Tag Small Business

Stick to your core strengths

Small businesses that experience success and growth need to abandon the mantra of doing it all.  But far to often, they take on ancillary activities that distract from the core strengths that made them successful.  They find themselves mired in back office processes and either work 16 hour days or the business start to slip.  Success is a great thing, it is after all the point of our business, but success is a very poor teacher.  “I’m a Doctor for goodness sake, I should be able to run my business!” Replace Doctor with any other profession and you have the mindset that get many business owners in trouble.  My advice is stick to your core strengths and outsource the rest. If you want faster expansion for your growing business, click here to learn more about Asset Finance companies..

Don’t get nervous, you don’t have to abandon your patriotism or defy your union brothers.  What I’m talking about is hiring business specialists to perform the tasks that they are specially trained in and you are not.  These can and should be local businesses many of which are also small businesses.  Why have a receptionist turned bookkeeper doing the CFO job when you can hire a CFO on-demand for the two weeks per year that you need them.  Your bookkeeper and bottom line will thank you.  Financial, Marketing, Human Resources, Employee Training and even Sales are areas that can and should be outsourced.  The main benefit for small business owners is the ability to focus on the core business.  The cost of being distracted (sleepless nights, missed deadlines and limited resources) is enough to make the difference in profit and loss.  So now,

get more sleep, make more money and outsource everything that is not your core business.

Starting a Michigan Business Series: Financing

Access to capital is one of the key fundamental needs for a business to thrive and grow.  Capital can give business longevity.  We discussed this in a previous post regarding cash flow in your business.

We know it’s important.  We desperately seek it.  The trouble comes in sorting through all the junk on the interwebs to get to the helpful information.  Outside of factoring invoices, guaranteed loan scams, faxed “we get you cash” pages, when the bank says no, where do small business owners and entrepreneurs turn to for capital? Learn more about business handling by checking this checkstub generator review.

Fortunately there are a number of organizations in Michigan dedicated to assisting business owners in securing capital for their business.  We’ll get to that shortly.  Before you consider going after capital have you put together a solid business plan for your business?   You’ll need it, while if you already have a business and you’re producing company voluntary arrangements but is rejected there are resources that help with this at https://business-insolvency-company.co.uk/what-happens-if-my-cva-is-rejected/.

If you’re an existing business putting together a business plan for the first time, Talan can help you identify areas within your business that need shoring up through our BIZ Strength profile, and it’s FREE.

Back to the previously scheduled blog post….

Besides your friends and family there are some amazing resources for finding capital in the state of Michigan.  Listed in no particular order:

MCPED Business Development

In Macomb County, their staff offers up options to legitimate financing alternatives if a bank doesn’t work.

MEDC

The Michigan Economic Development Corporation has access to state funds, federal funds, as well as many other alternatives for your business

Alliance for Business Growth

The objective of the Alliance is to encourage entrepreneurship and assist small business owners throughout Livingston County by providing FREE or low-cost assistance.

State Administered Grants

Yes.  You can get grants for your Michigan business.  You however need to do the research.  Isn’t it nice to learn something new?

GLCEDC Loan Program

Livingston County offers a Commercial Revolving Loan Program through the GLCEDC.

Michigan Seed, Angel, and Venture Capital

Sometimes you need an angel to come along.  If your business idea is good enough this may be the route to go.

At Talan we believe in helping you find success in your business.  We are passionate about small business and the people who run them.  If you ever find your self in need of assistance, please don’t hesitate to reach out.  While the list gets you started, it is not a comprehensive list.  We like to be interactive…so if you happen to know of other creative financing options (legitimate), add them to the comment section.

Until next time.

Customer Service and Business: You’re Out of Touch

Sometimes the power of social media makes you go “wow”.   It can be an amazing asset or your worst nightmare as realized recently by Netflix announcing their price increase.

In a nutshell, Netflix adjusted their price structure and raised prices by 60%.  They took something that consumers perceived as value and just like that gave them reason to question the expenditure.

