Friday, July 10, 2009

Who Am I? What Am I? The Dorothy You're Not in
Kansas Anymore Syndrome

Starting your own business can be overwhelming. Between figuring out your niche objective, funding, location and a host of other considerations, we sometimes can find ourselves unable to determine exactly what type of business entity we should be designating our business to.

The first step to starting a business is to know you want to start one. Give yourself a great big round of applause for embracing entrepreneurship and if all goes well independent and generational wealth. The second most valuable consideration is securing the domain name for your business. Once the idea comes into mind and you've decided on a name, I suggest you quickly go online to one of the common domain registrations (i.e. Go Daddy) and secure the domain name. Many may wonder why this is important, chances are 9 out of 10 times your website will be your storefront of any magnitude. A business today without a website can basically consider itself non-existent. Even if your website is just 2 pages, the mere fact that you have an online presence will garner more positive results than negative. The next issue you definitely need to tackle is the designation of a business entity. A business entity refers to the structured way your business will be organized. Will you be a sole proprietor, a corporation, a limited liability partnership, etc. The designation of a business entity is very important as it will determine your tax structure, liability and the degree of flexibility in which you can operate your business.

Listed below are the four common legally recognized business entities:

  • Sole Proprietorship - A business owned and managed by one person or for tax purposes a married couple. Business profits are reported and taxed on the owner's personal tax return. Sole proprietors can register their business name at the Registrar of Deeds within their local county. As a business owner depending on the type of business (i.e. product, services, etc.) you should check with your local laws in determining if any licenses or permits are needed.

Advantages of being a sole proprietor

Disadvantages of being a sole proprietor

Your business is owned and managed by you.

Personally responsible for all business debts.

Perfect if you want a structure that is simple and inexpensive without dealing with governmental filings and rules.

If sued your personal assets will be affected.

Losses can be reported on your personal income tax.

Profits can increase your tax bracket which may lead you to pay higher personal income tax.

  • Limited Liability Company (LLC) – This entity is a cross between sole proprietorship and a corporation. Similar to a sole proprietorship business owners are personally taxed on their business profits. However, once your business starts a generating a profit you can elect to be taxed by the IRS like a corporation. Unlike a sole proprietorship, owners are protected from personal liability, debts and claims. Meaning if your company is sued or bankrupt the only assets that can be attacked are the company's assets. Your personal assets will be untouched. Forming a LLC requires the creating and filing of Articles of Organization with the Secretary of State (many states have a fill-in-the-blank form which only takes a few minutes to prepare, be wary of solicitors who offer this offer at an outrageous charge). When operating as an LLC the management structure must be defined. Manager structure includes member-managed in which several partners manage the company and have pre-defined responsibilities which is often referred to as an Operating Agreement. LLCs can also elect to be manager-managed in which one or more owners are designated as decision makers while the rest of the partners sit back and share in the profits.

Advantages of being a LLC

Disadvantages of being a LLC

Ideal for protection of personal liability, meaning your personal assets cannot be touched.

If a suit is filed due to an employee error your business may not be protected.

Members want the option of reporting profit or loss on their own tax returns OR elect to be taxed like a corporation.

You will have to qualify for one or several exemptions from state and federal securities law if you partner with investors who will not participating the management of your company.

Easy filing with the state using the fill-in-blank form structure.

Some states charge a separate LLC entity level tax.

The primary advantage of an LLC is the ability to enjoy the benefits of a corporation while being able to retain the model of a small business.

  • Limited Liability Partnership (LLP) – A type of partnership that protects a partner from personal liability for negligent acts committed by other partners or employees not under his/her direct control. In some countries, and LLP must also have one general partner with unlimited liability. Unlike corporate shareholders, the partners have the right to directly manage the business, contrary to a corporation in which shareholders are required to elect a board of directors. An LLP also contains a different level of tax liability than a corporation.

Advantages of being a LLP

Disadvantages of being a LLP

Ideal for protection of personal liability, meaning your personal assets cannot be touched.

Not available in all states.

Ability to act like a corporation without the requirement of shareholders.

Strict IRS compliance.

Protection from suits caused by employees or negligent partners.

Many including myself have often wondered about the distinct differences between an LLC and LLP. The differences are all about asset protection. If a hospital was to operate as an LLC and a physician operated in a negligent manner, the hospital can be sued and its assets will be attacked. However, if the hospital is operating as an LLP and a doctor performs irresponsibly the hospital being a Limited Liability Partnership can actually protect its assets. The plaintiff has the ability to attack the assets of the physician usually through mal-practice insurance. If employing personnel while operating as a LLC you may want to consider the contract route as employment offering.

