Operating agreements are one of the most vital, and overlooked, tools in running a limited liability company. We’ve actually covered operating agreements as part of our ‘ABCs of MyCorp’ series, but we never delved into what an operating agreement should actually say. As a quick refresher, an operating agreement is essentially a document that defines how the LLC will be run, and the SBA recommends that every LLC draft one. The trouble is that only a couple of states, like Missouri and New York, legally require new LLCs to have an operating agreement. But without the rules, structure, and regulations an operating agreement provides, your LLC could be in serious trouble if partners disagree, a member wants to leave, or if the state starts questioning the validity of your LLC. Operating agreements are also pretty easy to draft and only need to cover a few key areas.
This week we are looking at Texas – the Lone Star State. As the saying goes, everything is bigger in Texas. The state has successfully accommodated changes in the economy and US consumption – though it was originally a cattle state, oil rich land and a strong infrastructure has turned the cowboy state into one of the economically diverse states in the USA. In their Best States for Business survey, Forbes ranked Texas at #7 with the state’s economic climate in first place and most analysts also expect Texas to see some serious growth in the next few years. If you’ve ever wanted to start a business, Texas is a great place to do it. But how hard is it to start a business, form an LLC, or incorporate in Texas?
What do you need to start a business in Texas?
Surprisingly little! Some states require sole proprietorships, which are the simplest type of business entity, to register before they do business. All Texas requires is that the sole-proprietorship’s owner file an ‘Assumed Name Certificate,’ also known as a ‘Doing Business As’ name, with the County Clerk. Depending on where you plan on doing business, and what sort of business you run, you may also need to file for a business license – the Small Business Administration has a handy tool to help new business owners figure out exactly what they need on that front!
Who’s the boss? You’re the boss! One of the best things about entrepreneurship is that you can start your own business at any age – after all, age is nothing but a number when it comes to pursuing your passions and dreams. Today, we have a panel of 10 teen entrepreneurs (and even a few kidpreneurs on deck!) to tell us about their experience getting their start-up running and what they love best about being an entrepreneur.
1) “The best part of being a teen entrepreneur is the ability to inspire other youth to follow their dreams. Due to my success in business, I’m invited to speak at many major conferences for both youths and adults. I recently spoke at the Disney Dreamers Academy with Steve Harvey and Essence Magazine, where I spoke to 100 students teaching them to follow their dreams. I will also be speaking to Facebook Interns and Facebook University participants at the Facebook HQ in Menlo Park. My success is not simply for me, it’s a platform to inspire others to become success. It’s a platform to show that following your dreams has no age.”
- Jaylen Bledsoe, Chief Executive Officer & President, Bledsoe Technologies, LLC.
2) “I’m currently an 18-year old student at Cornell University. Last year, I founded Hype Up Your Day, Inc. My company sends motivational speakers and trainers in to businesses in order to improve employee morale and productivity. The best thing I like about being a teenage entrepreneur is the fact that every day is a learning curve. As teenagers, we barely have any experience in entrepreneurship. So, we get to learn something completely new every single day as we are going through the process for the first time!”
- Nihar Suthar, Founder, Hype Up Your Day
If you’re planning to start a business in the agriculture, manufacturing, or tourism industries, Tennessee might just be the place for you! You have the Great Smoky Mountains to thank for that – being one of the nation’s most visited national parks makes Tennessee a great spot for all things tourism. Companies including Ruby Tuesday, Saturn Corporation, and Eastman Chemical Company all call the state home to their headquarters as well.
Forbes has the state ranked at 15 out of their best states for business list, noted for its excellence in having a pro-business regulatory climate. Thumbtack.com also has Tennessee ranked with a positive B+. The state scored high in ease of starting a business, hiring and regulations, health and safety, employment, tax code, licensing, environmental, zoning, and networking. With grades like that, Tennessee passes with flying colors!
When my business partner and I started Guidant Financial back in 2003, we said we wanted to change the way people view retirement investing. Over a decade later, I believe we were a driving force behind the way self-directed IRA investing (or at least the marketplace) developed.
In August, we sold our real estate IRA (or more specifically, our self-directed IRA business unit) because our vision has changed drastically over the past five years. Up until that point we had helped thousands of entrepreneurs deploy billions into small business and franchising through rollovers for business startups, SBA loans and more. And, we want to double our efforts in small business so our broader vision has become to increase the number of entrepreneurs who succeed in small business. We’re approaching it in a number of ways:
- Our company culture. We’ve built a strong team of passionate employees who embrace the vision of helping entrepreneurs. So much so that some of them have even made the jump themselves. In fact, one of our former employees used our services to purchase an existing business and left his role in our company to pursue it. We were okay with that!
- Our presence in the alternative financing marketplace. We’re the leader in rollovers as business startups (ROBS) and undoubtedly the driving force behind the arrangements maturation. I liken it to HELOCs. In the ‘90s, people said “never risk your home to buy a business,” and then it became one of the most common ways people bought them. We brought ROBS to the masses and look at what we’ve done! Over 8500 clients have used our services, $3 billion in retirement funds have been invested and 60,000 U.S. jobs have been created by the businesses our clients have started.
