Do you ever sit at your table in a restaurant and think about how your food got there? You probably wonder where the food came from and how it was prepared. As consumers, we love to know what are products have gone through to get to the final stages. Have you wondered what happens after you submit an order with MyCorporation? There are four key steps that occur to turn a phone call into a full legal filling. Continue reading
Whatever the aims for your business might be, there is a good chance that at some stage you will need to draw up a clear plan for its progress. The process of creating a business plan can be hard work but it also serves a variety of important functions, not least that of potentially attracting the finance that small companies so badly need in order to get started.
With that in mind, here are 6 tips for getting it right when it comes to building a great business plan. Continue reading
The end of the year is right around the corner, and every year we hear small business owners panicking about December’s rapidly approaching end, wondering what they have to do to end the year right. Not to worry – ending the year is actually pretty easy, as long as you don’t wait until the last minute to get everything done! So if you haven’t already, start thinking about…
Submitting any filings or dissolutions
Some of the most common questions we are asked revolve around the best time to form an LLC or incorporate. And while there are no ironclad answers to those questions, the beginning of the year is normally a good time to send in that paperwork. Deadlines and renewal dates are easier to remember, staying on top of your taxes is simpler, and you can even file your paperwork early and miss the beginning of the year rush if you opt for a delayed filing. Continue reading
We are onto the letter P in our weekly ABCs of Small Business Industry posts, and this week we are going to look at the publishing industry! The publishing industry has had its highs and its lows over the last few years. And, with a few major publishers facing rocky business, it is too easy to assume that the industry is on its last legs. However, small publishing agencies may be entering into a bit of a renaissance, and now could be a great time for new businesses to get into the publishing industry! But how do you do that? And what proof is there that the industry is doing better?
What do you need to do to get started in the publishing industry?
Like most unregulated industries, you don’t need anything special to get started in publishing. A DBA and any local licenses and permits are, at the very least, what you need to open your doors. Continue reading
As we enter week four of our series, we decided to look at a slightly different industry – banking. Now, focusing on banking may seem a bit odd. After all, most people don’t consider banking as something an entrepreneur can even get into. And while there are loads a regulatory loopholes to jump through, plenty of entrepreneurs do start their own bank! And running a bank can be quite lucrative. So if you have experience in the financial industry, and are looking for a change, this could be just the post for you!
How do you start a bank?
Like any business, you need to identify a need. Most communities are served by big-name banks like Chase or Bank of America, and people gravitate towards names they recognize. But even if it feels like your community is over saturated with corporate banks, there could be a place for a small, community bank, like if you decide to focus on serving a particular section or area of the community. Some people also like being able to meet face-to-face with a high-level executive to talk about loans or their account – something they’d never be able to do at a corporate bank.
If the market looks good, you then need to work on getting everything organized. Most states require banks to have multiple directors, who then put in an initial offering to get the bank started, usually around 25% of the bank’s starting capital. Since banks need a lot of capital to run, this is usually a substantial amount of money. Most banks sell off shares to raise the rest of their capital.
When your ducks are in a row, you file for a state or federal charter. Filing this form typically costs thousands of dollars, and requires a substantial amount of preparation. You’ll need to include information like feasibility studies, applications for the directors, projected costs, projected salaries – the state or federal government effectively needs to decide whether or not you’ll be successful before granting a charter. After this, you apply for deposit insurance from the FDIC, which requires banks to prove they have enough capital to cover any risk and losses. It will take a few months before the charter application is processed and, once it is approved, you normally have about a year to start the bank officially.
What business structures are best suited for banking?
Because banks are required to have directors, executives, and shareholders, a bank has to be some sort of corporation. However, in some states, a bank is an entity in itself. Though it is run in the same way a standard corporation is.
How stable is the banking industry?
Very. Because banks have to apply for a charter, an outside organization effectively reviews their business plan and target market, and determines whether or not the idea is viable. Banking costs a lot of money, but if you get a charter, you can usually bet that you’ll be successful. The rate at which banks fail has also slowed substantially as the economy has recovered.
Interested in community banking? Have any questions about the banking industry? Leave a comment below, or give us a call at 1-877-692-6772!
One of the least understood aspects of entrepreneurship is why some businesses fail while others succeed. The painful truth, according to a recent study by the University of Tennessee Research is that most businesses fail for one of the following three reasons.
46% of businesses fail due to emotional pricing, reckless spending, nonpayment of taxes, lack of planning, record keeping problems, and no knowledge of financing. Companies that succeed take pricing seriously. The prices they set are influenced by facts instead of emotions. As you set your prices consider the cost of material, labor, and overhead. Also, remember to keep in mind competitor pricing. Does this mean that you have to be the cheapest to compete? Absolutely not. You don’t have to compete on price, but you can’t ignore how much your competitors charge either. You can’t succeed on pricing alone, but your business will fail if you can’t get your pricing right.
Entrepreneurship comes with its fair share of perks — the freedom to create your own schedule, call the shots and be in charge of your own destiny is enough to make any cubicle worker drool. But it’s no secret that being a small business owner also has some heavy duty pressure; at the end of the day, you have ultimate accountability for your business’ success or failure.
