help you find one if needed:
- Starting and Expanding Businesses
- Basic 7(a) Loan Program - For starting, acquiring and expanding a small business, 7(a) loans are the most basic and most used type loan of SBA's business loan programs. Borrowers must apply through a participating lender institution.
- Certified Development Company (CDC) 504 Loan Program - The CDC/504 loan program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.
- Microloan Program - Provides very small loans to start-up, newly established, or growing small business concerns. SBA makes funds available to non profit community based lenders which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level.
- Disaster Loans
- Disaster Assistance Loans - If you are in a declared disaster area and are the victim of a disaster, you may be eligible for financial assistance even if you don't own a business.
- Economic Injury Loans - Money to assist small businesses, small agricultural cooperatives and non profit organizations recover from economic losses resulting from physical disaster or an agricultural production disaster.
- Export Express - Provides exporters and lenders a streamlined method to obtain financing for loans and lines of credit up to $250,000. Lenders use their own credit decision process and loan documentation; exporters get access to their funds faster. The SBA provides an expedited eligibility review and provides a response in less than 24 hours.
- Export Working Capital - Loans targeted for businesses that are able to generate export sales and need additional working capital to support these sales.
- International Trade Loans - Term loans designed for businesses that plan to start/continue exporting or those that that have been adversely affected by competition from imports. The proceeds of the loan must enable the borrower to be in a better position to compete.
- Veteran and Military Community Loans
- Military Reservist Economic Injury Disaster Loan - This loan program provides funds to eligible small businesses to meet its ordinary and necessary operating expenses that it could have met, but is unable to meet, because an essential employee was "called-up" to active duty in their role as a military reservist.
- Special Purpose Loans
- CAPLines - CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs.
- Pollution Control Loans - Provides financing to eligible small businesses for the planning, design, or installation of a pollution control facility.
- U.S. Community Adjustment And Investment Program (CAIP) - CAIP is a program established to assist U.S. companies that are doing business in areas of the country that have been negatively affected by NAFTA. To be eligible, business must reside in a county noted as being negatively affected by NAFTA, based on job losses and the unemployment rate of the county.
The State of Illinois offers several programs designed to help existing as well as prospective businesses compete on a state, national and international level. The majority of these programs are administered by the Department of Commerce and Economic Opportunity's (DCEO's) Office of Business Development. Those not directly administered by the Office of Business Development may be accessed via DCEO's website or by one of the links below.
The Illinois State Treasurer's Office offers interest rate reduction programs to large and small businesses, to include child care providers.
The Illinois Finance Authority administers several programs targeted to energy, health care, education, not-for-profits, agri-businesses, industry and small businesses.
DCEO's Office of Coal Development provides grant and loan programs targeted specifically to the coal industry.
The Office of Energy & Recycling administers energy efficiency, renewable energy, recycling and biofuels programs.
The Illinois Film Office offers thirty-percent (30%) tax credits to producers on all qualified expenditures.
Technology grants, including bio, nano and manufacturing technology are administered by DCEO.
Industrial, commercial and service businesses locating or expanding in Henry County may seek loan participation assistance from the Henry County Rural Revolving Loan Fund (RRLF or Fund).
Prospective applicants should note the following:
- The Fund will not exceed a participation level in excess of $100,000.00
- No more than one-third (.33%) of the project's total costs will be funded.
- The borrower is responsible for providing financing in excess of the one-third maximum limit (e.g., conventional bank loan, grants, SBA loan, etc.).
- One job in Henry County must be created for every $10,000 borrowed.
- The borrower must be able to demonstrate a ten percent (10%) equity stake in the total cost of the project.
- Collateral will be required.
- A personal guarantee will be required from all owners having a twenty percent (20%) equity stake or better in the company.
- The interest rate is determined by subtracting four percentage points from the current prime rate.
- The term of the loan may not exceed ten years (less if used for working capital or equipment).
For more information, contact Lori Merrill with the Rural Revolving Loan Department:
The RRLF Department
Henry County Courthouse
307 W. Center Street
Cambridge, IL 61238
(309) 937 - 3574
The City of Galva maintains three seperate Tax Increment Financing Districts, and is eager to review projects for those districts that will provide job creation and EAV enhancement.
As an economic development (or redevelopment) tool, Tax Increment Financing (TIF) can help to defray all or some of a developer's costs for:
- land acquisition
- demolition of existing structures
- site preparation
- site improvement
- public infrastructure improvements
- job training
- partial financing costs
- land development studies
- some professional services (such as engineering or financial planning)
Reimbursement of all or some of the above expenses comes after the project begins to add a taxing increment to the public treasury through annual payments of property taxes.