TSG
So You Want to Start a Business?

7 visual steps to guide you through the startup process

This infographic from Bolt effectively outlines what you will need to know to get your business up and running. Below are links for more information on each step.

'So you want start a business?' Infographic

Step 1: Write a Business Plan

Step 2: Choose a Business Location

Step 3: Finance your Business and Choose a Legal Structure

Step 4: Register your Business Name

Step 5: Get a Tax Identification Number and Register for State and Local Taxes

Step 6: Obtain a Business License and Permits

Step 7: Understand Employer Responsibilities

Create an Effective Online Presence

The environment of the web is continually changing, the weighted importance of real-time content, social integration and mobile compatibility rising significantly in the last few years. These changes are creating opportunities and challenges for companies and organizations of all scales and experience depending on adaptability and preparation.

Online Integration ImageYour online presence is created by the ongoing conversation between the website (your virtual storefront), fresh and relevant content, and your community (social media integration).

The first step is to lock down your brand, define your identity and stick to it. Create your website to reflect your company’s purpose and ideals, while keeping visual elements consistent. If you removed your logo, would visitors still recognize it as your brand?

The ease of use of your site for both the visitor and the content manager is one of the most important elements for online success. Establish a clear purpose and goals for the site’s foundation. Develop a strategy to encourage visitors to take action and draw out a sitemap to support your goal. Navigation and layout should be simple and intuitive, promoting the visitor to explore.

Create your site in a content management system that allows you to easily and comfortably update and add content. It is increasingly important that your site stay fresh and offer your audience a reason to return. This not only positions you as a knowledgeable resource, but also improves your position in search results.

The shift to mobile web browsing is expected to overcome traditional browsing in the next few years, making the effectiveness of your website heavily reliant on its ability to maintain functionality across devices. You should know your audience and what devices they use, but your site should ideally perform across all platforms. The recommended method is to create one responsive design layout, versus creating and updating multiple devise-specific sites.

Integrating media outlets will allow you to operate more effectively and efficiently, while stimulating real-time conversation in the community. Your involvement in the various social media platforms will vary depending on your business. Carefully select which of these will be the most effective in achieving your goals and commit to evolving your brand’s presence in each. Tools are readily available to integrate posts from one platform to another, saving you time and increasing exposure. Even with a wealth of content, only posting to your own site will most likely not create the following or involvement you desire.

In the era of the web, creating your presence online can be equally, if not more important than a brick-and-mortar establishment as many people start the purchasing process with research online. Integrating your brand’s vision with its website, relevant content, and community will establish your company as an authority in the industry and could be the deciding factor in whether or not you make the sale.

5 Rules for Your Cash Flow Plan

Critical to your success, cash flow.

Cash -> Purchases -> Inventories -> Sales -> Receivables -> CashCreate an effective plan for positive cash flow with five basic rules. Every business owner should have an understanding of his or her cash flow situation – sales minus expenses. Positive cash flow is critical to continuing business operations.

  1. Forecast realistic monthly sales. It is very important that you don’t optimistically estimate sales figures. Base these numbers around historical data or worse-case scenario figures. The estimates set should be easily attainable. This is necessary to ensure the business creates enough revenue to continue to operate.
  2. Plan for timing of receivables. Sales made with payment terms can take weeks or months to become available cash for operations, while cash and credit card sales are immediately accessible. Depending on your business, payment terms should be set and plans should be made so that operations will not be negatively impacted by this fluctuation in timing.
  3. Consolidate base operating expenses. Your business will have a set of predictable monthly operating expenses, often including rent, payroll, and utilities. These should be consolidated into one operating expense to be the baseline for the amount of cash that must come in to keep the business running.
  4. Keep cash available for growth. Businesses often fail because they can’t afford the capital necessary to support growth when the opportunity arises. Project the expenses that will be required when an increase in sales occurs. This could include equipment or additional employees. Cash from the new sales will unlikely be available before costs are incurred for expenses, so be sure to have this on hand.
  5. Recognize and plan for the known unknowns. Scenarios may develop for your company when cash is needed in order to capitalize on an unusual opportunity. Create a comprehensive list of possible unknowns and their associated expenses. Every cash flow forecast should include a contingency plan with funds to cover an unexpected situation.
Build an All-Star Startup Team

You have a great new business idea. As it forms into a plan, decisions will be made around how to support business functions necessary to succeed and if you should plan to assemble a team.

Start-up Team GraphicKnow what you have, determine what you need.

Create a clear outline of how the company will develop as an organization. Understand your goals and format them to support a strong mission and vision. What skill sets and abilities are necessary for your business to succeed? Of these, which will you not be able to fulfill? Gain a clear understanding of yourself, your competencies and shortcomings. As resources will most likely be initially limited, understanding which functions and abilities are the most critical will allow you to target and bring on a team member that will bring the most value to the business.

Once you have defined the position, it is time to look for the best candidate. At the startup level, traits including inventiveness, ambition, and autonomy should be heavily weighted. Look for people with experience in relevant fields, interest in startups, and an ability to perform across functions of the business. The ideal candidate will be driven to achieve the goals you have set and share passion for the success of the company.

Networking and becoming involved in the community – online or offline – are good places to start when looking for the right people to create your team. Your own social network is a valuable tool. Communicating an enthusiasm for your new business will often attract people with entrepreneurial drive.

It is important to build a team with personalities that complement each other. However, your first few additions should have skills different from your own with backgrounds crossing business functions. Your goal is to create a solid foundation for your business to grow.

What Obama’s “Startup America” Means for Your Small Business

We loved this visual breakdown from Intuit on what Obama’s “Startup America” means for small business.

