Small business owners need to hone many skills to succeed and communicating well ranks near the top of the list. In last month’s post, we shared tips to write effectively. This time, we’ll focus on verbal communication, specifically on how to speak more confidently and comfortably in front of groups of people.
Whether crafting an email to a prospective client or delivering a workshop to peers at a chamber of commerce event, your prowess in communicating affects how others perceive you
If you’re like many small business owners, you started out as a “solopreneur”—a one-person bands who does it all. However, as your client lists and product or service offerings grow, there comes a point where you can’t do it alone.
Some signs that may indicate it’s time to expand your team include:
If any combination of the above sounds familiar, consider delegating some work. Whether you decide to add employees to your payroll or work with independent contractors, by making others a part of your team you’ll be able to focus on what you do best and ensure other responsibilities don’t go undone.
So, should you hire employees or outsource work to independent contractors? Both have their advantages and potential disadvantages.
To make sure you make the right choice for your business, consider the type of work you need help with, the amount of work you need to delegate, whether the work is recurring or sporadic, how much control over the work process you’re comfortable with, and the legal and financial impact your choice will have on your business.
A SCORE mentor can serve as a valuable sounding board and source of insight as you begin working through all of that. Contact us today to schedule free counseling from our volunteer mentors who have knowledge and experience in all aspects of starting and running a small business.
If you think logos are only important for big brands, think again. Logos provide big branding benefits for small businesses. How will a logo help your business?
Unless you’re a graphic designer by trade, chances are you personally don’t have the creative chops to design your own logo, so you’ll need to outsource that work. You might seek the help of a marketing firm, independent designer, or an online service like 99designs. We used 99designs to get a custom logo designed for FocusME, game changing support for women entrepreneurs. We were very pleased with the results and the cost!
Regardless of whom you hire to design your logo, keep the following things in mind as you collaborate with them:
Realize that before you ask someone to design your logo, you must first understand what your brand stands for. Think about your company’s core values and the traits and characteristics that define it. Communicating what you’re looking to convey through your logo is the first step in having one designed that will effectively and accurately represent your company.
If you’re thinking about having a logo created for your business and want help zeroing in on what it needs to project, contact SCORE Maine. With mentors who specialize in marketing and branding, we have volunteers who can provide you with expert guidance and feedback.
Choosing the right legal structure for your business is one of the most important decisions you’ll make. It affects how your company is taxed as well as the level of liability protection.
When you are the sole owner of your business and don’t elect a specific formal business structure, you will by default be a sole proprietor. Many home businesses operate this way. As a sole proprietor, you as an individual are your business. From an income tax standpoint, your business profits and losses flow through to your personal income tax return. One potential downside of a sole proprietorship is the lack of liability protection it provides. If someone sues your business and your company doesn’t have funds to pay the legal fees or creditors, your personal assets are at risk. The upside to operating as a sole proprietor? Simplicity and cost effectiveness. Aside from needing to file a DBA (Doing Business As) if you’re using a fictitious name for your business and securing a business license (if required for your type of business), you avoid the formation paperwork, costs, and ongoing compliance that come with other legal structures.
When your business has multiple owners and the owners don’t elect a specific formal business structure, the business will by default be classified as a general partnership. As with a sole proprietorship, a general partnership’s profits and losses flow through to the owners’ personal income tax returns. And as with sole proprietorship, owners’ personal assets are not protected from legal action brought against the business.
C Corporations operate as separate legal entities from their owners and offer limited liability protection to their shareholders, directors, officers, and employees. C Corps are subject to two levels of taxation: one at the corporate level and another at the shareholder level. The C Corp structure offers the advantage of raising funds through sale of stock (either privately or through the public markets) to an unlimited number of shareholders. Delaware C Corps are the preferred entity of venture capitalists and other sophisticated investors. The startup costs are higher with a corporation and you can expect more compliance formality and less tax flexibility than with LLCs and S Corporations.
S Corp is not a type of corporation but a type of tax status available for eligible C Corps. S Corps are identical to all other corporations except for their tax status. S Corp taxation is popular for many small business owners because it offers one level of tax at the shareholder level and some relief from the self-employment tax burden of owners of LLCs that have not elected to be taxed as S Corps, sole proprietorships and partnerships. Only an owner’s reasonable wages/salaries are subject to self-employment (FICA) tax while profits distributions to the shareholders are not. Shareholders’ distributions are assessed tax at the shareholders’ individual income tax rates. Like C Corps, S Corps may raise capital though sale of stock to shareholders, although limitations apply.