- Our additional financing services. There are many ways to finance a small business and we work with entrepreneurs to determine how and where they can access the capital they need. Our programs include, but are not limited to, SBA loans, unsecured credit, rollovers for business startups, merchant cash advances, equipment leasing, and asset-based loans.
- Our ability and desire to expand. Really, we’re just getting started. As the leader of retirement fund financing, we’ve grown (and will continue to) into a full suite firm that offers more products and services. Put simply: We want to make entrepreneurs lives easier.
It’s exciting to start a business, full of ideas and dreams for what could be. It’s intoxicating to arrive at a place that far surpasses that vision, and realize that there is so much more to do.
David Nilssen is the CEO & Co-Founder of Guidant Financial. Read more tips about becoming a successful entrepreneur in his book, Making the Jump into Small Business Ownership. He can be found on Twitter at @DavidNilssen. The advice in this column should not be considered legal tax advice.
This week on 50 States of Incorporation, we take a look at ‘The Palmetto State,’ South Carolina! Also know as ‘The Rice State’ and ‘The Swamp State,’ South Carolina’s official nickname comes from the state tree, the Sabal Palmetto, which distinguished itself during the revolutionary war. It was a fort made of Palmetto logs that repulsed the British fleet from Sullivan’s Island back in 1776! But South Carolina has a lot more to offer than strategically useful flora. Though it was hit hard by the recession, its strong agricultural heritage, and the state’s friendly attitude towards business, has really boosted its recovery. So what should South Carolinian entrepreneurs know about their state? And what does it take to open up a business and incorporate in South Carolina?
Are there any benefits to running a business in South Carolina?
Plenty! South Carolina is actually one of the most business-friendly states in the USA. Thumbtack gave the state an A- in overall friendliness, and South Carolina has the tenth lowest tax burden of all states. It also makes sense to incorporate in South Carolina as the state boasts a low, 5% flat corporate income tax rate. Of course, South Carolina does all it can to help small businesses within the state. The South Carolinian Secretary of State’s office maintains a Small Business One-Stop Site to help new entrepreneurs find and file for everything they need to get their business up and running, and the Department of Commerce is proud to offer multiple growth incentives to businesses with the state.
We’re heading on over to the Ocean State for today’s 50 States segment to find out how to incorporate in Rhode Island!
Rhode Island is the smallest state in the United States, and even then, this tiny state is about 14% water due to all of its bays and inlets. Despite its petite size, RI is still one of the most densely populated of the 50 states. That means lots of small business owners, especially when it comes to the healthcare and tourism industries the state is known for.
For years, MyCorporation has been honored to help thousands of new entrepreneurs to get their new small business started on the right foot by incorporating or forming an LLC. But business maintenance doesn’t end when the articles of incorporation are filed! There are actually a few more steps to ensuring your new entity is compliant and ready for business. In order to help educate new business owners, and answer one of our most commonly asked questions, we are happy to reveal our new video, “What happens after you incorporate or form an LLC?”
Step 1. Apply for an Employer Identification Number. An EIN is going to be needed if you want to open a business bank account, or if you want to hire employees.
Step 3. Look into what business licenses you have to apply for. Licensing varies depending on locality, entity, and industry, so it is a good idea to consult with a professional who can help you figure out exactly what you need.
Step 4. Remember to stay on top of annual maintenance. Most states will require business entities to file an annual report, which will have some basic information on your business like its name, address, registered agent, and industry. You also have to document any changes to the corporation or LLC. If you bring on new owners, or new investors, make sure to make note of it. You should also update your operating agreement or bylaws as new owners and investors will probably want a say in how the company is run.
Step 5. Thinking about expanding outside of your home state? Well, remember that you have to apply for permission to do business in any new state. If you don’t, you could be looking at hefty fines and dissolution of your business in that state. So don’t forget to file to qualify as a foreign entity in any state you plan to expand into.
Have any questions about corporate or LLC maintenance? Need help figuring out what you need to file? Just give MyCorporation a call at 1-877-692-6772 and we will be happy to help you out!
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.
Thinking of starting a small business? You’re certainly not alone. Small businesses are on the rise in America; according to the U.S. Small Business Administration, the number of small businesses has increased by almost 50% since 1982!
However, despite the surge in popularity over recent years, starting a small business can still be a daunting challenge to the entrepreneurial-minded individual. With lots of initial hurdles to overcome, many small businesses fold within the first year.
But there’s still plenty of hope! By maximizing revenue while minimizing overhead in those early years, many small business owners can set themselves on a solid foundation for success from the start. Do you need the biggest and best equipment on Day 1? How much space do you need for your workforce? Can you live without that can’t-live-without software for a few months? Putting together a plan that accounts for immediate, short-term, and long-term needs is essential, especially when it comes to finding an office.
While it can be tempting to sign on the dotted line for a new workspace immediately, there are tips that every small business owner should take into account to increase your survival rate right off the bat. Here are the top 3 ways to make the most of an office space on a budget.