General (Small Business) Articles

Cheat Sheet / Updated 05-03-2022

Owning and running a small business calls for a variety of skills, perhaps foremost among them organizational. If you’re going to incorporate your business, you need to explore the differences between becoming a C corporation and an S corporation. And if you want to attract investors or even apply for a loan, you’d better be familiar with the key elements of a business plan.

Cheat Sheet / Updated 04-05-2022

Managing the finances of a small business is a multi-layered task. You need to become familiar with standard financial documents, pay attention to profits, and make the most of the business’s assets. And you always have to be thinking and planning ahead. You have some work to do, get to it!

Cheat Sheet / Updated 03-23-2022

All customers are not alike. Knowing how they differ — what their individual and group needs and preferences are — is key to successful marketing efforts nowadays. Marketing strategy involves segmenting your customers into groups and researching and studying those groups to tailor your messages specifically to them. Social media is a great way to do that because the various types of social media already have their own quirks and styles associated with them, and that can be an aid when it comes time to hone specific marketing messages. Another important modern-day piece of the marketing puzzle is content marketing, which adds value by providing real content that consumers can use, but which also promotes your business.

Cheat Sheet / Updated 02-23-2022

Being smart with marketing ensures the success of your business by attracting more customers, and keeping them coming back. Whether you own a bakery or a finance business, you need no-nonsense marketing strategies to secure a greater share of the market. This Cheat Sheet includes essential marketing tools, tips for marketing on a low budget, and much more.

Cheat Sheet / Updated 02-17-2022

Small Business Taxes For Dummies assists both current and aspiring small business owners with important tax planning issues, filing issues, dealing with IRS audits and notices, getting help, and more. To get started, you can discover some strategies to make informed tax moves and ask a few important questions if you're thinking of hiring a tax advisor.

Cheat Sheet / Updated 02-01-2022

Individuals are now, more than ever, realizing the power of the limited liability company (LLC). If you’re like many people, you probably understand that an LLC can benefit you in one way or another; you just don’t know the next steps to take. Read on to find out the benefits of LLCs, get help naming your LLC, and get the lowdown on the different tax types for LLCs so you can make the best decisions for your business.

Cheat Sheet / Updated 01-20-2022

From managing to marketing and everything in between, the world of small business can be both exciting and overwhelming. It’s a place where no two workdays are exactly the same and where unpredictable things happen. If you’re thinking about starting (or you already run and manage) your own business, check out the following list of tips to improve your chances of success.

Article / Updated 09-01-2021

You've finally made it! After many months or, perhaps, years of planning and saving, you're now the sole proprietor of your very own business — woohoo! But now the real work begins, and one big question lies ahead: How much should you be charging? Start with addressing how you should charge, then move on to determining an appropriate rate. Charging by the hour vs. the project Most self-employed service providers charge in one of the following ways: By the hour: You establish an hourly rate, keep track of your time, and bill clients for hours spent on their behalf. This is the standard pricing approach for service businesses handling small-project jobs. By the project: You and your client agree in advance on a fixed price for a defined amount of work. This is the standard pricing approach for service businesses handling large-project jobs. A combined approach: A building contractor, for example, may bid on a set of plans and establish a fee for the project. But he may also stipulate that additional client-requested work over and above that covered by the estimate is to be paid at an established hourly rate. Other businesses follow other billing approaches. For example, authors often receive a royalty, or a percentage of the cover price, for each book sold. Freelance writers may charge by the page or word. A photographer might sell rights to photos based on the way the purchaser will use them. And some professionals are paid retainers, or upfront payments, in return for their availability to work on an as-needed basis. Whatever payment arrangement you settle on, you still have to figure out exactly how much to charge. Establishing an hourly rate If you provide a service of some sort, begin by establishing an hourly rate. Even if you end up charging by the project or product, when you know your hourly rate, you can estimate the number of hours a job will take and multiply that number by your hourly rate to arrive at your project or product cost. One way to establish an hourly rate is to find out what other people doing similar work charge. In some cases, you can discover this information simply by talking to other independent contractors or by looking at their websites or marketing materials. You can also check with professional organizations to get an idea of what people charge in different parts of the country. Rates do vary. For example, freelance editors may be able to charge $35 an hour in St. Louis or Cedar Rapids and $50 or more in pricey places like New York or California. To be competitive, set your rates within a similar price range. If you’re just starting out, you may want to begin at the lower end of the scale. If you have a long list of credentials and have earned rave reviews from clients, you can shoot for the upper end. Another way to arrive at your pricing is to consider the following: How much customers will be willing to pay for your product or service How many hours a year you think you can spend on billable activities How many hours a year you need to devote to running your business How much it costs you to run your business Whether your projected revenue minus expenses equals an adequate profit Say that you’re a consultant who wants to personally make $80,000 a year. Further, assume that your overhead costs total $22,000 a year, plus you want to earn at least $8,000 profit annually to fund future growth. That means your consulting business needs to bring in at least $110,000 each year. Next, say that out of each 40-hour workweek, you’ll spend 12 hours running your business (doing the banking, networking, making new business calls, working with accountants, and on and on). That leaves 28 hours a week, 50 weeks a year (assuming that you give yourself two weeks off for a well-earned annual getaway) for billable activities — or a total of 1,400 billable hours a year. With all of that information in hand, you can divide $110,000 by 1,400 hours to arrive at an hourly billing rate of $78.50. If that’s more than you think clients will be willing to pay, you have a few choices: You can reduce your overhead costs, you can reduce your earnings and profit expectations, or you can spend more hours on billable activities, which probably means working longer weeks. Determine your tasks, time, and expenses To get a good idea of how you spend your working days, use this form. This information will be useful as you work to set your hourly rate. Even if you’re self-employed, plan to make and set aside a profit above and beyond what you pay yourself. Doing so allows you to expand and develop your business when times are good. It also provides an important safety net, should your business experience an unforeseen setback. Take time to figure the hourly rate you need to charge to cover your salary, overhead, and profit projections. You may want to use this form to make sure that your rate covers all your business expenses. Check all categories that apply to your business and enter the rough amounts you expect to spend. In your business plan, include information on how and what you intend to charge for your service or product. Show the calculations behind your pricing decisions.