Looking at the Netflix Facebook Page there are over 78,000 comments related to the announcement.

 

 

 

 

 

 

Many of the comments share the same sentiment.  Customers simply aren’t pleased with the increase.  Part of it could be the way the announcement was presented on Facebook.  The status update doesn’t offer much in the way of explanation, but links to a blog post on Netflix explaining the price increase.   The blog post alone has 12,000 comments with over 4,000 shares on Twitter.

Talk about social media working on all cylinders.  Unfortunately in this case it’s not the right kind of buzz.  They didn’t do themselves any favors either as Netflix was deleting customer complaints from Facebook.

What are the glaring issues here?

In this situation it’s clear that Netflix wasn’t in touch with customer expectations and over valued their product/service.  The customers have stated as much:

 

 

 

 

 

 

 

 

Fix:  Do your homework.  Understand why your customers appreciate your product/service.  Spend time answering the “what if” by surveying some of your best customers before making changes.

They didn’t ease into the transaction and had to quickly backtrack by offering a discount to customers, further devaluing their product.   It was already too late.  Certainly they lost customers who will never come back.

Fix:  Give your customers time to adjust to the changes.  Making the switch quickly can backfire.

Price and value must go hand in hand. By not understanding the price point at which customers perceived the most value they again misunderstood the marketplace.

Fix:  This is an important aspect of any business.  Make sure that you know when and where price and value are in alignment.  If it’s not easy to find, figure out a way to create it.  That’s where marketing comes in handy.

Social media hasn’t helped, but it could have.  Netflix could have easily utilized social to address many of the issues above well before announcing the price increase.  They have 1.9 million fans on Facebook certainly they could have found a large enough sample size to survey.

Besides social media they could have reached out to customers via email by way of surveys.

From a business strategy standpoint it makes perfect sense.  Changes needed to be made, but when a strategic change backfires you’ve got major issues.

Part of what we do here at Talan is help small business navigate these sort of minefields.  We help business develop a strong strategy whether it be marketing, PR, exit strategies, or social media.

Understanding the risk associated with your decisions is an important part of being an entrepreneur.  Not doing so comes with enormous consequences.

If you found your company in this position how would you react?

 

Start a Michigan Business Series: Employee Identification Number

 

 

 

 

 

 

 

 

Often mistakenly called an Employee Identification Number, an EIN, or Employer Identification Number is also known as a your Federal Tax Identification Number according to this tax payment tips.  Similar to a social security number, an EIN is used to identify a business entity.

Do I Need an EIN?

If you have employees or operate a partnership or corporation you’ll need an Employer Identification Number.  If you answer yes to any of the other questions you’ll need one as well:

  • File employment, excise, or alcohol, tobacco and firearm taxes?
  • Withhold taxes on income, other than wages, paid to a non-resident alien?
  • Do you have Keogh plan?
  • Are you involved with the following types of organizations:  Trusts, IRAS, Estates, Non-Profits, Farmers Co-ops, Plan administrator?

Getting an EIN is a free service and you can apply online.

Your EIN will be a nine digit number assigned by the IRS.  It’s important to keep this number safe.

If you recently started a business that falls under the above listed categories, this is an important step to launching your business.  Be sure to follow all the steps listed on the IRS website to ensure timely processing.

Employer Identification Exempt Organizations

A tax exempt organization is non-profit org that is exempt from certain taxes as described under Section 501 of the IRS code.  If you think your exempt you’ll need to apply to the IRS for a determination letter that would grant you formal tax exemption, also known as 501(c)(3) status.

