Posts

Facts About LLCs All Business Owners Should Know

/in /by

A Limited Liability Company or an LLC is a company structure that borrows some features from Corporations and others from Partnerships.

Similar to Corporations, LLCs provide you with a huge advantage in the form of limited liability protection. On the other hand, LLCs have a flow-through taxation structure, just like it is in Partnerships.

In a nutshell, LLCs can be considered hybrids.

If you are someone who is looking to form their own LLC, take a step back. First, consider the pros and cons of LLCs carefully.
What Are the Advantages of LLCs?

Let’s first check out the advantages of forming LLCs:

  • Forming LLCs is easy and also relatively inexpensive.
  • Because of the limited liability feature of LLCs, none of the members is liable to pay the debts of the LLC personally.
  • The members of the LLC can decide how they want the profits to be distributed.
  • You don’t need to maintain formal records of resolutions or meetings for LLCs.
  • LLCs do not have a double taxation system.

What Are the Disadvantages of LLCs?

While LLCs do offer a lot of advantages for small business owners, they do also have their own drawbacks.

Here are some of the disadvantages of LLCs:

  • Federal, as well as state-level filings, are required for all LLCs.
  • You need to pay state filing fees for the year when you form the company, and every year consequently.
  • An LLC isn’t the best structure for companies with investors who want to make their companies public.

Now that you have a balanced perspective on LLCs, you can make an informed decision. If you are still interested in forming your own LLC, here is what you need to do.

Steps to Form Your Own LLC

The first step to form your LLC is to apply for your LLC EIN (Employer Identification Number). Once you get it, you need to file Articles of Organization with the Secretary of State.

That’s not all.

In addition to this, you are also required to make an operating agreement for your LLC. This agreement should outline the financial as well as functional frameworks for your LLC.

It should also clearly define responsibilities and profit distribution between members. Although creating an operating agreement isn’t a requirement in all states, it is recommended that you make one.

Want to know more about forming LLCs? Check out the infographic below by GovDocFiling.

The Essentials Facts of LLCs You Need to Know as a Small Business Owner

Image Courtesy: GovDocFiling

About the Author

StrategyDriven Expert Contributor | Brett ShapiroBrett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.

Are You Ready to Start a Home-based Business?

/in /by

StrategyDriven Starting Your Business Article |Home-based Business|Are You Ready to Start a Home-based Business?Many people think about starting a business from home when they are passionate about something and/or have a talent. Working from home and being your own boss is an attractive prospect, but for most, it is certainly not an easy or quick way to make a living.

When deciding whether to start a home-based business, there are two key questions to ask yourself: are you ready to start a business, and are you in a position to run a business from home? The answer is not necessarily a simple yes or no, as there is a lot to consider. This article outlines the key points to examine before you make the decision.

Your personality and talents

We are all born with a predisposition for certain talents and traits, i.e. we are naturally better at some things than others. That is not to say that we cannot learn, diversify, and develop with experience, but often we have the greatest success in what comes naturally and what we enjoy.

Take some time to consider your talents and personality traits which could be assets when running a business, e.g. creativity, self-motivation, communication, resilience, discipline. You may decide that you are not well-suited to running a business and would be better suited to being employed but with more flexible hours/remote working options.

Your skills

While we are born with personality traits and talents, our skills are developed as we go along through experience and training. You might have design skills, organizational skills, writing skills, accounting skills, or people management skills, for example. You can gain and develop new skills as you run your business, but it is best to begin a business which complements what you already have.

Your talents, skills, experience, and interests should all come together to influence your choice of business. Starting a business in an industry in which you have no experience or knowledge is setting yourself up for an uphill battle, so capitalize on your assets. You should begin with a long list of possible ideas before whittling them down to just a handful of options which pique your interest.

Your home

Now that you have some ideas for a business, it is time to consider whether they are likely to function as a home-based business. There are several factors to consider including the location of your home, any local laws or licensing issues, how much space you will need, equipment, utilities, and living arrangements.