This structure, which is available to businesses with one owner, provides the limited liability advantages of a corporation and the flexibility of a sole proprietorship. It reduces owner liability without the formation complexities and compliance requirements that come with corporate structures. Typically, taxes are handled as for sole proprietorships (pass-through taxation to personal income tax returns) or you can opt for C Corporation or S Corporation tax treatment. With “LLC” at the end of a business name, customers might perceive a company as more credible than a sole proprietorship.
When a limited liability company has multiple owners, it’s classified as a multi-member LLC. By default, a multi-member LLC is taxed as a partnership, but owners can instead elect for their business to receive S or C Corporation tax treatment.
According to attorney and SCORE mentor Chris Dargie, entrepreneurs should begin the process of determining the best legal structure by considering three core questions:
Pitfalls To Avoid
While it is possible to change a business’s entity type at any time, doing so midstream can involve expensive tax consequences. Therefore, tax is a crucial consideration when selecting an entity.
The most common mistake Dargie sees with small businesses is the failure of sole proprietorships to convert to at least LLCs for liability protection. “There is rarely a reason for a single-owner business to operate as a sole proprietorship,” said Dargie. “Single-member LLCs are simple and cheap to form and maintain, and they offer liability protection for the owner at a cost that is much cheaper than commercial insurance. They’re really a no-brainer.”
Another common mistake Dargie sees is multi-member LLCs that lack basic operating agreements. “Most entrepreneurs understand that an entity offering limited liability protection to the owners is desirable, and the default entity type these days is the LLC,” explained Dargie. “However, LLCs with multiple owners present serious traps for the unwary. Anyone starting a business with others and intending to form an LLC should get some basic legal advice about the risks.”
Something else that Dargie has seen adversely affect business owners is when they’ve unknowingly created a general partnership. As an example, let’s say you’ve started a cleaning company and asked a friend to help you clean a few homes. Rather than putting your friend on payroll and compensating via an hourly wage, you instead agree to share a portion of the profits you make on the jobs he helps you with. By doing so, you’ve potentially made him a partner, and you’re potentially legally obligated to follow the legal and accounting requirements of a partnership.
Other common mistakes Dargie sees include commingling personal funds with business funds and the failure of companies to maintain adequate company records. “Owners should always treat their business entities as separate from themselves. Failure to do that can result in loss of liability protection and serious tax headaches,” shared Dargie.
Final Notes
With so much affected by the legal structure you choose, you need to do your homework and be as informed as possible. Be sure to consult with both legal and accounting professionals so you’re fully aware of how each structure will impact your taxes, liability risks, and ongoing compliance obligations. As you’re working through the process, remember that our SCORE mentors are here as a resource to direct you to trusted and reputable professionals in your area who can guide you in making this important decision.
Chris Dargie is a full-time attorney / director / shareholder at Perkins Thompson in Portland, Maine. He started volunteering with SCORE in January of 2014.
Please note that this article is for informational purposes only and should not be considered a substitute for professional legal or accounting advice.
Before your business starts selling its products and services, you may need to have certain licenses or permits to legally operate. Licenses and permits are often for the protection of customers. Some are to identify you and your business for the collection of sales, local, income and other taxes. Federal, state, or local licensing and/or permit requirements might apply, depending on the type of business and where you’re located.
You definitely don’t want to find yourself not in compliance with the regulations. If you fail to maintain the required licenses or permits, you could face some hefty fines and penalties, or you might be forced to stopped doing business.
Where do you start your research to figure out if your business needs to have licenses or permits?
You can start by visiting the Small Business Administration’s website. On the site, you’ll find information about the federal licenses and permits required of businesses operating in certain industries, including transportation, agriculture and alcoholic beverages.
The SBA website also provides an online list of links to where you can find specific information about business licenses required in your state. On that list, you’ll find Maine.gov’s website, which walks you through how to get a business license in the state of Maine.
Individual towns, cities, townships and counties have their own requirements. Generally, the best way to find what applies to you is to contact the offices directly or review the information on their websites (be sure to confirm with them that the information is up to date). Throughout Maine, general licenses to operate businesses are handled at the local town or city level. For information for the city of Portland, click here.
As you research and complete the paperwork to obtain the licenses and permits you need, make sure you give yourself some time—and expect to exercise some patience. The registration process could take days or months or longer, depending on the nature of what you’ll need. For example, to gain zoning clearances, it might take up to a year if you meet resistance and hearings are required.
Although figuring out what requirements will apply to your business may seem daunting, remember professionals and resources are available to help. Consider consulting with an attorney to make sure you know what you need to do to be compliant. SCORE mentors are here to help you cut through the confusion. Contact us today to schedule an appointment with a mentor who is knowledgeable about your industry and can help you move your business forward.
As a small business owner, strong leadership skills make or break your company’s chance of success. Without them, you risk missing your goals and not gaining the cooperation you need from employees and project partners.
Not everyone is a born leader but with some effort, you can develop essential and improve upon essential leadership skills.