Avoiding Common EIN Problems

  • If you file as an S Corporation be sure to file Form 2553, Election by a Small Business Corporation
  • An association, LLC, or other org that elects to be taxed as a corporation must file Form 8832, Entity Classification Election
  • Remember to always include your SSN, EIN, or ITN on Line 7b or Form SS-4
  • Always use the full legal name you entered on Form SS-4, line 1 and the EIN given to you, consistently on all business tax returns
  • If you change your address after receiving your EIN, you must use Form 8822 to notify the IRS of the new address

 

6 Tips to Managing Cash Flow Schedule

Cash is king.  In your business cash flow is the ultimate king.  Do you have a firm grip on your cash flow?  Do you understand how cash flow affects your business?  Well you should.

The best way to monitor cash flow is by utilizing your cash flow statement.  If you use Quickbooks or Peachtree, this is a built in report.  A cash flow statement is a financial statement that shows how changes in a balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities.

Simply, it helps you understand the flow of cash in and out of your business.

The reason your cash flow is important is that:

  • it allows you to know if you can meet payroll and other expenditures
  • it tells potential lenders if you have the ability to repay
  • it lets potential investors know if your company is financially strong

Here are 5 ways to get your cash flow positive:

1.  Track customers’ payments

It’s easy to let 30 days turn into 45, especially if it’s one your best customers.  But there are bigger issues here, if you have to borrow money due to late payments you’re doing yourself a disservice.

2.  Set resonable payment terms

Don’t be afraid to offer a discount for early payments or a cash discount if it helps you get paid early.  Having cash in hand is key.  Offering a discount to get paid 15 days early can make a big difference in how you run your business.

3.  Check credit histories

Must do.  Don’t take their word for it.  Just because they have a big new building doesn’t mean they have the ability to pay or haven’t stuck someone else for services in the past.

4.  Take advantage of discounts

If you have the opportunity to receive a discount for paying early yourself, by all means take it.  But remember if there is no discount offered to hold on to your cash.  There is no sense in paying your bill two/three weeks early when you can use the cash (especially if you have a good handle on cash flow)

5.  Get Rid of excess inventory

It’s costing you money.  Even if you sell it at a discount it’s better than not selling it at all.  Plus it injects cash into the business.

6.  Wait

Do you really need that new iPhone/iPad/Tablet/Blackberry/Printer?  Think hard about it.  It’s easy to justify the expenditure, but will it really make you more efficient?  Purchases like these can nickel and dime you and kill cash flow in a hurry.

Understanding how to forecast cash flow will be a key asset in running your business.  If you need help reading or preparing cash flow projections contact us here at Talan Small Business Services.  It’s what we do.

Starting a Michigan Business: Michigan Business One Stop

 

 

 

 

 

 

In my talks with other aspiring business owners I’m always surprised by the lack of awareness of Michigan Business One Stop.  What is it?  It’s Michigan’s online portal with pretty much everything you need to get your business up and running.  All in one location.  Talk about a time saver.

Here are just some of the things you can do with Business One Stop:

  • Learn about Financing your Business
  • Tax Information
  • Play with the One Stop Simulator
  • Find Employer Resources
  • Business Entity Search
  • Keep track of filings

The Business Start Up Tool on One Stop is a great tool for creating varying scenarios for launching different types of business.  It will help you understand the state requirements for that business, including costs and time frames.  It’s really simple to use and leaves you with a wealth of knowledge for the onset.

The site includes a online secure service for starting your business.  Right online.  Register for taxes, apply for licenses and permits.

If you’re in the process of starting a business, Michigan Business One Stop is the place to go.

Have you used Michigan Business One Stop?

 

 

 

Starting a Michigan Business Series: Forming a Corporation

It’s Monday, which means only one thing.  Starting a Michigan Business time.  This week the focus is on Forming a Corporation, what you need know, where you need to go, and how to find the documents you need to get started.

First things first.

1.  Choose a name.

Have you settled on a name?  Make sure you name is not already taken by visiting  the Michigan Corporation Division Name Availability Search.

You’ll also need check the list of restricted words. These words are not allowed in your corporate name:  List of Restricted Words

2.  Determine if your business is subject to special licensing or permits.

No need for surprises.  You can check online here:  michigan.org/medc/services/license.  You may also want to check with your local county, city or township clerk for local requirements.