What Obama’s “Startup America” Means for Your Small Business [INFOGRAPHIC]
via: What Obama’s “Startup America” Means for Your Small Business [INFOGRAPHIC]

6 Overlooked Tax Deductions for Small Businesses

We found out that startups and small businesses breath a bit easier this tax season if they utilize some often overlooked tax deductions. Take a look and see if any can apply to you - the more you can save today, provides more you can use for yuor business tomorrow. The top 6 deductions are laid out below, thanks to an article over at CBSNEWS:

  1. Health care tax credit. Businesses with 10 or fewer employees that average less than $25,000 annually are eligible for a tax credit of up to 35 percent.
  2. Depreciation on a business vehicle. Fuel and maintenance costs of your car or truck are 100 percent deductible if you can claim that the vehicle is used exclusive for your small business.
  3. Business travel expenses. You can claim all of the costs of out-of-town business travel — that includes the plane ticket, meals, and hotel room.
  4. Home office deduction. This is often considered a risky deduction due to its reputation as an audit magnet, but the reality is that virtually all small business owners can take a deduction for a home office space — that includes treating a percentage of Internet and phone bills as deductible expenses.
  5. Professional fees and classes. Any fees you pay to maintain your career are deductible. That includes costs for classes, seminars, training, certificates, and membership fees in professional organizations.
  6. Retirement tax credit. You can get a credit on the first $2,000 that you invest in your retirement fund.
4 Features of a Great Logo Design

Having a great business logo design is extremely important because even though our parents always taught us “don’t judge a book by its cover,” the inevitable truth is that we do. A great logo design will grab the attention of consumers, be memorable, and create an identity for your company. So how do you create that perfect logo? We read an article over at INC that depicted the 4 important characteristics of a great logo design.

  1. Make It Unique: Stand out against the crowd. Avoid overused symbols like globes and arrows and know your logo doesn’t have to depict your company to the tee. According to graphic designer David Airey, “The Mercedes logo isn’t a car. The Virgin Atlantic logo isn’t an aeroplane. The Apple logo isn’t a computer,”
  2. Make It Adaptable: make sure your logo can convey the same message small scale on a business card or letterhead but also on huge billboards. If it doesn’t, it could affect your brand’s clarity.
  3. Make It Appropriate: make your logo reflect your company’s essence while still being suitable for your industry. Look into colors too – different colors express different messages and evoke different feelings!
  4. Make It Timeless: make a logo that will still be relevant decades down the line. The quintessential example? The “I Love New York” logo from 1975

To read the full article, visit our friends at INC.

Learning all about Convertible Note Seed Financing

Techcrunch just began a 3-Part series addressing convertible note seed financing that we feel our readers would be very interested in. But wait, what’s convertible note seed financing??

According to their blog, “a convertible note is short-term debt that converts into equity.  In the context of a seed financing, the debt typically automatically converts into shares of preferred stock upon the closing of a Series A round of financing.” In layman’s terms, investors will give money to a startup but instead of getting money back, they get preferred stock in return.

The article we read is part 1 of the series and addresses basic questions like (i) what is a convertible note? (ii) why are convertible notes issued instead of shares of common or preferred stock? and (iii) what are the advantages of issuing convertible notes?

Part 2 will discuss the two most significant issues for founders in connection with the issuance of convertible notes: (i) the valuation cap and (ii) the discount (and how they interrelate).

Part 3 will cover certain special issues, such as (i) what happens if the startup is acquired prior to the note’s conversion to equity? (ii) what happens if the maturity date is reached prior to the note’s conversion to equity? and (iii) what securities laws do founders need to worry about in connection with the issuance of convertible notes?

Interested? Read the 3-part series at Techcrunch!

How Crowdfunding will affect Investors

Thursday afternoon, President Obama signed off the Jumpstart our Business Startups (JOBS) Act – not only will it be affecting startups, but it will affect investors as well. How so?

Remember when we talked about crowdsourcing a while back? Well the JOBS Act now officially recognizes the impact of a community investment and created some important rules and regulations to address certain needs and responsibilities. The bill is allowing the U.S. Securities and Exchange Commission 270 days to review crowdsourcing and deliver policies for the public. What do these 270 days mean to investors though? It means they may have to wait until 2013 to make a legal investment towards your startup.

Investors waiting until 2013 may have restrictions to the amount of money they can invest and may have to fill out more forms, including a suitability questionnaire which prepares you for the risks associated with crowdfunding investments.

To read more about how crowdsourcing will affect investors, read the full article at Mashable.

The 4 Ways you can Tax your LLC

Limited Liability Companies (LLC) are a growing trend in startup structure due to their personal liability protection without the bureaucratic red tape. But one big decision to make after choosing the LLC structure for your small business is to decide how your LLC will be taxed. There is flexibility with the LLC which is why it so appealing - all you have to do is choose was federal tax classification suits your company’s needs the best. Mashable wrote a great article on the 4 ways you can tax your LLC and we borrowed some snippets for you to take a look at.

1. Single-Member LLC as a ‘Disregarded Entity’ - “As the name implies, you need to be the sole owner of the LLC. This classification falls into the ‘pass-through’ taxation category’ — the business itself doesn’t file any tax forms. As the owner of the LLC, you report business income or loss on your personal tax forms.”

2. Multiple-Member LLC as a Partnership - “For federal tax purposes, if an LLC has two or more members, it will be taxed as a partnership unless it makes an election to be taxed as an S Corp or C Corp.”

3. LLC as a C Corporation - “If you prefer to keep profits in the company (as opposed to distributing any end-of-the-year profits to owners), a C Corporation would work. In this case, only the company is taxed on the profits; individual owners are not responsible for paying taxes on whatever money stays in the business.”

4. LLC as an S Corporation - “Individual LLC owners are taxed on their respective shares of the company’s profits (and profits are not subject to self-employment tax).”

Read the full article at Mashable.