  • Corporation – The mother of all business entities. A corporation is a formal business that is created and regulated by state law. The person operating on behalf of the corporation is the "corporation" itself. Meaning the corporation can enter into legal binding contracts. For example, if Bank of America enters into a contract, you will not see the shareholders or executives listed but the actual name "Bank of America" as the person entering into the contract. Corporations similar too LLCs and LLPs enjoy limited liability whereas in the event of a law suit, debt, damages, etc. the corporation's assets will be affected and the owners/shareholders will not bear any debt responsibility. Due to the complex nature of corporations and their ability to issue stock options corporations have benefited by enjoying significant tax advantages.

Advantages of a Corporation

Disadvantages of a Corporation

Ideal for protection of personal liability, meaning your personal assets cannot be touched.

Complex tax structure.

The ability to generate investment revenue through stock options.

Requires the appointment of officers and board of directors who ultimately are responsible for resolutions.

Ability to convert ownership interests as shares of stock.

Owners must meet legal requirements for stock registration and paperwork which can be a tedious and often repetitive task.

Incorporating my result in higher overall taxes. Dividends paid to shareholders are not tax deductible from business income; therefore double taxation may be imposed.

Forming a business entity is one of the most complex and quite frankly one of the most naïve things we can do. Most sites have tons of legal jargon that is very hard to comprehend. An ideal way to figure out which business entity may suit you best is to conduct research. You can do this by going online to the Small Business Administration or even contact your local SCORE office. SCORE is a great resource in which former or existing entrepreneurs can provide you with a host of free legal advice. For tax laws and structures you may want to research IRS regulations. Lastly, go old school and visit your local library, it is amazing the amount of small business information that is available. Good luck in establishing a business entity; although the work can be arduous in the long run it will be well worth it!

Monday, May 25, 2009

Just Do It

Nikey hit it right on the money with their slogan "Just Do It".  I'm sure its meaning was pertained to athleticism and the ability to get up and just do your thang.  For me this slogan means much more than playing sports.  In my world Just Do It means do whatever "it" is and JUST DO IT!

When starting your businesses so many levels of self-doubt, procrastination, what ifs, I don't have the time, I don't have the money, etc. always seem to set in.  If we spent as much time creating our business as we do doubting ourselves, we would be Billionaires.  Sometimes in order to be successful and live your dream you HAVE to throw caution to the wind and JUST DO IT!

We all have some initiatives that we can personally say screw it and Just DO IT! Remember if you never DO IT, you'll never KNOW what potential you have and what you can BECOME! 

Here some examples of common procrastinations:

1)Where do I Start? - Do I form a Business Plan? Do I Register my Business Name? Where? How much does it cost? Are there licenses involved? Am I a product or a service? Write down the concept of your business and google the rest.  Stop asking yourself a 1000 questions and JUST DO IT!!!

2) Website - Do I create one? Do I use Go Daddy, Office Live? Do I search for external templates? Do I hire a designer? How many domain extensions should I choose? Do I secure a domain for 1 or 2 years? Guess what, JUST DO IT! Get on a site you feel comfortable with and start playing with it, if you don't like the results move on to another one.  If you do NOTHING, NOTHING will be done and asking yourself these questions over and over again does not constitute as doing something! It's just wasting time doing NOTHING!

3) I'm too busy with my 9-5 to even start my business, classic excuse!  One thing we need to remember is when the idea popped into our head to start a business the main basis for this idea was most of us were SICK with our 9-5.  Starting a business does mean hard work, but it also means independence and if we're lucky it could place us in a lucrative financial position.  Take a good look at your 9-5; how long have you been doing it?; are you efficient?; can you do this work in  your sleep?; does it bore you?; do you get up in the morning ecstatic about going to work?; are you smarter than your boss?  The answers alone are the main reasons why you want to start your own business.  Keep looking at the big picture! If you're efficient at work, do what you have to do, get your work done,* after-all it is paying your bills for now and financing your business.  But once your done with work and still on the premises, you should consider using the rest of your day wisely.  When I say wisely I mean on YOU!!  Stop going to Facebook (though I love Facebook :)) and My Space, googling celebrities and reading all the news that you have all day and night to see and hear about. Do you realize all the time we waste on simple internet BS; when we could be taking that time and working on our business!  A good strategy to use when you find yourself wasting time is think to yourself, the creators of Facebook and My Space are already rich, celebrities that's another world!  Just keep that in mind when you're googling what Brad and Angelina are doing in their summer home in Nice and know that you are wasting time and delaying your own summer home.  When free time opportunities at work exist, guess what, JUST DO IT!!

At the end of the day whatever "it" is that you do, you should always check your list and think twice like Santa, but at least you're doing IT!  

