Things You Need to Know About Venture Capital


When your startup is growing, there might be a time when you think you will need Venture capital. Typically, Angel Investors write checks that are considerably lower in value than want Venture Capitalists will write. This simply means that the latter supports the growth of the startup from the seed stage to much later as well.

venture-capital

Since VCs tend to deploy significantly larger amounts of money and they expect higher returns, it can be quite challenging to raise money from them too.

 

If you are looking to raise some venture capital, here are the things you should be aware of:

Is your business VC backable?

Every founder feels that their ideas are outstanding and that they are more than worthy of an investment. However, the fact is that while most ideas may be worthy of some kind of investment, they might not really be worthy of venture capital investment. For instance, if you are opening up a small restaurant, VCs wouldn’t really be interested in funding it, and a bank loan will be much more suitable option for you.

VCs typically take the size of the market into account and if they feel that isn’t sufficiently large, they won’t be interested in funding your venture. This is why it is important that you understand the size of your market before you go out to raise any money for your venture.

What is the fund & check size?

Before you think of raising money, you need to understand exactly how VCs make their money. They have limited partners as well as general partners. The latter actively manage the money while the former are passive investors and they contribute capital. The general partners make money through management fees and on carry. In short, the VCs don’t really make any money until the entire original money has been paid back. This is why you need to understand what the dynamics between the fund size and the cheque size is.

The other important thing is that Venture Capital investors want to know you better. They want to know who the founders are; they want to see them make progress and execute, before they commit to investing in their venture.  Keep all your paperwork and financials ready when you are going to meet the VCs. Raising Venture Capital isn’t child’s play and you need to be well prepared on all fronts.


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What Causes Low Productivity in Small Businesses?


In small businesses, even a single employee is valuable and should contribute in some substantial way towards the success of the venture. Most small business owners will only employ a limited number of key personnel to handle essential tasks; so it’s important to ensure every employee is productive. Unfortunately, this is easier said than done and is often neglected in such establishments.

Productivity in Small Businesses

Here we list some possible causes of low productivity and their solutions.

Management Problems

Regardless of whether the business is large or small, this is one of the most common causes of low productivity. Owners usually double as managers in such establishments, but they don’t have the training and experience to handle employees well. Small business owners should research employee management practices and ensure they provide their people the support they need to work well. If you create a good environment in your workplace because employees are comfortable and eager, your business would enjoy high levels of productivity.

Employee Dissatisfaction

This is also one of the most common causes of low productivity. When employees work, they need to feel like they’re rewarded for their efforts. Most business owners assume that money is the only incentive that motivates employees, but in most cases, that’s not true. Employees also value active feedback, acknowledgment of their hard work, personal and professional growth, and learning.

These things offer deeper fulfillment and encourage them to work harder. The best way to deal with employee dissatisfaction is to get to the root cause of the problem and work with your employees to find a solution. That would show them you care about their well-being and are willing to go the extra mile to keep them happy in their professional life.

Outdated Systems

There are many ways in which you can improve and simplify your business process. Today, you have access to cloud-based software, sophisticated operating systems, and other such tools to help improve the overall productivity of your company. If you still stick with old and ineffective systems, you’ll start to lag behind your competition. You should consider automating anything that can be automated, and streamline your business process. You’ll find that your employees will work better in such environments and your business expenses will be lower.

If you know and understand the causes of low productivity, you can develop strategies to correct them and encourage your employees. It’s a good idea to consider all your employees and their potential carefully, and help them find their stride.


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What is Big Data and How Can It Help You?


What is Big Data and How Can It Help You? The term Big Data has been around for a long time now and most people understand what it means. It allows business owners to make smarter marketing and sales decisions and make sure their investment provides good returns. Big corporations often use this information to create precise and targeted marketing campaigns and improve their visibility.

Big-Data

However, small businesses are still wary of it and consider it a hassle not worth the time and effort. When used correctly, Big Data can increase your visibility and improve your marketing campaigns.

What is Big Data?