3.  File Paperwork with the State of Michigan

Be thorough when completing the paperwork.  Be sure to have the proper corporate form, filled out completely.  Forms are returned if not properly completed.

4.  Register for a federal Employer Identification Number (EIN)

You can apply for an EIN number by faxing your SS-4 (Application for Federal Employer Identification Number – EIN) to 859.669.5760 or calling 800.829.4933

5.  Register for Michigan Taxes

You’ll need to complete Michigan Taxes Form 518 and return to the Michigan Department of Treasury and fax to 517.636.4520

Corporation Advantages:

  • Shareholders (company owners) have personal limited liability
  • Access to capital is easier than with other structures
  • Profits can be divided between owners and the corporation which reduces taxes and offers lower tax rates
  • Perpetual existence. Upon death of an owner (stockholder) the corporation continues to exist
  • Tax benefits for employee fringe benefits such as medical, dental, and disability

Corporation Disadvantages:

  • Fees. It costs money to incorporate, plus recurring annual corporate fees
  • There are formalities that MUST be followed. There is no flexibility here
  • Profits paid to owners are subject to double taxation
  • Can be complex to set up and maintain
  • Dissolution does not automatically happen

A great resource for starting a business is Michigan Business One Stop.  It’s an online portal with access to FAQ’s and necessary documents for starting a business.

If you have questions you can call the DELEG (Department of Engery, Labor & Economic Growth, Bureau of Commercial Services, Corporation Division) at 517.241.6470.  Or visit online at michigan.gov/corporations

It’ never a bad idea to seek out the services of a lawyer and accountant when launching a new a business.  While these steps will get you on your way they should never be considered a replacement for legal advice.

Starting a Michigan Business Series: How to form a partnership

In our inaugural post for the Starting a Michigan Business Series we looked at the difference between a partnership and corporations.  This week we’ll focus on how to form a partnership.

Most partnerships are formed with little to no planning.  Two people get together, form a business, lost in the discussion of how cool and how fun.  It’s not until the honeymoon is over that the lack of ground rules or some semblance of structure comes back to haunt them.

Fortunately with some pre-launch planning, you can avoid the common pitfalls that have plagued many a business partnership for which they will also be using a PayStubCreator software.

First you and your partners need to sit down and ask some very pointed questions:

  1. Are you and your partners aligned in values, goals, and ideas?
  2. What will each partners role be in the business?
  3. How much financially will each partner contribute to the business?
  4. Will compensation be dictated based on contributions or other factors?
  5. What happens if a spouse wants to join the business
  6. What happens if a partner wants to leave the business

While it’s a mood killer for the excitement of starting a business with a friend or family member, hashing these details out will be much appreciated in the case of conflict.

Partnerships are fun and CAN work.  Each partner brings something unique to the table.  One may have the business contacts, another might handle the day to day operations, while another may handle sales and marketing.  Clearly outline expectations while establishing a routine for communications.  What will day to day communications look like? Quarterly?

Through the process you may realize that a partnership isn’t the right fit.  Issues during the discussion phase may indicate conflict once you work together.

Now lets get your business up and running.  You’ll need to download your forms HERE.  They will need to include the following:

  • Name of the limited liability partnership, which must contain the words “Limited
  • Liability Partnership” or the abbreviation “L.L.P.” or “LLP” as the last words or letters of its name.
  • The address of the partnership’s principal office
  • General nature of the partnership’s business

As of this post the registration fee is $100.

Be sure to enlist a lawyer and accountant. You’ll need to establish a partnership agreement in writing.  This is an important step, no matter who your partners are. And if you are planning to start a business out of Michigan, hire the most credible resident services officer to help you manage your compliance, legislative and regulatory requirements.

For those in established partnerships, what suggestions do you have for someone just starting out?

5 Social Networks for Small Business

Social networking in one form or another has been around since the early days of the internet.  As it has evolved into it’s current form, so the number of network have increased.