If you have a garage or spare room, you may be able to run a business, but if you are restricted on space or need a professional office where you can meet with clients, it may not be suited to a home business. However, if your business can be run from home with the exception of the occasional meeting or day in a professional office, you can make use of serviced offices Belfast as and when you need to.

Your income

Of course, the big question for anyone looking to start a new business is profitability. You may be exceptionally talented and/or skilled, but if people are not going to pay enough for the service or product, it is not a viable business. Can you make and sell enough units of the product to cover your running costs? You need to be sure that there is a market for your business and that you are offering something which other companies are not. Only businesses which can generate profit are worth investing your time and energy into.

How Can I Start My Own Business?

/in /by

StrategyDriven Starting Your Business Article |Start my own business|How Can I Start My Own Business?While many ideas for businesses never fully come to fruition, some entrepreneurs dream big enough to actually put pencil to paper. Though starting a business amidst the current pandemic might feel impossible, over 69% of American entrepreneurs begin their businesses right from the comfort of their own homes. If you’re wondering how to go about making your own entrepreneurial dreams a reality, consider the steps below on how you can start your own business even during these uncertain times.

Have a Concrete Idea

It’s no secret that many business ideas seem good in theory but become much more complex in practice. Whether your idea for your small business is one you have fleshed out on your own, or one you’ve developed with the help of family and friends, make sure it’s a solid one. A good rule of thumb is to start simple. For example, should your dream be to develop an entire clothing line, it’s probably in your best interest to begin with one category of garment at a time, such as blouses and shirts. Focussing your creative energy on one portion of your idea will likely save you money at the beginning of your business venture, and it will also keep you from feeling overwhelmed as you work to get your business off the ground.

Conduct the Proper Research

The nature of the business world is a competitive one and thus requires the right amount of research if you plan on entering it. Conducting market research along with taking the time to do a full competitive analysis as it pertains to your business is vital to the success of your company. As you do your research, use the questions below as your guide:

  • Is there a demand for the product or service your company offers?
  • Who is your target consumer?
  • What is the population size of the consumers you plan to market to?
  • Does your target audience live in your area or are they elsewhere?
  • What do you plan on charging for your product or service?
  • Who else already offers your product/service and what can you do to set yourself apart?

Though your research isn’t required to be limited to the questions above, answering them will give you a starting point for where you stand amongst your competitors and what you’ll have to do to stand out as a business. For more information on market research and competitive analysis, utilize this guide from the SBA.

Develop a Clear Business Plan

It’s important to note that having a business idea is vastly different from having a business plan. There are numerous online resources available that outline the proper steps for developing such a plan. Block out some time in the coming weeks to sit down and write. A simple Google search on how to write a business plan should suffice for the information you’ll need to get things started. If you plan on presenting your finished plan to investors, be sure to keep it concise and to know your audience. However, if you’re composing your plan simply to keep yourself on track, make sure you’re using the future as your guide. Have an emergency fund should things go south, and look for ways your business can adapt should the pandemic continue for longer than expected. Business plans are essential to the overall success of your company and are a perfect guide for you to stay on track and organized.

Know Your Funding Options

Once you have a plan in place for your company and you’ve done the proper research, the final piece to the puzzle is locking down your funding. While there are plenty of options to choose from, make sure you consider non-traditional funding methods such as:

Crowdfunding: As the name suggests, this funding alternative is all about who you know. If you’re a big networker, this may be a great option for you aside from a regular business loan. Take to your social media outlets or even create a GoFundMe page and get the word out. Though those who fund your business are not guaranteed a return, you can always offer them perks when you do get your business off the ground.

Home Equity Loans: While most individuals use home equity loans for affording a college education or for funding a home renovation, they can also be used to cover business expenses. The appeal of a home equity loan comes from it’s low interest rates, making them a stable option long term. If you are unfamiliar with how these loans work, use this home equity loan resource as your guide should you be interested in using one to fund your business.

