If you’re thinking about starting your own business, you have to think about your corporate structure. Defining how your company is structured will affect your business in ways you can’t easily anticipate. Corporate structure is a complex proposition for today’s entrepreneur, and carries some serious penalties for making a mistake. This is a primer — a way for you to learn what questions to ask when you talk with a lawyer about setting up whatever structure works best for you.
Proprietorships
Proprietorships are company structures that don’t establish a corporation as a separate entity. This has the advantage of simplicity since you’re not filing taxes twice, but doesn’t provide the protections of corporate structure. There are three basic types of proprietorship.
Sole Proprietorship is where you own the business yourself and take on all benefits and responsibilities personally. A freelance writer operating out of a home office often has this kind of structure.
Partnerships are like a sole proprietorship, split up between a small number of owners in the business. A moving company run by three people who share the van and split the work might use this.
LLCs, or Limited Liability Companies, split the difference between a Partnership and a Corporation by maintaining a partnership structure, but adding some of the liability protection afforded by creating a second entity. It’s more complex than other proprietorships, but offers more protection. Either the freelance writer or the moving company described above might opt for an LLC.
Corporations
A corporation is a separate legal entity from the people who own or work inside of it. This creates a variety of complexities and legal requirements, but also protects you from liability and some other responsibilities if things go wrong with your business. There are two types of corporation.
C Corporations are what most people think of when they hear the word “corporation.” A C Corporation is a separate legal entity that pays its own taxes and is treated as legally separate from the stockholders, officers and board members. Examples of C Corporations include manufacturers, individual restaurants and grocery store chains.
S Corporations create a separate legal entity that is not separately taxed. The company instead reports its profits, and the owners are taxed on those profits according to what percentage of the stock they own. It simplifies some of the finances at the expense of greater risk and responsibility for the owners. S Corps usually work best for smaller businesses with a limited number of stockholders.
Special Cases
Cooperatives and Not-For-Profit organizations are two other kinds of corporations. Each has some unique advantages, but both carry far more responsibilities and complexities than a different type of corporation of similar size. Talk with your lawyer if you think one of these structures is best for your goals.
Jason Brick has contributed over 2,000 blog and magazine articles to publications local, regional and national. He speaks regularly at writing and business conferences. You can find out more about Jason at his website.
In today’s business climate, the concept of an office is becoming blurred. The Internet is allowing employees to work from anywhere. Employees can stay productive from home or remote offices with email, important documents, resources, and even the phone system all stored in the cloud.
When we built the Phonebooth cloud based phone system, we saw this writing on the wall. Typical phone systems couldn’t handle remote workers or secondary offices. They were only capable of handling the needs for that particular office. So we built a simple way to enable communications between offices without having to purchase anything extra.
Phonebooth works great for small businesses that have employees working in several different locations. The only equipment you need is the VoIP telephones. The phones plug into the Internet connection and the Phonebooth system handles it from there.
When you want to call a co-worker in another office, simply dial the extension for that person and it will ring their phone. You can even have ring groups set up to ring phones in different offices at the same time. If a sales team is spread out across the country, but you still want to have them share the calls from the sales line, you just need to add all the users to the group and it will ring every phone at the same time when someone calls.
In addition to the great advantages Phonebooth provides on the inbound side, it also has great advantages on the outbound side. When an employee from another office calls outbound from the Phonebooth system, they can display whatever caller ID they’d like. For instance, they can display the main office number, so when someone calls back, it goes back to the main number. The other option is to have it display their direct dial number. This allows customers to hit redial and it will ring the employee’s phone directly. These options really empower you to customize your phone system to fit your business needs.
Recently the power was out in our office and we had to work remotely. It was business as usual. Each person took their Phonebooth IP phone home with them, plugged it into their internet connection, and without doing anything else the phone was operational like they were sitting at their desk. Productivity didn’t take a hit because of the power outage.
There are many advantages to having a cloud based phone system. Having remote workers under the same phone system is a time and money saver. It allows everyone to be connected without any hassle or extra equipment. Everything else is moving to the cloud—why not your phone system?
For more info on moving your small business to the cloud, check out our eBook: Cloud Computing for the Small Business.