*Tip - Efficiency is one of the greatest traits we can have, however, it can play against us at times.  Your boss may recognize this efficiency and bombard you with work, be careful, pace yourself, you're not in a race.  Get your work done in its timely fashion and learn to stretch some things out.  I know to some this may sound tricky and deceitful and IT IS! But guess what the days before computers and our current days of fictions deadlines are reasons enough to just chill for a minute, the work ain't going anywhere.  Keep your eye on the prize.  Personally I rather have an Entrepreneur of the Year Award than an Employee of the Month Award, get my drift!

Friday, May 1, 2009

Mi Casa Es Su Casa....Oh really??

Once again its that time of the year when the task of spring cleaning comes upon us. We tend to gravitate with the cleaning of our closets, junk draws, regular draws and all other clutter we tend to collect throughout the cuddly winter season. Spring cleaning gives us an excuse to have a renewed sense of calmness and order. While most of the focus given to this seasonal chore is directed to mainly our households, we tend to forget other areas of living that we need to declutter as well. No, I'm not talking about the 2nd home, though I'm sure we all would like to have one and one day as we prosper in to Mogulette land we will :)! But for once let's be real about what many of us have considered our second home, WORK, THE JOB!!!

Yes, yes, ladies, while we may all grunt and say it's just a job, many of us have to admit we've treated the work place at least from a decorative perspective as our second home. Personal pictures, art work, a shoe collection, ya'll know who you are, acting like you have DSW up in there! The workplace for some of us has been transformed into an additional living quarter. I can understand the need for some personal items, afterall we're at work at least 8 hours of a day, five days a week, however, we must ask ourselves do we intend to be here for the rest of our lives? Is it necessary to fill up a space that really doesn't belong to you? Yep, I said it, It doesn't belong to you, your nice little cubicle or office with doors is NOT your office. This space belongs to the ____________ (you can fill in the blank) Company. Fact of the matter is you're decorating or better yet personalizing a place that doesn't belong to you and if doesn't belong to you guess what it can be easily taken from you!

One of the things this recession has taught many of us is that some things don't last forever. As waves of employees are laid off the most obvious attribute is the famous box they walk out with. Or if you work for a financial institution and some other places you can't even get to your box, you have to wait till they ship it and some may even deduct the shipping cost from your last paycheck. The truth of the matter is we SHOULDN'T even have a box. Why in the world do we make our job our second home?? When you look a the temporariness of it all, it's not necessary to permanently stake your claim. A job should be viewed as a hotel stay. You go in, do what you got to do and go home. None of this design challenge HGTV bull crap. Another reason why we should NEVER make a job our home is because adding all of these touches stifle us into moving forward. Think about all the devotion you apply to making this place of employment feel like home. In some sick way we can be unintentionally sending the signal that this is it for us, this is where we belong; if so then why are we complaining and why do we want our own business? For those of us who truly seek entrepreneurship we have to remember that one of the first steps to seeking success is commitment. We have to become committed and loyal to our endeavors. A job will pay the bills but your own business can take care of you and your family for life. Your loyalty should reside with your dreams not with your employer who can fire you whenever they feel fit.

Please don't get me wrong I'm not saying become a hostile employee. I'm just saying focus your energies on where you need them the most. Making your job your next home should not be one of them. I use to think I needed a picture of my daughter in my office, guess what I have a wallet and her picture is in there. I doubt 8 hours a day will make me forget what she looks like, if so I have bigger issues to contend with.

Ladies going forward let's be serious about who we are and where we want to go! The only design challenge you should be facing is designing and strategizing your business. Everything else in this realm is secondary. So please no more homes away from home, soon enough you'll have that real 2nd home away from home!!

Thursday, April 9, 2009

Design Challenge

Websites are crucial to the success of most businesses. The proliferation of Websites have dominated the success of at least 90% of businesses. In fact in the late 90s business who were slow to get on the website craze saw significant revenue loss. Websites have taken the place of most advertising and basically serve as a receptionist to your business. If your website is appealing and informative chances are you have earned a client. While websites are vital to the marketing of any business, it should also be considered a task that is not lightly taken.

Ions ago in the mid to late 90s Internet programmers were a rarity and once found were paid a pretty steep premium. Then came sites like, GoDaddy, Office Live, etc. in which website templates are offered almost free of charge. Although these templates may save a small business tons of money upfront there is the image problem of your website looking very similar to other sites. The other issue with templates is that they are limited and you will often find yourself not being able to tweak them to your liking. This frustration is time consuming which makes you think am I really saving money if I'm wasting my time on this??