Big data is a large set of information that reveals patterns, trends, customer tendencies, and other such information related to human behavior and interactions. Excellent marketers often rely on this information to form successful campaigns. The collection of charts and statistics might seem intimidating at first, but it reveals a lot about your prospective customers and can help your business flourish.

How to Use Big Data?

Today’s market is highly competitive and businesses need to go that extra mile to get attention from prospective customers. Small businesses with limited resources can’t afford to make haphazard investments and decisions and that’s why planning is absolutely essential to them.

Here’s how you can use big data to improve your business:

  • Narrow Down the Parameters – If you don’t want to swim in an excessive amount of information, you need to narrow down the parameters and sharpen your focus. You should identify pieces of information that are most crucial to your business. The scaled-down amount of information would allow you to incorporate it more easily into your business.
  • Product Improvements – Because big data gives you a significant amount of information about your customer’s likes and dislikes, you can use it to improve your products and services. That would have a direct impact on your sales and improve your reputation.
  • Consider the Technology – It’s important to consider the technology needed to collect big data. Some applications collect excess information that you have to sort through and organize. That’s just a waste of time and money so you should pick software that’s easy to use and more streamlined. That would make using big data less complicated.

While it takes some time and effort, big data is a great investment to make, especially if your business is new and you’re not very familiar with your target audience.


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Tackling Technology


Well written Tackling Technology could save your business Technology breeds technology. These days, it seems as though everyone is launching a tech startup. The popularity of technology continues to grow with every new app or platform that arrives on the market. So what are we to do with all this technology?

Tackling Technology

Whether you consider yourself a tech company or not, you could be doing a lot of harm to your business if you don’t invest in technology.

Here are some simple ways to start incorporating Tackling Technology into your company today:

  1. Get speedy

Automating workflows can greatly increase productivity and efficiency. By allowing technology to take over certain job functions, you can have more time to devote to things that really matter — whether that’s out bringing in new business, or giving back to your community. More time means you can make a bigger impact on the world around you.

  1. Get social

It’s a tested phenomenon that small businesses with an online social presence fare better than their non-tech adopting counterparts. The world is hungry for information, and content sharing has become a major form of communication between companies and their customers. If your company isn’t utilizing social media platforms like Facebook, Twitter and LinkedIn, you’re missing out on a powerful way to generate visibility and a connection with current and potential customers.

  1. Get secure

Every company needs to establish security systems to prevent hacks and breaches. These security systems don’t just protect your own investments, but in many industries also protect your customers. Faulty security, or a lack of security, can open your company up to attack and can quickly cause your customers to lose trust. Even if you’re not technology-minded, you absolutely can’t afford to overlook this crucial business system.

Some companies pride themselves on doing business the old-fashioned way. Old-fashioned values never go out of style, but in today’s business world, technology is crucial. Set your business up for the future by investing in these simple, yet superbly important, tech systems. Even those who feel resistant to technology can jump on board and believe me, your customers will thank you.


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Top Tips for Cyber Security in Small Businesses


The IT has become an essential part of our lives today. Businesses use it to expand their reach, store their data in the cloud, and communicate with customers and business associates. Most businesses have websites and often collect data about their customers through online forms and e-commerce transactions. Because we’re so connected with the Internet, cybersecurity is absolutely essential, especially for businesses. In this post, we would like to show you Top Tips for Cyber Security in Small Businesses

Cyber Security

The suggestions listed below would help you develop a thorough cybersecurity strategy.
  1. Antivirus and Antispyware

This is the most basic step and everyone should take it. Meanwhile, antiviruses and other security software protect your computer and data from malicious virus, spybots, and corrupted code. There are many security software packages available online. Besides, you can purchase one with a good reputation and reviews and install it in your system. Be sure to upgrade the software whenever a new security patch is released to combat the latest threats.

  1. Secure Your Business Networks

In the world of Wi-Fi, there is a vast number of connected devices. It’s important to secure your network well and guard all entry points with solid passwords and encryption. Your system would also need an efficient firewall to protect from hacking attempts. You can also hide your Wi-Fi network by placing it in a location where it doesn’t display your SSID to people outside your business property.