Article / Updated 08-02-2021

If you don’t find an Etsy team that meets your needs, you can start one of your own. For example, you may want to start a team for other Etsy members who share your passion for your medium, who live in your geographic area, who are devoted to a particular style of design, who share similar goals with their Etsy shops, or what have you. Note that when you create a team, you automatically become its captain, so administrative duties fall to you (unless you delegate them to other members). To create a team, click the Create a Team button in the top-right corner of the main Etsy Teams page. Etsy prompts you to enter the team details. The name and team type A short description and (optionally) a long description Rules about team access and (optionally) who can join Application questions (if needed) The team’s logo Tags to describe your shop Related links (for example, you may include a link to your own personal website or to some other relevant page online) After you fill in the requested information, click Create Team.

Article / Updated 03-03-2021

An operating agreement is a contract that controls how an LLC (limited liability company) operates and how the members interact with the LLC. You might think that as a sole owner of a company that no operating agreement is necessary — after all, operating agreements are comprised of terms agreed to by all of the members, and well, why make an agreement with yourself? Reason 1: Without an operating agreement, your LLC is bound by the default rules of your state. We all know how business tends to go when the government is the one calling the shots. It's not pretty. Luckily, most state laws governing LLCs allow the default rules to be overwritten in the company's operating agreement. Now, the states vary substantially on what can or cannot be amended in your company's operating agreement. Do some research before drafting your operating agreement to make sure that the terms you're putting into place for yourself are even legal in your state. Reason 2: The alter ego problem — you must separate the business from the individual. A major benefit of an LLC is that it limits liability in two ways. First, it protects the member from lawsuits that arise from the business of the LLC. Second, it protects the LLC from the personal liability of the member. Without an operating agreement — which states that the LLC is an independent business, what the business does, and when the business was formed — the business looks a lot like a sole-proprietorship, which has no liability protection. In other words, it's really no different than good ole you. The danger of this lies in the fact that the courts will not recognize that your LLC is its own entity (or "person," so to speak) and will not allow you all of the great liability protection advantages that an LLC offers. Reason 3: You can allow for future growth. All successful businesses have something in common: They grow! For example, a business might want to take on investors in order to expand. An operating agreement can provide for how the investors will be treated, such as how their investment will be repaid, what voting rights the investors will have in the company, and what happens when the investors want to "cash out" of the business. If you know what you want, then it's good to get this all structured up front. Especially if you aren't interested in giving future investors too much wiggle room in the negotiations. Having your company already structured in a way that allows for explosive growth will definitely put you in a much more powerful position come fundraising time. Reason 4: You can control the day-to-day operations. Often, a business owner wants to bring in a manager to operate the business while the owner can concentrate on big-picture thinking. An operating agreement is the perfect place for a sole member to define what powers a manager will have, how he or she will be compensated, and what happens if the person leaves the company. The agreement binds the managers and ensures that they are loyal and financially responsible to the company. As you can see, it is very important for a single member LLC to have an operating agreement. Luckily, you won't have to worry about fighting over terms and getting everyone to sign. All the more reason to draft your operating agreement today!