Next time you’re in a meeting with your workmates, take a look around the table and take notice of the diverse approach to note taking. Did the fresh leather bound journal with the silky bookmark catch your eye, or was it the tappity tap-tap on the screen of your neighbor’s tablet? Better yet, did you spot the digital tablet WITH the smart looking leather bound folio? What’s up with the guy who arrived with nothing? Is he going to swoop in at the end of the meeting with his smartphone and snap a picture of the white board for Evernote?….do you lean over and politely whisper for a copy? What about the purposeful planner opened, complete with mini calculator, pencil pouch and crisp yellow legal pad standing at attention. If someone plunked down a mini tape recorder in the middle of the table, would the room go silent?
There is ongoing research around efficiency, effectiveness, and retention using both approaches (I am sure copious amounts of notes were taken) and as you would imagine, both sides have strong arguments. More general conversations and writing on the topic wrap up with a “use what works best for you.”
We will continue to see new technologies and tools for taking notes come into our lives, but safe to say good old pen to paper will continue to persist as preferred method for many.
I have personally tried using a tablet, laptop and apps to take notes. I find myself quickly retreating back to my trusty pen and unlined index cards.
I think the reason I gravitate back to my paper place, clicking the pen and merrily doodling along, is the open and unrestricted canvas paper provides. Most of my notes are mini drawings interspersed among key words circled with arrows shooting off to another area of my card as I further unpack thoughts. I always have multiple cards on hand in case I need to grab a fresh one and stow away a thought or idea for later.
Additionally, for me, the tactile feel of putting pen to paper just feels so much more convincing and gratifying than typing, swyping or clicking. You can’t do a triple underline with a circle around an idea that pops into your head using a keyboard.
I keep completed cards in a shoebox. From time to time people in my office will poke fun at me. I smile, hold up the shoebox, give it a shake and say, “lots of good ideas in here…and a few really bad ones also…”
Let us know what note taking methods and tools work for you?
VoIP phone systems make it easy for small business owners to do a lot of things that were huge time and resource drainers just 10 years ago. A VoIP phone system can function as a true extension of your workforce, creating efficiencies and benefits that help many entrepreneurs take their businesses to the next level. Not convinced? Here are 5 ways VoIP phone systems are changing small business operations.
You can be small, but look big.
Cloud-based VoIP phone systems can do all the things an enterprise-class system can do at a fraction of the price. So for a very small monthly spend, you can have sophisticated phone trees with professional-sounding auto-attendants. You can set up the system for group calling (like in a big call center) and make sure that every call is picked up. You can broadcast on-hold music and create custom on-hold messaging, all with the push of few buttons. So when a big prospect calls, they’ll never know whether you have two employees or 1,000.
No admin required.
When they use a VoIP phone system like Phonebooth, small business owners often find that they can cut back (and save money) on other resources, such as a receptionist and an onsite IT professional.
With an auto-attendant, you can create sophisticated menus and a calling structure that allows you to maintain a professional image without hiring someone to answer the phones. You’ll also save on either onsite or outsourced IT support because the system is so simple to set up and manage. You do it all through an online portal, where changes can be made with the click of a mouse.
More flexible work environments.
Employees love VoIP phone systems because they have features to help them stay connected—no matter where they go. A VoIP phone system, such as Phonebooth, allows you to forward calls from your office line to your mobile number, home number or both. That way, you never miss a call. It’s a great way to give your team members more flexibility in their work schedules and it allows important customers to reach them during whatever work hours are appropriate for your business.
Less telecom investment.
VoIP phone systems are much less expensive in terms of upfront costs than using a traditional landline phone with advanced features (such as group calling and auto-attendants). In fact, VoIP can save you thousands of dollars a year in monthly service costs alone. Add onto that the savings of being able to do everything yourself (no IT consultant required), and you’re already big into the black on office phone costs.
With a VoIP system like Phonebooth, there is also very little hardware to purchase. You just need a VoIP phone and high-speed Internet—and you’re ready to go!