  1. Create Security Practices and Regulations

You need to establish a set of rules for your employees and associates. In this way, your sensitive data can be protected. You should teach them how to share and secure data over the Internet and how to protect their personal systems from external threats. This would ensure your employees take the right precautions and work together to keep your system secure.

  1. Conduct Cyber-Threat Seminars for Your Employees

It’s not uncommon for employees to accidentally open unknown attachments in the company system and download viruses or spyware into their device. If you want to avoid this, you need to educate your employee and ensure they know how to identify potential threats and counteract them. If employees still cause security problems, you should hold them accountable for it and act accordingly.

  1. Protect and Upgrade Your Website

If you have a business website, you need to protect it comprehensively. Besides, many business owners take the short cut and only secure the sign-in and shopping cart sections. That can leave other pages vulnerable and that’s the last thing you want.

Lastly, if you protect your business network and customer data well, your company would be more trustworthy and enjoy long-term success.


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Understanding What Social Entrepreneurship Is


Understanding What Social Entrepreneurship Is essential. It refers to the practice of using innovation, resourcefulness as well as opportunity to address various critical social-environmental challenges. A social entrepreneur focuses on transforming practices systems that are the primary causes of things such as environmental deterioration, marginalization, poverty, marginalization, or even any resultant loss of human dignity.

Understanding What Social Entrepreneurship Is

In doing this, they might set up either non-profit or for-profit organizations; however, their main objective is to create a very sustainable systems change. And so, the key concepts that define social entrepreneurship are market orientation innovation and systems change.

Let’s take a closer look at exactly what a social entrepreneur does:

Who is a social entrepreneur?

Social entrepreneur are typically drivers of change. They work in tandem with various networks, institutions and communities and create different solutions that are sustainable, and efficient, ones that actually have a measurable impact. These individuals also have very high levels of integrity and maintain transparency in the things they do. Social entrepreneurs are all united by their abilities to:

  • Adopt a certain mission to create as well as sustain social value (and not only commercial value)
  • Recognize and then relentlessly pursue various new opportunities to serve a specific mission
  • Engage processes of continuous learning, innovation and adaptation
  • Act very boldly without actually being limited by the resources that are currently in hand
  • They also exhibit very high levels of accountability to constituencies that are served, and the outcomes that are created.

A unique approach

A social entrepreneur is an individual that recognizes a social problem and then uses various entrepreneurial principles to create, organize & manage a venture to turn it into one of social change. This is very different from what a business entrepreneur does as they will measure their performance in terms of return and profit. Contrastingly, an entrepreneur is always focused on creating social capital. Therefore the primary goal of social entrepreneurship is to propagate social and environmental goals.

The other attributes of social entrepreneurs are that they are extremely ambitious and persistent, and they tackle major social issues very effectively, creatively and innovatively. They also offer new ideas that have the potential to bring about wide-scale change. They don’t really leave societal needs to the business sectors or the government. Instead, they find what isn’t working & then solve the problem by actually spreading the solution, changing the system and effectively persuading entire societies to follow new paths.


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How can Affiliate Marketing Help Small Businesses?


What is Affiliate Marketing and How Can It Help Small Businesses? It has been the buzzword in the marketing industry for some time now. It’s very effective. Like all marketing strategies, it needs to be implemented carefully to be successful; but if you do it right, you can gain rich rewards from the strategy. Like all marketing techniques, affiliate marketing has its pros and cons that you should consider carefully before you implement it. This article might give you a clear idea of what it is and how it can help your business.

Affiliate Marketing

What is Affiliate Marketing?

The Internet is full of key influencers and people who have a large fan following. These influencers often have highly popular websites and social media profiles and they regularly connect with a wide number of audiences. Affiliate marketing allows you to take advantage of this influence and expose your brand and products to their audience.

When you form an affiliate relationship with a website owner, you can post your ads, information, or banners on their website. You can also sponsor posts and reviews, which would give your target audience a more in-depth look into your products and services.

Does It Work?