When it comes to designing a Website here are few things to consider:

1. Hiring a designer - Unless you are a designer, graphic artist or a computer programmer who also designs then don't attempt this. There are issues with fonts, colors, backgrounds and placement that only a designer would be privy to know. It takes a real knack to design a website. It's not as simple as throwing some links together and voila. Remember your site is the receptionist to your business. You want to make a great impression!

2. Make Sure You're Not Getting Punked - Ashton Kutchner may be popular and all but Punked is not what you want to be when creating a website. Beware of designers who charge outrageous prices. We are no longer in the 90s and their craft is now pretty much generic. Be prepare to spend a $1000-$3000 on a site but depending on what you need, do not exceed those numbers. Designers are not writing code or actually creating colors. Most designers just borrow code from other sites. Basically you're paying to design but not for coding which they can get from anywhere. Don't let them fool and punk you into thinking they're working on your website from scratch!

3. Research other sites and find their designer - If you come across a site that looks good try to find out who created it. Chances are you can look in the web code if you click on View, Source and maybe find out the name of the designer. Also don't hesitate to call the company whose site you like. You never know they may get a bonus referral for recommending others. It doesn't hurt to try.

4. Consider the 8 Second Rule - A website should be appealing, it should immediately grasp the attention of a potential customer. Try to trim the fat when building a website. Ideally you don't need tons of colors, pictures, animation and a dissertation of what your business is about. Sleek, simple and inviting is most appealing.

Tuesday, March 24, 2009

Look at You and Your Fancy Business Place

Perception is key when attracting new clients. Something as simple as your stationery, business cards and business address indiscriminately causes a client to either negatively or positively ponder about your business stature.

Many of us who are first time business owners soon to be Moguls may not have the financial capital to secure that fancy business address. Trust me the Park Avenue address is not cheap. In fact for a first time business owner, location is most likely the highest expense you'll incur. With the advent of technology innovating every millisecond, the opportunity to work from home or from a coffee shop serves the same purpose as if you were working from Trump Towers. The only problem with this is appearance and Google Earth. Clients who recognize a home address may not take you as seriously as the Big Willy in Downtown where ever. And with Google Earth showing where you're really operating your business from, you may find the prospect of a rapidly declining business. Well don't fret my pets because help is on the way in the form of virtual offices.

Virtual offices have been around for quite some time. Basically a virtual office allows you to secure a temporary space in a well known predominantly (ie, Park Avenue) business district for a monthly fee. You can Google "virtual offices" and listing of sites will pop up. One of the most highly reputable of virtual offices is Regus Office Services. Regus offers full offices, conference rooms, mailing address, internet access, networking and even amenities like coffee, tea and snacks. The biggest perk of them all is that your clients can visit you at your preferred location and be greeted by a receptionist who will proudly represent your company. You can find additional information about Regus at

Friday, March 20, 2009

Using Logos to Define Your Business Presence

Logos are a necessity when it comes to standing out and defining your business. Just imagine where Target or as some of my friends would say "Tar'ghay" the french version :) would be without the Red Bulls eye. Anywhere you go in this country you'll know a Target store when you see one whether it be a regular Target or a Super Target you can spot it anywhere even without the actual spelling of the name. It's that red bulls eye that captures our attention and signifies we're in price reduction, great quality heaven! While Target can advertise wholeheartedly and open a multitude of stores what really drives the attention and keeps us coming is that infamous logo.

Most successful businesses have a presence that has been defined by a logo. Coca-Cola, Pepsi, Home Depot to name a few. Logos can be simple but yet profound in which they can easily attract a client. When considering a logo I would suggest unless you're a designer to perhaps find a graphic artist who's love is to design. We have a tendency to consider being computer literate as a pass to create anything using Publisher, Microsoft Word and the worst of all borrow from ClipArt. The issue with these is there are many other computer literates in this world and they too can tell authentic from "I just made it up." Since a logo is so important and can easily make or break you, it is very important that you take the time and seek one that will give your business that signature presence.

Hiring a designer can be taxing on a small business. Most designers require upfront costs and some may even limit the amount of mock-ups on a design. An effective way to secure a logo design is to do what big companies do and that's outsource your work. Sites like and Elance have a wide array of designers from all over the world. Prices for a logo usually range from $45 and up. You may be able to find one cheaper. I myself have used Guru for 3 different logos and have paid no more than $60. My experience with each designer has been positive. The payment methods are seamless and secure. Guru provides ratings on all their freelancers and at times depending on the freelancer you'll be able to read reviews, good or bad.

Remember capital is key when starting out your own business as well as defining its presence. Going bankrupt before it gets off the ground is definitely not a good sign. Logos are a sure fire way to get the attention your business deserves and therefore is a good investment, however, be cautious on how you do so and don't break the bank before you start depositing.