Speedier Customer Service
With a VoIP phone system, your customers don’t have to wait on hold or spend time courting a receptionist to get to the person they need. They can simply call your main number and follow a series of prompts (that you set up ) to get to where they need to go. For example: press 1 for service, 2 for billing, 3 for a sales representative…you can direct calls to wherever they need to go for the quickest possible resolution. No more time wasted with your sales guy trying to resolve service issues or the President of the company being bombarded with calls from pushy sales people.
To learn more about VoIP phone systems for small business, download the FREE eBook: What is VoIP? Understanding the Basics of VoIP Technology.
Small businesses can offer customers lots of value that is sometimes hard to achieve with larger businesses… like more personalized attention, handmade products, the use of local resources and fewer overhead costs. Oftentimes, consumers prefer working with small business establishments for these very reasons. But sometimes, small businesses get overlooked in the selection process because of factors such as a sub-par website, minimal years in business or the perception that operations are too small-scale to support the prospect’s needs.
Implementing a small business phone service can go a long way in helping a small business stand up against its larger competitors. In fact, by implementing a business VoIP system such as Phonebooth, small business owners can create a stronger professional identity for their operations—just by setting up a clearly defined phone tree and auto-attendant structure.
Not convinced? Think about how a typical small business would handle customer and prospect calls without the use of a dedicated phone system. Depending on the size of the business, there might be a single receptionist or office manager answering the main phone line. In the most basic setup, that receptionist would do one of the following: take the calls herself, take a message, or ask the person to hold so that she (or he) can locate the proper person to take the call.
Now imagine that same office with a very different structure for answering and trafficking calls. By implementing the Phonebooth VoIP small business phone service, the same small business can make use of an auto-attendant and set up a sophisticated phone tree to route incoming calls. Here’s how the phone tree might look:
As you can see, creating an auto-attendant can lend a lot more flexibility to the way you manage your office’s incoming calls. It can also help you create the perception that your small business is much larger than it is. For instance, you can still have one receptionist that answers all the lines–but the very notion of being about to press “1″ for service creates the sense, in the customer’s mind, that dedicated service is just one touch away.
If it sounds like smoke and mirrors—rest assured, it’s not. Using an auto-attendant to help manage your calls and, by extension, your professional identity makes good marketing and customer relationship sense. It’s a great way to tie a ribbon on a well-established, high-functioning small business operation and really make it shine in the eyes of customers, prospects, investors and more.
Despite having limited resources, nonprofit organizations recognize the importance of creating a strong organizational identity. Marketing the organization—its goals, core activities, and results—is critically important to experiencing long term success. Nonprofit professionals have become experts at doing more with less and rely on cost effective tools to help them communicate their missions. One of the most important, yet often complicated, parts of this process is utilizing a professional VoIP for business phone system. Phonebooth provides a business phone solution that offers nonprofit organizations all the benefits they need at a cost they can afford.
Why do nonprofit organizations use Phonebooth?
Phonebooth’s hosted VoIP phone system is a simple way for nonprofit organizations to cost-effectively manage complex telephony needs with features that are far superior to standard telephone service. With Phonebooth, nonprofits can:
- Create a professional identity with features like an auto-attendant (virtual receptionist), group call routing and the ability to create customized greetings.
- Save money on IT support staff, since the system is quick and easy to administer through a web-based Internet portal.
- Save time spent managing the phone system and call routing requirements and focus more staff resources on mission-critical tasks.
- Operate more efficiently because employees, volunteers and temporary staff can use the system from anywhere.
How does Phonebooth work?
Setting up and managing Phonebooth is easy, with no tech experience required. Since Phonebooth VoIP for business is a cloud based phone system, virtually all the system hardware is located offsite. The only equipment you need is a high-speed Internet connection (the one you probably already have) and some IP telephones.The feature-rich system is administered via a user-friendly online portal, where staff members can quickly and easily make changes to call routing, create or modify call groups, add or remove users, set up auto-attendants and more. The best part is that every Phonebooth feature is included in your monthly fee of $20/user—with no contracts to sign and no unexpected add-on costs.
For more information about how the Phonebooth VoIP for business phone system works, check out the tour.
The type of business structure you use when setting up your small business has far-reaching tax consequences. How much you pay Uncle Sam and what sort of tax forms you file is directly related to which of the five types of company entities you choose.
Making the right choice in the first place is important, because though you can sometimes change your corporate structure later, it’s not easy to do and may require the assistance of an accountant or tax lawyer.
Sole Proprietorship
The most common business structure is a sole proprietorship. As its name suggests, this type of business is designed for single-owner companies. It is the easiest of all the corporate structures to set up and works for any kind of business. As a sole proprietor, you have complete control of the company. You own all of the profits and assets and are responsible for all debts and financial obligations you incur while doing business.
The net income or loss from the sole proprietorship is combined with all of your other income and deductions and you are taxed on your personal income tax return using individual rates. If you expect to make a profit on the business, you need to make quarterly estimated tax payments.
Partnership
A partnership consists of two or more people who join to form a business. Each member contributes assets like money, property and skill, and they share the profits, losses, debts and liabilities. The partnership entity pays no income tax, but instead files an information form with the IRS. All members of the partnership report their share of the income or loss on their personal tax return and pay tax. Partnerships that expect to make a profit must make quarterly estimated tax payments.
Three main types of partnerships exist. With a general partnership, partners equally share liabilities and assets, unless otherwise noted in a written agreement. A joint venture refers to a general partnership that only lasts for a specified period of time. And a limited partnership puts restrictions on each partner’s liability and ability to make management decisions.
C Corporation
A corporation is the most complex of all the business structures and is the most regulated and closely monitored. Such entities are formed according to the laws of the state in which they exist.
A corporation is a separate entity that can be taxed and held liable for debts, which means you generally aren’t personally liable for the company’s financial obligations or actions. Income earned by the corporation is subject to state and federal tax and is taxed using corporate tax rates, which are often higher than individual rates.
Any earnings paid in the form of dividends to shareholders (company owners) are taxed at individual tax rates on personal tax returns. If you are an employee of the corporation, you pay one-half of the required Social security and Medicare tax and the corporation can deduct its half.
S Corporation
An S Corporation is a variation of the C Corporation that helps corporations avoid double taxation. This type of business entity is formed under state law and is considered separate from its shareholders and officers. The C Corporation is exempt from most federal income tax and is treated like a partnership—taxes are not paid at the corporate level but are passed through to individual tax returns.
Limited Liability Company
A limited liability company (LLC) is allowed in most states. This business structure features the limited liability, for owners, of the debts and actions of the LLC and provides management flexibility and pass-through taxation. Owners of LLCs are known as members, and most states permit single member LLCs. There are restrictions on what can be considered an LLC.
Taking the time to determine which corporate structure is best before setting up your business makes for a smoother, less taxing tax season.
By Julie Bawden-Davis
A freelancer since 1985, Julie Bawden-Davis has written for many publications, including Entrepreneur, Better Homes & Gardens and Family Circle.
6 Business Podcasts You Shouldn’t Miss
Business podcasts are a great source of continuing education for small business owners. They provide current news, actionable ideas and even companionship without the time demands of a class or seminar. Whether you’re new to the media or a full-blown podcast addict, it’s worthwhile to give some attention to these thought leaders in the business podosphere.
1. Smart Passive Income Podcast
Smart Passive Income aims at people who own, or want to start, passive income generating websites, but focuses on web marketing concepts any business can apply. Interviews, inspiration and recommended reading add more helpful info to what the podcast offers.
From basic skills to advanced ideas to resume grooming, this podcast is designed for professionals who want to keep their careers advancing at record speed. Most of the concepts are equally important for small business owners, and can — with a little spin — be applied to growing any company or department.
Not an ongoing podcast, this material is a multi-session tutorial on keyword research, search engine optimization and dominating the web in your areas of expertise. Download material free either as an audio podcast or a video series showing step-by-step instructions and examples.
The QnD network offers short-form podcasts from a variety of experts, with each episode focusing on a specific trick, technique or skill. Businesspeople can choose between advice on public speaking, time management, budgeting, law, etiquette and more. The shorter lengths as compared to other ‘casts makes these great for short errands and similar tasks.
5. Project Management War Stories
Just what it sounds like. War Stories offers anecdotes and appropriate advice from the trenches of day-to-day project and business management. Experienced managers will laugh as often as they learn, and come away feeling like they’ve visited with colleagues. As of late, this podcast appears to be “podfading” but still has 52 episodes up for your consideration.
6. Harvard Business Review IdeaCast
You can’t discuss comedy classics without mentioning National Lampoon, nor law without the Harvard Law Review. IdeaCast has the same thought-leading, up-to-date insight as those publications. The program has changed formats over its run, with its most recent face being a series of interviews with the likes of Amazon CEO Jeff Bezos.
The trouble with recommending podcasts is how quickly things change. What podcast news or other recommendations do you have? Share them with us in the comments below.
Jason Brick has contributed over 2,000 blog and magazine articles to publications local, regional and national. He speaks regularly at writing and business conferences. You can find out more about Jason at his website.
It is a great moment for your small business: the moment you make the leap from a home- or small-office situation to something larger.
But how do you do that and what will help you make that transition without large-scale interruptions to your critical customer relationships and in-office workflow? Let’s start with some basics. Leases, communications, and customer awareness. The following are some good ideas that will get you through the move.
Leasing the Space
You’re almost certain to feel a flush of excitement when you walk into the wide-open rooms that represent that next step up in the story of your small business.
But don’t be so dazzled by the blank slate and possibilities that you miss the key details in leasing a new office.
— Whole-Cost Calculations: It’s not just the price tag on the lease, it’s the utilities and other costs associated with the building. Find out from from other tenants: what do they pay in the winter to heat it, for example, or in the summer to cool it down?
— Vet the Landlords: While you’re striking up that conversation about expenses, ask current tenants about the landlords. And ask them about the other tenants, too. Make certain there are no maintenance or responsiveness related issues, landlord to tenant. Ensure that the other businesses are in good standing, and that they’re good neighbors in terms of sightliness and sound.
— Aesthetics and Practicalities: Walk the building and grounds. Is the neighborhood right for the image of your shop? What about in-house security? Confirm that the decor and feel of the common spaces is a good fit for your customers.
— Expansion Clause: Since office leases tend to be for multiple years, look for and demand an expansion clause — a guarantee that the new landlord will allow you to move into an even larger space that they own, should the need arise.
Reliable Network Connectivity
New buildings introduce new materials, as well as the possibility of connectivity quirks and complications based on location and nearby interference. If your staff is increasing along with your square footage, you may need a more robust wireless system to handle the volume.
— Materials: Look out for large amounts of steel and/or lead in the new space, not just in the walls but in wire mesh on windows or exposed beams. Concrete can also prove a problem, as can external features, such as trees or water (in cases when your new office is spread between more than one building).
— Competing Systems: Check to see how many other and what kind of wireless systems are working within the building, as these can overlap and impact your own.
If you discover you’ve a great space but a not-so-great wireless environment, bring an IT professional into the mix before you sign. There are ways around some obstacles, but they require some experience — and money — to fix and make right.
The Phone System as an Office System
You want your office phone system to reflect your growth.
Mobile phones are ubiquitous and certainly a part of your communications landscape, but a bigger and more complicated business demands a more sophisticated trunk system to handle incoming calls and route them correctly.
A cloud-based business phone service such as Phonebooth is key to keeping your customer-facing system professional, and operating smoothly, all the while remaining affordable amid the numerous expenses your move can incur.
Customers: New and Old in Your New Space
Finally, bring your customers inside.
Invite longstanding and new clients — maybe vendors as well — to join you in your new office space. It’s been a big move, and you should take a moment at the end of it to celebrate. There are, after all, the folks who helped to make this happen — and you want them to be able to find you just as easily as they always have. It’ll be fun, too!
By James O’Brien
In addition to writing about social media and content strategy, James O’Brien blogs for Contently about business, politics, technology, and travel. He has contributed as a ghostwriter to several recent publications on the media, technology, and social change. He is a correspondent for Boston University’s Research Magazine and he has written extensively as a news correspondent for The Boston Globe. He joined the caption-research team for photo-essayist Rick Smolan’s new book, The Human Face of Big Data, in 2012.
Travel agency finds voice clarity, consistency and peace of mind with Phonebooth
The cloud based business phone provider Phonebooth, a division of Bandwidth, recently announced that AiresLibre Travel has selected its first-class VoIP for business phone solution to power the agency’s on-the-go management style and provide exceptional customer service to its clients booking custom vacations around the globe.
Based in Florida, AiresLibre Travel is a boutique agency specializing in customized excursions to Europe. In this competitive travel industry – where agencies are competing against a myriad of online options – customer service, dependability and responsiveness are the hallmarks that create a more personal experience for the consumer. AiresLibre Travel prides itself on providing exceptional customer experiences. It needed a voice solution that could support its global communications needs and deliver clear, dependable service that upholds its impeccable reputation. The agency implemented Phonebooth’s reliable, affordable and flexible services to support mobile call forwarding and transfer calls globally without sacrificing quality or disrupting daily business operations.
“Phonebooth offers my globally based team quality, reliability and full mobility that gives me peace of mind that customers can always find me, even when I’m on the road,” said Raquel Segura, CEO and owner of AiresLibre Travel. “We are very busy, so if I’m unavailable when the phone rings, Phonebooth automatically forwards the call to my business partner in France so we are always within reach of our customers. Phonebooth allows us to present a stronger, client-focused business image and concentrate on exceeding customers’ expectations when planning their travel arrangements.”
Phonebooth’s customized phone package has helped AiresLibre Travel maintain a high level of professionalism at a more competitive price point. Switching to Phonebooth has not only enabled AiresLibre Travel to meet client demand, but it has also supported the rapid expansion and growth of the business.
“Small, global businesses require a phone service that allows them to deliver exceptional customer service and treat international calls as if they were local—with a clear connection at an affordable price,” said Jim Mulcahy, EVP and general manager of Phonebooth. “Offering a wide range of features is one of the many reasons our customers continue to choose Phonebooth. We treat them as part of the Phonebooth family and listen to each of their distinct needs, and AiresLibre Travel is no exception.”
Sooner or later just about all small business owners will need financing, whether it’s a brief gap between receiving stock and paying for it, or a multimillion dollar mortgage on a new facility. Though it’s true that you’ll pay more for this money than you would for a personal loan, this doesn’t mean you have to just take whatever rates are offered. Consider these five strategies for cutting costs on your small business loans.
1. Start (but Don’t End) With Your Bank
The relationship you have with your local banker can still help you get approval and better rates on your loan, although new regulations and policies have made this less true now than it was in the past. However, local banks may not be able to compete with some other loan providers. The best strategy is to go first to your local bank, then compare that loan to offers from discount providers. If you get a lower offer, use it as a bargaining point before committing to the devil you don’t know.
2. Establish Credit Early in Your Business’s Life
A series of short loans that you repay quickly can be worth the money you spend in finance and banking fees. One reason business financing is so expensive is the statistically higher rates of delinquency and default. The more you can establish that your business is a better risk, the less expensive and restrictive your financing will become.
3. Get Friendly With the SBA
The U.S. Small Business Administration offers loans for which you may or may not qualify, but also offers a wealth of free services to help you grow your business and your creditworthiness. Their SCORE Program, for example, pairs new business owners with experienced entrepreneurs who will help you groom your company for the cheapest and most appropriate business loan package.
4. Avoid Lenders Who Come to You
If you’ve been in business for any real length of time, you will have received phone calls, emails and snail mails offering you unsecured credit to expand your business or consolidate existing debt. There’s a reason these lenders are offering you money while established and legitimate lenders make you jump through hoops. The fees and interest rates on these loans are as high as legally possible. Don’t fall for this scam.
5. Plan Early and Often
The better your credit history, the better your payment record, the more complete and meticulous your business plan, the more likely you will be to get a good loan on affordable terms. Borrowing for emergency funds is harder and more expensive than borrowing as part of an overall plan for success.
Any stories of success (or defeat) from the trenches? Tell us about them in the comments below.
Jason has contributed over 2,000 blog and magazine articles to publications local, regional and national. He speaks regularly at writing and business conferences. You can find out more about Jason at his website.