Affiliate marketing has a high return on investment. Especially if you choose the right affiliates. It’s a mutually beneficial relationship that allows bloggers and influencers to earn more revenue from your website and ensures your brand get the right exposure.

Here are some advantages of the program:
  • Access to a Specific Target Audience – One of the biggest advantages of affiliate marketing is that it allows you to target a specific market in a more effective manner. For example, if you want to target the gaming community, you might want to develop an affiliate relationship with a gaming review and blogging website. It would give you access to a niche audience.
  • Easier to Manage – Small businesses usually have a limited number of affiliates so they can easily keep an eye on them and track how they perform and influence the target audience. You can monitor which affiliates provide the highest returns, and tailor your program accordingly.

However, affiliate programs have some disadvantages as well because you trust them with how your brand is exposed to the audience. If they don’t represent your brand well, your reputation can take a hit.

If affiliate marketing is the right choice for you to research potential candidates well before you dive into it. A good affiliate will bring the best traffic to your website and help you increase your revenue.


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Leadership Tips for Women in Business


Women being leaders and running their own businesses isn’t new and novel now. I decided to share with you some leadership tips for women in business. Many women have started and managed highly successful ventures and gone on to become remarkable leaders in their industry. However, women leaders still face many challenges and obstacles on their road to success and that can be difficult. The leadership tips listed below would help you establish yourself as a leader and be successful in the role.

Leadership Tips for Women in Business

Here are some Leadership Tips for Women in Business

  1. Express Your Opinions and Be Confident In Your Place

There are many leaders who hesitate to make their opinions known or put their foot down. Apparently, they don’t want to seem overbearing. Women are especially prone to this and this can hold them back. If you have ideas or feel like something has room for improvement, voice your thoughts calmly and comfortably. As a leader, you need to be confident in your actions so your employees can be confident in you.

  1. Communicate

In today’s work environment, being a distant and non-communicative boss will only hamper your business and cause problems with your employees. Good communication is the key to a successful business, especially if you’re a small business owner. You need to establish a good rapport with your employees and keep them in the loop about your company’s information and any big changes. If you develop a good relationship with your team, they’ll respond well to you and respect your leadership.

  1. Don’t Be Afraid to Take on Big Projects and Risks

If you have a solid relationship with your team, you can deal with big projects and take on ambitious risks with ample support. Sometimes, women leaders just aren’t ambitious enough and stubborn enough to take on challenges. They’re generally more patient and take a slow and steady approach to business growth. That approach does have a considerable amount of benefits and is always a wise choice, but sometimes your venture needs an extra push to succeed. Big projects will show your employees, competitors, and customers that you mean business.

  1. Be True to Yourself

Women bring a very unique perspective to leadership and that has proven to be successful in the past. However, sometimes they give up that distinct identity and way to leading to “fit the mold.” You don’t have to do that because sooner or later, you’ll become dissatisfied with yourself and your business.

Leadership can be tough, but if you have the right plan and execution, you’ll succeed and earn the respect of your employees.


Posted In - Entrepreneurship

Public Speaking Pointers for Small Business Owners


Not everyone is an extrovert and if you dread standing before an audience then, the Public Speaking Pointers for Small Business Owners here are something you take into consideration. If you want to promote your business in an effective manner and take it to the next level, there will be times when you will have to stand on a podium and address people. And if you cringe at the very thought of it, this fear is something you should get rid of as soon as possible.

Public Speaking Pointers

Your speech need not and may not always be perfect, but it’s important that you be able to stand there and address people at meetings, conventions or conferences even.