Stressful? It can be.
But while there’s no cure-all for stress as a business owner, there are a few things you can do to ‘keep calm and entrepreneur on.’
Be flexible with your business plan.
Embrace that the first few drafts of your business plan will be wrong, no matter what. There are bound to be details you didn’t think of, or maybe your sales strategy just isn’t working the first time around. That’s okay! Once you’ve gathered enough data, you’ll be able to validate and/or rewrite the plan to better reroute your course.
Before going ahead with that new business plan for your start-up, ensure you know all legalities involved, especially the different types of business structures available. The law surrounding each entity can differ from state to state (and country to country!) but generally the rules and regulations are quite similar. However, it is a good idea to seek legal advice beforehand so you are fully aware of the risks involved. Below are some of the advantages and disadvantages of starting up a business as a corporation, limited liability company (LLC) or partnership.
Starting up as a… Corporation (equivalent to a limited company)
Setting up a corporation can be the preferred (and most beneficial) structure for employers looking to take on a large team of staff and have maximum legal protection. This type of business structure is owned by shareholders and has a board of directors.
Pros: A corporation is its own separate legal entity and is responsible for its own debt in insolvent situations, like administration or liquidation. This means, you, as a director, are protected if the corporation struggles financially.
It’s important to remember that the business owes money, not the director. If, however, directors have acted fraudulently, they will be exposed to the corporation’s liability.
Cons: There can be a lot of paperwork and filing of accounts when setting up a corporation, however this ensures everything is kept up to date and regulations as well as compliance are met. There are also higher tax fees which leads to more expensive accountancy fees.
Starting up as a… Limited Liability Company (LLC)
An LLC is a business structure that has more flexibility when it comes to taxes and regulations and is usually a good fit for small businesses. LLCs are owned by its members.
Pros: Like a corporation, you are protected against personal liability if the company enters insolvency. There is less paperwork to do as the structure is based around an informal agreement can be made when starting up and often adapted later on. An LLC can also choose how the business should be taxed
Cons: This type of entity is a fairly new structure and could be less favored than that of the ‘wise’ corporation structure. With perhaps an unfamiliar set up, investors may be more reluctant to lend.
Starting up as a… Partnership
As the name suggests, this business structure is set up with two or more partners and follows different common laws across the nation. However, there are some general rules that apply.
Pros: As structures get smaller in business size, so does the paperwork and filing of accounts. There are also fewer taxes to pay.
Cons: The big disadvantage of being in a partnership is you are personally liable for the partnership’s debt if the business falls in financial difficulty. Every partner is responsible for the entire debt, so if one partner is unable to afford the debt, creditors will look to the next partner and so on. Before going into this kind of business, drawing up a contract deeming who is liable for what is essential.
There is the option of setting up a Limited Liability Partnership (LLP). This type of formation can differ in law from state to state but is similar to a partnership. It does, however, offer more legal protection to partners if LLP becomes insolvent, hence limited liability. An LLP is essentially a cross between a partnership and a limited liability company.
Remember, you can change structures down the line if you want to. If you are unsure what the best plan of action is, be sure to get legal advice specific to your situation.
Keith Steven of KSA Group Ltd has been rescuing and turning around businesses for over 20 years and has worked with insolvency firms, turnaround funds and venture capital investors. He is also author of the site www.companyrescue.co.uk. You can follow Keith on Google+.
In 2012, entrepreneur Mark Cuban wrote “12 Rules for Startups“ for Entrepreneur.com, contained valuable insight and some entertaining ideas from Mr. Cuban. The article shared some snackable ideas to the startups to roll out with large profits and tag their business as ‘successful’.
Keeping the same spirit, this post is going to narrate 12 additional rules of thumb for startups to follow in 2014 – for both those launching new businesses and those associated with these startups. It’s been a two year leap since Mr. Cuban wrote his article and while the market and tactics have changed quite a bit, startups in 2014 still have plenty of exciting things to look forward to.
Rule 1: Grow Your Passion
Startups are diligent, and have to build a problem-solving attitude since the launch of business. Startup strategy must consist of moving two steps forward and one step backward. However, it’s critical that all start-ups include plenty of passion as it’s important for entrepreneurs to deal with business upheavals.
Rule 2: Never Give Up
As startups grow and experience challenging times, they need an attitude in place that tells them to never give up! Overall persistence in business works to help startup owners grow a strong survival strategy in the long run.
Are you a potential entrepreneur considering venturing into starting up your own business? If so, it’s important that you start familiarizing yourself with information on how to succeed in the current business climate right now. Operating a small business requires you to possess the necessary skills to plan and manage the business efficiently and a vision that seeks to grow from nothing to something substantial after a period of time. Here are the top 5 things an entrepreneur needs to know before starting up a small business.
1. A perfect business plan is indispensable.
A business plan is the foundation of any successful company today. It serves to chart out the goals of the business as well as the possible ways of achieving them and acts as a blueprint that outlines the road to the future of any business. It’s also a necessity when seeking financial help to set up your business, hiring future employees, and keeping track on how you run your business once it’s operational.