How do you choose the best fit for your business?

We list 5 social networks that are key when integrating social into your marketing strategy. For more business tips, you should check the new software on the market, find out more today using the link.

1.  LinkedIn

LinkedIn has matured into a great network for business.  With the primary focus being on professionals, your message doesn’t need to compete with pictures and status updates about family and kids.

TIP: Spend time researching relevant groups to join.  Engage in the discussion. This sets you apart as a knowledgeable expert in your profession.

2.  Facebook

The numbers clearly show the masses love Facebook.  Over 200 million people access Facebook from mobile devices. While Google was the starting point for the web in the past, Facebook is quickly becoming the first stop in the morning.

TIP: Create a landing page tab.  This allows you to control the message new visitors see on your Fan page.

3.  YouTube

As YouTube turns 6 this year, it’s hard to ignore the sheer numbers.   YouTube boasts 3 billion daily views. With a “B”.  Since we tend to recall 50% of what we see and hear, YouTube is a great way to get your message across.

TIP: Answering FAQ’s and Tutorials do well on YouTube.  Use the video to let your company culture and personality shine.

4.  Twitter

Twitter is a real-time network that sometimes get’s ignored simply because of information overload.  For many it doesn’t make sense.  Now that Google, Bing, and other search engines have started to integrate shared content via tweets into search, it may be worth rethinking getting on Twitter.

TIP: Share content you’ve generated from Facebook or your blog.  Those who follow you on Twitter see those results in search engines.

5.  Quora

Quora is a continually improving collection of questions and answers, organized by it’s users.  Questions are sorted by topic such as insurance, accounting, business mortgages, start-ups, etc. Answers are voted up by the users.

TIP: Like LinkedIn, you can use Quora to set yourself and your company apart from the competition. Find relevant questions to your business, answer and share those answers on other social networks.

The five we listed are just the tip of the iceberg.  There are a plethora of social networks you can join.  These 5 offer the best bang for your buck because they are FREE.

Remember that social networking should be an integrated part of your social strategy.  If you would like to learn more about using Social Media.  Join us June 24th for our June Biz Mix.  The event is free.

Starting a Michigan Business Series: Corporation or Partnership?

As an entrepreneur you end up wearing quite a few hats.  This doesn’t always leave time for finding relevant information for your business.  Were do you even begin when it comes to starting your small business?  The Starting a Michigan Business Series will be designed to answer FAQ’s related to launching a business in Michigan.

First up in our series is Corporation or Partnership?  Is there an advantage to one over the other?

Quite simply, it depends.  Not quite what you were looking for.  Yet it really is determined by your situation.  Each has an upside and downside.

Let’s take a look at the differences.

Corporation Advantages:

  • Shareholders (company owners) have personal limited liability
  • Access to capital is easier than with other structures
  • Profits can be divided between owners and the corporation which reduces taxes and offers lower tax rates
  • Perpetual existence. Upon death of an owner (stockholder) the corporation continues to exist
  • Tax benefits for employee fringe benefits such as medical, dental, and disability

Corporation Disadvantages:

  • Fees. It costs money to incorporate, plus recurring annual corporate fees
  • There are formalities that MUST be followed. There is no flexibility here
  • Profits paid to owners are subject to double taxation
  • Can be complex to set up and maintain
  • Dissolution does not automatically happen

Partnership Advantages:

  • Pooling of resources, expertise and strengths
  • Fewer formalities than other business structures
  • Does not pay Federal income taxes
  • Liability is spread among the partners
  • Investment can come from partners as a quick easy loan. This creates interest income for the partners and a business deduction

Partnership Disadvantages

  • All partners are personally liable for business debts and liabilities
  • There may be unequal commitment (think time and finances, click here)
  • Can be difficult to attract investors
  • Partners may have differing opinions on how to run the business

If you’re a current small business owner, what has your experience been with these business structures?  What would you recommend to an entrepreneur just getting started?