Here are some pointers that will help you hone your public speaking skills:

  • Preparation– You should make every effort to put your speech together; it should have a logical flow and you should add an interest quotient to it by adding some props, examples, etc. You can try watching videos of great orators and that may give you some inspiration. You can also give your speech more fluidity by practicing it regularly.
  • Accentuate what’s positive– Become more aware of what your public speaking strengths and weaknesses are. Don’t attempt to change what you are. Instead, it’s better to focus on the things you do best. Whether you have a very good sense of humor or not use these things to your advantage in your public speaking.
  • Focus on your audience – It’s important that you be in sync with what your audience wants; their expectations or the problems that they want to solve etc. In short, ensure that you give them what they are looking for. You need to give your audience a reason to listen to you and when you start your speech; the opening statement has to be impactful enough to hold their attention.
  • Get into a more comfortable space– You should check out beforehand the location at which you will be speaking. This can help make you much more comfortable. You can take this aspect one step further and plant some good friends and supportive family members in your audience. This can boost your courage

In addition to these things, you should also focus on your appearance.Start your speech with a smile. It’s also a good idea to start off with some kind of story and try to make the session more interactive.  Follow these pointers and soon you will see that you are much more comfortable with making speeches in public.


Posted In - Entrepreneurship

Raising capital


Raising Capital for a New Business

Let’s just get the first obvious question out of the way. Do you want to be an entrepreneur? Since you’re reading this article, it is assumed your answer is a resounding YES! Don’t panic if you don’t know what your first or next business will do yet. That’s okay. Raising capital for a new business isn’t something that happens overnight. So, you have some time to make some of those early decisions still.

rising capital

Who Will Invest?

If you don’t want to put any of your funds at risk, you can probably kiss the possibility of someone else doing so. Unless you have very wealthy family members who are willing to indulge your whims. Most investors want to know how much of your assets you are willing to invest.

Even your family and friends don’t want to just throw money at you to dream away. They want to know you will work hard to get and stay profitable.

Build Your Business Plan

For all other options, you’ll need a business plan. Besides, your business plan needs information on your target market, future expansion plans, and more. Do your homework and pull a plan together. Even if you have the funds to start now. It’s a good idea to build your business plan early because it helps solidify what you need to know and do to become profitable. Or, it will show you that you need to work a little harder with your ideas so they can provide sufficient income.

 

  • Additional Investor

 

 

There are three big options after you’ve tapped your own account. For all of them, you’ll need a professional and thought-out business plan.

Small business loans through banks and other lending institutions offer lower interest rates. Sometimes it’s subsidized by government funding. If you fall into a special interest or minority category, it’ll be easier to get the funding. However, the government isn’t looking to invest in something that has no possibility of ROI.

Another possibility is getting money from a joint venture capital fund. Unless you have amazing connections or a product that can’t lose. The chance is not as good and the cost of bringing these investors might be high. However, if you do snag money in this way, you’ll be dealing with people who have skills and knowledge well beyond your own.

The third one is crowdfunding. Take some time to see how much they charge if they are reputable. Just go to your favorite search engine and type in crowdfunding sites. You’ll find a lot of them. Crowdfunding is a new approach to an old problem.

 

  • Funding Your Business

 

 

Crowdfunding and Bartering – A Dream Combination

Unless you haven’t joined the internet age, you must know about crowdfunding. But if you are like many people, hearing about it and knowing more than something you heard somebody say once about it are vastly different things. So let’s break it down.

The Idea Behind Crowdfunding

There are several hundred websites where you can start a crowdfunding campaign. However, it’s not as simple as just signing up and then waiting for the money to come rolling into the account. It’s essentially a bartering system. In the same way as people working for someone else trade their time and efforts for a paycheck, crowdfunding works best when you have something to trade for the funds raised.

You aren’t receiving a loan, but you will have to provide something of value to the person or people investing. So, what can you offer? Remembering that this is different than approaching a capital venture firm or angel investor. Those transactions are about a loan or a share of your profits or company. But crowdfunding is different.

Let’s say you are a screenwriter and already have gotten a nod from a producer in Hollywood. You need to spend the next several months writing the screenplay. Any advance received will not get you through even the first month. What do you do? You might set up a crowdfunding account and offer to name characters in the story. After someone’s newborn grandchild, or mention a company’s products in the script. In turn, they pay for that privilege at a rate you’ve set in advance.

It’s All About the Appeal

Getting a loan or investors need a professional plan and presentation. Crowdfunding is more about appealing to people’s creative or humorous side. If a moviemaker were filming a scene and the menu board is in the immediate background of the actors’ menu board might mean money in the bank. Instead of a Reuben sandwich, it could say an individual’s name or the name of a product as part of the sandwich name. Apparently, those could be for one amount added to the crowdfunding account, the actors ordering something with their name might be for another amount.

Since crowdfunding is used for all kinds of efforts and projects, it’s not just about a name. If your company is developing a product that will make a huge difference, then you can prepare a special offer for your investors. If you’re working on a new type of kitchen gadget or office product, then offering investors 25 % bring in enough funds to finish developing the product.

Bartering

Bartering is not the only way to make this work. Gathering money has become very competitive, and you need to have things set up to move quickly. That means a website for your business to show the possibilities and to refer people to the crowdfunding account you’ve established.

Exchanging goods or services may allow you to do all of that without spending any of the money for other purposes. If you have a separate skill or knowledge base, you can trade your efforts for someone else’s work. If you know all about accounting and you need a website, trade your accounting skills for website development. If you need effective web content written to draw people to your website and you are an artist, trade your artistic efforts for their writing ones.

The more you save your funds the better you will be. But just because you usually pay for something doesn’t mean you can’t try to bargain for those things too. Need fresh produce? Check to see if there is a farm nearby that you can trade for their dairy and veggies with your expertise as a tutor or pianist for one of their children. Get creative, have fun, and move your business forward all at the same time.

 

  • Leadership – women in business

 

 

Leadership Women in Business

Leadership means many different things to many different people, and there are just as many paths to achieving it. The number of women in leadership positions grows rapidly in today’s business world.

Women Who Succeed in Leadership Roles

There are many different answers as to why women succeed.  We all have good bosses and bad ones. Most women have learned to listen to not only get ahead in business but in everyday life. It is important to “deep listen” to what is being said as well as what is not.

Katie Rae, managing director of TechStars, feels that by knowing your people you can understand what may be the best approach or direction to go. Most successful businesswomen will tell you that building a team that supports you is a vital aspect of success in the business world.

Women Who Have Come Up Through the Ranks

Many women in leadership roles started out doing several different jobs in a company. Climbing their way up the corporate ladder rung by rung, starting at or near the bottom. That affords them a better understanding of what it takes to do jobs and how things are done from a broader perspective. That helps them see what needs to be improved as well as ways to move forward.

Brooke Moreland, who was head of marketing at Gett and cofounder of Fashism, feels it is important to remain humble and give credit to your employees. This helps build a supportive team of people who stand behind you and understand the goals and efforts needed to help gain success.

Both verbal and nonverbal communication is paramount in a team situation. Though each team member communicates in different ways, great leaders are respectful and listen. Leaders who can speak with their team members in a way each person understands takes work at first getting to know all the members individually, and then learning how they work together as a team But those in charge also understand the ultimate decision when it comes to the course and direction a team or company takes, is with the leader.

Don’t Be Afraid To Give Others Credit

Ever have that coworker or supervisor that took credit for your work? Nothing destroys morale faster than someone who succeeds by claiming someone else’s ideas. When someone presents an idea that builds you or your company, give the team or coworker credit. Go beyond that even. Share credit with everyone involved in the process. Get specific as you mention people and what they contributed to the project. According to Brooke Moreland, a lack of ego in leadership is appreciated and respected.

Be the leader you wanted to have as you came up through the ranks. Loyalty and appreciation are always a great thing in leadership.

 

  • Business Planning Strategy

 

 

Strategic Business Planning – Not Just Another Item on a Checklist

A strategic business plan has five primary elements:

  • Finding a vision for the future of your organization
  • writing a mission statement
  • setting the goals and stepping stones to be accomplished
  • planning a course of action to do so
  • working through everything necessary to accomplish those objectives.

All of that to be established and then completed over a one-year period.

So what’s the problem? Any serious business needs a strategic business plan. The problem which often happens is that once the plan is put together you simply forget about it. Check it thoroughly before setting up your business.  Quite likely, when you put it all together, you could put it all behind. If that’s the case, you might just have well spent the time doing nothing at all.

Future Vision

What is your realistic vision of where you want your company in one year, in five years, and in ten years? Do you know? The farther out the time for completion, the vaguer your vision is likely to be. However, that shouldn’t stop you from developing it anyway. Especially for the first year. Look at all areas of business. Where will you be financial? What about a place of business – will it be brick and mortar or all on the internet? How many employees will you have and how much do you expect your personal income? Having developed a strong idea of these issues allow you to create a plan of what goals and tasks you have to complete.

Don’t just look at what a similar business did to create their plan. That’s where your mission statement begins to set you apart. Decide what it is that will set your business apart from your competitors. Say it in a way that you and your people can look at the mission statement and know how they should be filling their role, how to behave within the company as well as with vendors, customers, and investors.

Use Your Vision to Set Objectives

Once you have a clear vision of where you want your organization to be, learn what you need to get there. Do you need a physical office or storefront location? How much will that cost? Where do you want it? If everything will be done through a website, you need to decide how that will look and find people to help set it up and get it running. Along with all of that, never forget the primary goal of any business – make money.

Identify which goals you have to tackle first and then establish the various steps to get to those goals. Every week go over those goals and steps to make certain things. Moving forward in a reasonable timeframe. If not, it’s time to light some fires or make adjustments to the schedule, but never forget your one-year goals. If the plan takes 13 or 14 months to complete, not a problem. If it takes five years, then it’s a big problem.

Make your plan and then make it work for you. That’s the reason you create a strategic business plan in the first place, not just to impress investors, but to get your wheels in motion.

 

    • Forming your company – type of entity

 

What You Should Consider When Choosing the Type of Entity You Need

Before looking at the types of entities, there is more to consider when making this decision than just the corporate code in your state. You also need to consider filing and ongoing maintenance costs, tax code for your state, and the goals you want to accomplish with the entity you will use.

The Cost of Doing Business

When forming a legal entity, which includes partnerships, limited partnerships, limited liability partnerships, not-for-profit organizations check with your state filing agency for costs and file each as well as annual charges. In most states that will be done in the corporate division of the Secretary of State’s office. While there, find out what paperwork you need to feel out. Most states require updated information to be filed annually.

You also need to know what private paperwork to maintain receiving the full benefits offered. Corporations usually include protection for shareholders. However, if annual minutes are not maintained that can make shareholders more susceptible to personal liability. If that’s the primary purpose of choosing a particular type of entity, then it is important to maintain the standard necessary after the entity is formed.

Liability

Sole proprietorships and LPs do not generally provide protection from personal liability. An LLC can operate the same way, but that depends on how the LLC is organized. If the new entity is likely to lose money, start it out as a sole proprietorship. If you are the sole owner and still mainly doing all of it yourself, a sole proprietorship will work well for you. In most states, you don’t have to file any paperwork unless you are doing business under a different name. The paperwork would usually be a county filing for a fictitious business name as well as reserving the business name with your state’s Secretary of State.

Taxes

The rules for federal taxes won’t change. So, you need to know which will be most beneficial to your situation according to IRS regulations. Find out about state taxes as well. Some states are very friendly to business. Some are more friendly to small businesses and others more generous to large entities. Make sure you know what advantages there are for businesses and their owners in your state. It’ll help you to benefit from them as soon as you can.

Legal

If you are just starting out, make some calls to local corporate or transactional attorneys. See if they offer a free consultation. Many do. They can offer you a better understanding of what would be best for your situation in your state. You can also call the state or county bar association and ask if they have a legal aid division offering free or very low-cost legal help.

Once you know all of the above information, forming an entity is usually a matter of filling out a few one-page forms. You can download those forms for free or buy them at a local office supply store.

If you don’t have a lot of extra time and can afford it, hire the attorney and let them take care of it on your behalf. It’s up to you.


Posted In - Entrepreneurship



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KEYNOTE SPEAKING

“TOP 10 KEYNOTE SPEAKER” – ENTREPRENEUR

BOOK SCOTT