As important as it is to share your guidance and thoughts, listening to what others have to say is equally—if not more—important. Your customers and the people who work with you have valuable insight that can help you make decisions that can improve your business. Want to learn how to be a better listener? Forbes has some helpful tips for strengthening your listening skills.
The importance of expressing your goals, guidance, and vision clearly and professionally should never be underestimated—whether through email, phone, face-to-face interactions, or in presentations. Improving communication skills requires a multi-focused effort involving attention to: organizing your thoughts, keeping emotions in check, refining grammar and spelling, and more. This list of 17 tips offers ways you can give your communications skills a boost.
Without a grasp on how to effectively manage your time, critical tasks and responsibilities can fall through the cracks. The keys to time management are being organized and knowing how to prioritize your to-do’s. Although there’s no one-size-fits-all solution for managing time, these six tips provide a good foundation upon which to improve your ability to make the most of your time.
Even if you’re a solopreneur, you can’t always do everything on your own. Whether you have employees or opt to use subcontractors, there will be tasks and responsibilities that should be done by someone other than yourself, so you have time to focus on critical business-building objectives.
While this Harvard Business Review article addresses delegation from the perspective of larger companies, it provides many takeaways that small business owners can consider for improving their delegation skills.
Leading also requires maintaining enthusiasm and embodying the drive to accomplish what needs to be done. When you’re the boss, you’re responsible for motivating yourself and staying on track. Contributing editor Geoffrey James at Inc.com has shared an interesting perspective and helpful tips to help entrepreneurs strengthen self-motivation skills. This thought from his article might help motivate you to become more self-motivated: “Use self-motivation to make yourself successful at life rather than just at work.”
Don’t believe “leaders are born not made.” While leadership is easier for some small business owners than others, you can get better at it with effort and practice. If you need guidance on ways to become a stronger leader, contact us about talking with a SCORE mentor. Our volunteers have a wealth of knowledge about all aspects of starting and growing a business.
For businesses serving their local communities, ranking near the top of Google search results provides a key marketing edge. According to Google research into local search behavior, 4 in 5 consumers use search engines via mobile devices and computers to find local information such as store addresses, business hours, product availability, and directions. People choose from the first few search results rather than dig deeper in the search engine results page (SERP), so it is vital to get your business near the top of the searches.
Here’s a checklist of simple steps to help ensure your company doesn’t get lost in the local search shuffle:
When you sell your products and services to a customer base that’s primarily local, these small efforts can make a big difference in your success in securing business through online searches. If you need guidance in getting on the right path with your online and other marketing efforts, remember that our SCORE mentors bring a broad spectrum of expertise and experience to small business owners in all industries. Contact us about our free mentoring services.
Succeeding in small business requires constant attention to detail and a willingness to adapt along the way. With a new year upon us, what better time to aspire to make your small business more profitable than ever before?
How can you get there? Here are six steps to put you on the right path.
Specifically consider replacing manual processes that consume a lot of time with solutions that can automate them and that integrate with the systems your business uses. Accounting, sales, marketing, etc…where can you find efficiencies?
Go line by line on your expense report and ask yourself what’s necessary and what is not. What’s driving up your business costs but not giving you a return on your dollars? Be honest, and consider kicking “nice to have” but unnecessary expenses to the curb in the New Year.
If you’ve grandfathered clients into rates from years gone by, it may be time for an increase. If you decide to raise your rates, make sure you’re providing enough advance notice to your clients (review the contracts you have in place!) and provide an explanation as to why you’re increasing pricing. And of course, thank them for their understanding and for the continued opportunity to work with them.
As the year begins and moves forward, question yourself and those you work with (employees, vendors, project partners, etc.) when things aren’t progressing as you had hoped. Are your expectations too high? Do team members have too much on their plates? Are those involved not pulling their own weight? Do your products and services need improvement? These are tough questions that need to be asked and answered honestly for you to gain an understanding of what you can do better to improve your business results.
After figuring out what changes could benefit your business’s bottom line, you’ll need to make a plan and follow through on executing it. Write it down, breaking it down into clear, actionable steps and tasks. Then, share those action items with those you’ll depend on to help you succeed.
As the owner of your business, change starts with you. Take responsibility and set a positive example for others to follow. By demonstrating enthusiasm and dependability, you’ll facilitate a company atmosphere that has a firm foundation of cooperation and accountability.
If you need guidance in making 2016 the best year yet for your small business, contact us at Portland Maine SCORE. Our certified mentors are knowledgeable about all aspects involved in starting and running a business.
While email is critical to your business, your inbox can easily become a constant distraction preventing you from getting other tasks accomplished if you’re not managing it well. Here are some ways to take control of your email so it doesn’t thwart your productivity:
