Small Business - Should You Incorporate or What?
Incorporation - Is It For You? George Monaco
There are times when the lure of adding the word “Inc” after your business name may seem irresistible. With the word “Inc” right after it, your home business will not just be another small and faceless “wanna-strike-it-big-somehow-set-ups”, but a “this-time-I-mean-business” entity called a corporation.
Every website on incorporation you see on the net will advise the small business to: go and incorporate! As if it was as easy and as uncomplicated as the biblical command “go and multiply”.
But is it that easy? Should small businesses consider incorporation? What is the real deal behind incorporating?
Consider your situation
First things first. Consider your scenario. If you’re just starting out, and you’re considering corporation as a business structure, ask yourself this: Are you in for the long haul?
If yes, then it might be good to consider incorporation. After all, a corporation will give your business a “perpetual” life in a sense that even if you and the original incorporators are gone from this world, your business aka your corporation will still be around for a long time because the law gives it a separate entity from you.
Is your business the type which will be immediately profitable in its first year? Let’s say, you’re planning to sell a really hot item which you foresee will bring you loads of cash and a lot of profit in your first year of business. If the answer is yes, then go ahead and incorporate. Corporations are taxed lower than sole proprietorships and partnerships. For example, if a corporation has a declared annual income of $50,000, it will be taxed at 15%, while a sole proprietor declaring the same income will be taxed at the individual income rate of 25%.
If you plan to accept investments later, or if you see the possibility of expanding your business and raising funds through other people’s investments, it would be wise to consider incorporating. With a corporation, it will be easy to raise funds by going public and selling stock. With sole proprietorship or partnership, you will be limited to loans or selling a part of your business — which of course would require lots and lots of paperwork. A corporation on the other hand, will have its paperwork done on the first day and all you have to do is issue or sign over a stock certificate to drum up additional funds when the need arises.
Freedom from personal liability
There are of course other advantages to incorporating that I haven’t told you yet. First is the touted “freedom from personal liability claim”.
This premise lies in the fact that when a corporation is sued, the only assets which can be claimed is the declared assets of the corporation. So, if your house, car or an estate is in your name, and not in your corporation’s, chances are you will be able to retain ownership on them.
But, do not go and jump for joy. If the courts were able to prove that your corporation is a fraud: e.g. you don’t hold regular board meetings, you siphon funds from your corporation to finance your yearly family vacations to Europe or pay your personal debts, then they can and will go after your personal assets.
What more, if you personally injure somebody or do something illegal which causes harm to other people or your own company, you and your personal assets won’t be safe either. After all, it will be you they will be going after and not the corporation, even if the actions were done in the name of your corporation.
In most of other cases, yes, you can restrict personal liability by forming a corporation. That is to say, you have to regularly do your books, hold regular board meetings, issue stock, file your returns and pay taxes, and do all what corporations are mandated to do under the law. Then everything will be fine.
Credibility
Next, it’s a fact that consumers feel safer dealing with “XYZ Ventures Inc.” than with a simple “John Smith”. The “Inc”, right after the business name lends it credibility. Not only that, the abbreviated “Inc”, connotes stability because of it being a separate entity from its owners. So again, if you’re in the long haul and credibility is an important factor in doing your business, it’s not a bad idea to incorporate.
Last but not the least, when you want out, it’s easy to get out. You’re tired of XYZ Ventures Inc? You no longer want to be responsible for 1000 employees and make life-changing decisions everyday? All you want to do is spend money on a 100-day cruise and buy an island somewhere in the pacific? Then, just sell your stock. Hand over the ownership to the rest of the stockholders. Get your money, and ship out.
The ease of transferring ownership in a corporation is one of the factors which makes it popular. In a sole proprietorship, it’s not as easy to liquidate. You either sell or hand it over through a formal last testament.
But as I have said before, a corporation will require you to do a lot paperwork , not only from the start, but through the course of the business. But, who said that advantages come without a price?
If what you’re after is longevity, reduced personal risk, credibility and liquidity then by all means, incorporate!
George Monaco has recently released a guide that explains different business entities in great detail. You can find it at http://www.incorporationmaster.com
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Small Business - Negotiation Techniques That Work
Negotiation Techniques - 9 Verbal Skills By Gloria Hamilten
Performing well in an encounter is analogous to being an actor.
Everyone needs to plan and rehearse for an encounter which entails having prepared a script to avoid surprises.
This does not mean that you need to rote learn a series of lines, but generic words, behaviours (body language, attitudes, tone of voice), and so on are best rehearsed in advance.
Here are the 9 Verbal Skills
1. Say ‘No’
• No, sorry. See you tomorrow.
• No, sorry, can’t help you at the moment. I’ll be free, however, in an hour’s time.
• No, sorry, I can’t, but Judy may be able to help you.
• No, I’m sorry, but I feel somewhat uncomfortable with that decision.
• No, I feel I need more time to think about this proposition in the interests of a fair resolution
You get the idea? You have a right to say ‘no’ to either gain more time, or simply to express how you feel.
2. Direct and Dismiss
• Direct: Get to the topic back on track. This is important because people tend to wander and go off-topic. If people get off-topic, the discussion loses momentum and is diluted. Important points gained can be lost.
• Dismiss: If the question is about a product that has broken down, do not mention that it is the cheapest product in the range, focus on the warranty and suggest applying the warranty as the most satisfactory course of action.
3. Question to Prompt Awareness
• Be aware of your own behaviour
• Diplomatically make others aware of their behaviour
It has been said that everyone at some point in time has ADD that is, Awareness Deficit Disorder.
4. Be Reaction-less
This means that whatever the other person is saying and whatever manner or tone they using, do not under any circumstance react negatively.
Keep your cool and keep focused on your pre-prepared course of action.
5. Force a Choice
• There comes a point in all negotiations and discussions when a resolution needs to be found. Some people just cannot make up their mind, and need a little nudge.
• This is sometimes called a Double Bind when you say to a person, would you prefer this or this, and that person now needs to make a choice.
• It is also becoming very popular to use Triple Binds, so as to really ensure a decision is made.
• Would you like to meet at this time, or this time, or this time: giving three options.
6. Be aware of the Broken Record
• Some people will go on and on, repeating the same information, the same concerns without contributing anything new to achieve a resolution.
• You need to be aware of this tactic, and defuse it by guiding that person to contribute something new
7. Ask for Specifics
• If someone seems to be hedging (as in point 6 above), they could be confused.
• It is very important to ask them, what specifically is holding them back from making a decision.
• It is important here to look for ‘red flags’ or evasion tactics. They may be avoiding the real issue and veiling it.
• More questioning is then needed
8. Decide on a Workable Compromise
• If all else fails, it is necessary to come to a resolution of sorts. A negotiation or discussion cannot go on forever.
• Decide on what is the best workable compromise so that all parties feel that they have a ‘win’ of sorts.
9. Threats
• This should be used only as a last resort, and then proper legal advice should be obtained with possibly a mediator.
Once you are comfortable with these you will be able to prepare a script with ease for your next negotiation encounter or discussion.
Another useful skill at this stage is visualization.
Remember to avoid negative mind-games and self-destructive messages.
Visualization involves positive mind-games of success which will help you develop strategies and verbal skills for use in your encounters.
Visualization is being increasingly used in many areas of personal development, not least of all in sport, where it is proving a useful motivational and planning tool.
Have fun with this. It is worthwhile mastering it.
Gloria M Hamilten is a recognized authority in disciplines within Personal Development and People Skills for Business Professionals, such as Time Management, Negotiation Skills, Developing High-Performance Teams, Assertion Skills, Building International Rapport, Conflict Management and Resolution, Presentation and Platform Skills.
Her studies in Neuro-Linguistic Programming and Psychology have lead to her researching brain disorders such as AD-HD and its relations.
She has her own training business, and conducts courses for Corporate Organizations, Sporting groups and Tertiary Educational Institutions in Australia.
Her professional experience covers over 30 years of study, research, one-on-one coaching, group coaching, presentations and workshops. Her clientele includes children as well as adults.
Gloria Hamilten has authored the eBook: “Practical Self-Hypnosis for Success” and many Reports and online articles. Her websites provide a wealth of informative articles and resources on everything within these genres. Visit her websites: http://www.connect4results.com
http://neuro-linguistic-pro-site.com
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Niche Market - Your Business Got One?
Niche Market and Why You Need One - Jody Gabourie
A niche market can be thought of as a narrowly defined group of potential customers - usually a portion of a larger target market. For example, a target market is working women, but a niche market is working women with kids at home, or working women in executive positions, or working women in the financial sector.
As a small business owner, you usually do not have the money, resources and time to market to a larger target market. You need to focus your marketing efforts on those people most likely to buy what you offer.
Think of narrowing your niche as simply positioning yourself more closely to the people or companies who could benefit most from your services.
Many of us like to believe that the number of people who want and need our product or service has no limit. Also, most of us truly want to help as many people as possible and so therefore believe we almost have an obligation to let everyone know about what we offer.
But the truth of the matter is if a small business tries to market to everyone, they’ll eventually lose money and quite possibly go out of business.
I know it seems to go against common sense that we make more money and have more success when we limit the scope of who we market to. However, it is true and it’s been proven over and over again by very successful small businesses.
There are many reasons why it makes good business and marketing sense to have a niche market:
* you can focus your marketing efforts and not dilute them by trying to appeal to everyone
* it allows you to stand out as an expert in your niche which makes people come to you
* you attract significantly more business
* you have a natural competitive advantage because you can dominate your niche
* your marketing materials and communications are more targeted and therefore more effective
* people more easily refer business to you - as they have a very clear idea of who you appeal to
* you can easily determine what opportunities to say yes to and which ones to pass on
* your creativity and strengths get to shine through
* makes it easy to find suitable strategic partners and joint ventures
* you spend less money on getting your message out there because you’re not wasting time and resources on talking to people who aren’t interested in what you have
By taking the time (and the deep breath!) to narrow down your target group into a niche market that your company, products and services are best suited to serving, you’ll be making a huge investment in a successful future.
Jody Gabourie, The Small Business Marketing Coach, teaches simple, innovative and powerful marketing strategies to help business owners find and keep their most profitable clients. To learn more about how she can help you take your business to the next level, and to sign up for her FREE special report, ezine and articles, visit her site at http://www.JodyGabourieMarketingCoach.com
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