Microfinancing: This option of funding was developed specifically for entrepreneurs who may not even have the option to go traditional with their funding. Microfinance organizations provide small loans in order to help entrepreneurs get their business off the ground in the beginning. Microfinancing is an option for those who want to achieve their dreams but have no collateral to do so. For more information on microfinancing, consider this article on: what is microfinance?

While traditional business loans are still an option, the unique choices listed above may be more viable funding alternatives during these uncertain times.

As you put the steps above into action, remember to stay focussed on your goals. Starting a business can be overwhelming and discouraging at times, so be sure to maintain a strict budget and use your business plan as your guide when you feel lost. With the right research, a clear plan, and the proper funding, any business dream can be made possible.

5 Tips to Help Streamline Your Business

/in /by

StrategyDriven, Business Management, Business Plan, Bussiness Software, cIt’s important for any business to ensure it’s making the most of its resources. Often, you don’t need to add anything to your company in order to improve its performance; you’ve just got to make better use of what you’ve already got, and this is where streamlining comes in.

Here are five tips to help you streamline your business.

Planning

There’s got to be a plan, and there have to be goals that everyone is aware of. If you don’t have these two things, then it’s difficult to know what direction your business is going in. The better your planning is, and the more people understand their individual goals, the more efficiently your business is likely to run.
Make sure you’re taking the time to invest in your business planning, and be open with your communication in conveying goals.

Finances

It’s much easier to do that planning and create realistic goals if you’re on top of your finances. You should know exactly where you are with your finances, and the best way to do this is to get the best bookkeeping services in Boston.

Not understanding how your finances stand is a perilous situation in business, but the more you know, the more you can streamline how you use that money.

Finances are clearly a vital aspect of any business, but too often, people don’t pay enough attention to them.

Hiring

It’s extremely difficult for your business to run efficiently if you’re not hiring the right people. A company can be a complex, interconnected entity, and if there are just a few pieces that aren’t working well, then it can cause problems for the whole system.

This means you’ve got to put care and attention into every hire and really make sure you’re focussing on the process of how your recruit.

When you need to make a quick hire, this can be very difficult, but so often it’s worth taking the extra time and making sure you get the right person.

Software

Even if you’ve got amazing employees throughout your business, they can’t do their job effectively if they don’t have the right tools.

Any business today needs to make sure they’ve got the right software. It can be expensive to invest in new software, but it can quickly earn that money back through streamlining processes. If you think about all the small inefficiencies you have across your business, then they can add up to a huge amount, and the right software can help in this area.

Culture

Culture plays a huge part in how well a business operates.

If there’s a negative culture where people end up doing the bare minimum, then it’s going to have a big impact. However, when you create the right culture where people can thrive, then you will find everything becomes much more streamlined.

Business culture isn’t something you can change overnight, but you can take active steps to create the kind of culture you would like. A positive atmosphere can make the world of difference, so it’s well worth investing in.

Measurement of Success in Business

/in /by

StrategyDriven Organizational Performance Measures Article |Measurement of Success|Measurement of Success in BusinessSuccess is a relative term and does not only mean different things for different people but also different things for different businesses. What makes success even more tricky to measure or define is that it also changes over time or circumstance. What could be a success today might be underperformance the next.

As an entrepreneur, the one thing that you want to see is growth, but that growth does not necessarily mean that the bank account is filling up nicely. So how does one go about measuring success in business?

Looking at the business’s financials

Obviously, business financials are a good indication of whether the business is successful or not. No business can survive without money and no business can grow with it either. But when looking at the money, one must focus on all three the major streams or trails of money, the income statement, the balance sheet and the cash flow statement.
The income statement shows you how much money the business made over a period. It indicates the profits and losses of the business and gives an indication of the measure of profitability during the specified time.

Most entrepreneurs who are new to the game will place a very high value on the income statement and can tend to forget about the balance sheet.

The balance sheet is one of the most important financial indicators seeing that it depicts the health of the venture. It measures how much you owe and how much you own. A successful entrepreneur will home in on the debt of the business and strategically align it with the income statement to pay off the debt as soon as possible while still making a profit.

The cash flow of the business shows the state of how liquid the cash in the business is. When there is a cash flow problem, it can cause some serious strain on the other two financial aspects and ultimately lower the success of the business.

As the management writer for write my essay service puts it, “being successful does not necessarily mean that the business is debt, free, but rather that the debt repayments can be made without constraining the cash flow.”

StrategyDriven Organizational Performance Measures eBook

Customer satisfaction signs

When a customer has a bad experience, they probably will not buy from your business or use your services again. As an entrepreneur, you will know how important customer satisfaction is. Not only does it indicate that the business is doing well, but it is also a reflection of your efforts.

There is a certain pride involved with customer satisfaction, especially if you have poured everything into your business. To get a bad review or to deliver bad service, is like a slap in the face and an attack on your character.

It sometimes happens that bad experiences go unnoticed and this is only because it was not picked up and dealt with. There are many tools available that will help the young entrepreneur to measure how satisfied the clients are.

Surveys and questionnaires are excellent tools that provide an in-depth quality check of your products or services. The review does not necessarily have to be bad to make improvements.

Reviews are very specific and when a bad review is received, it should be dealt with immediately. A bad review could be turned into something positive if the customer feels as though their concerns were heard.

These reviews could also be posted on the company website so that people can see that real people gave their opinions. When you see mostly good reviews and positive surveys, it is a good indication that the company is successful.

The new clients that come in

A successful business will show gradual growth over time. When a business is turning a profit, it generally means that it is good health and successful. However, when the profits stay stagnant, it means that the business is not growing. New customers are a much more reliable indicator of the success of a business.

When you know how many new customers you get, you can measure the success and projected growth of the company. On the other hand, when the same old customers keep you afloat, then it might be time to invest in a marketing strategy. Customers come and go, but if there is not a general influx of customers, they will only end up going.
To see if new customers are supporting you, draw up a client list with email addresses to see if your sales are limited to existing clients.

The statistics writer and researcher at the essay writing service says that once you have a client list and a system in place, you can measure how well your marketing strategies are doing. Every time you launch a new product or run a promotion, you can run averages on your customers and establish which strategy is the best for bringing in new clients.

StrategyDriven Organizational Performance Measures Article |Measurement of Success|Measurement of Success in BusinessIt is not just about the clients

A business can only sustain growth if the people who are doing the work are doing it well. As a young entrepreneur, you might not have too many people working for you, but as your business grows, so also will your list of employees.

One way to measure the success of the business is to see how well the staff are doing. When they are discontent, it could spill over into the quality of their work and threaten the customer experience.

Running performance reviews is an excellent way of finding out where the bad spots are. Many entrepreneurs fail to do performance reviews because they do not want to step on the toes of the employees. The thing is, if they are not made aware of the areas where they lack, they will never know how they can improve.

It also serves as a morale booster when there are performance bonuses on the line. Nothing puts a smile on the faces of employees like money in the bank.

Stay on top of market trends

A successful business is one that keeps with the times. Technology has changed everything in the world, and it continues to change every industry. When your business is successful, it does not mean that you can relax and keep on with the same recipe, expecting the same results.

Unfortunately, you need to keep up with the times and the best way to do this is to see what the competition is doing. If your business is aimed at service delivery and you do not apply the newest techniques, then you will start to see a decline in profits.

Look to yourself

There is a bit of subjectivity involved in measuring the success of a business, which is why you should measure what your business is doing against your own expectations. It does not matter how well it is doing on paper.
If it does not meet your expectations, the business could still be unsuccessful. You need to be content with the growth of the business and if you are not, then a new plan can be drawn up.

Conclusion

The success of any business depends on so many factors that it is hard to put it all into one category. The main thing to remember is to continuously evaluate the state of your business and track where things are going well and where there is a need. The more you tinker with the things you do not like, the more successful the business will become.

About the Author

StrategyDriven Expert Contributor | Tiffany HarperTiffany Harper is a freelance writer from New York. She loves to share her experience through blog posts. She began writing from the professional writer service for Write my essay and later for buy college papers. Please do not hesitate to contact her on twitter.