/Starting a Business

Should You Buy A Business Or Start One From Scratch?

Hope your New Year is off to a great start! As you’re looking to make 2017 a year of prosperity, have you set your sights on becoming a business owner? If so, you’re probably wondering whether buying an existing business or starting your own company will offer the best chances of success.

Both have their advantages and challenges, so how do you choose? I wish there were an easy answer, but I’m afraid you’ll need to do some research and put some serious thought into your decision. As you explore your options, consider the following pros and cons of starting a business from scratch and buying an established one.

Pros Of Starting From Scratch
• You begin with a squeaky clean slate, establishing and building your brand reputation from Day 1.
• You build your team fresh and new, selecting the right people for the right positions.
• You create your workflows to maximize productivity, without having any inefficient past processes to “fix.”
• You choose and develop the products, services, and packages you’ll offer to your customers.
• You establish your pricing to ensure profitability from the start.
• You choose your business’s legal structure to ensure the degree of liability protection you need and the most favorable tax situation.

Pros Of Buying A Business
• You have customers and incoming revenue immediately.
• You have employees who already know how to do their jobs and don’t need training.
• You have built-in processes and systems to operate your business efficiently.
• Your services and products are already to market, and you have established sales channels to get them into customers’ hands.
• Your business is already registered and has the necessary permits and licenses to operate legally in your state.

Cons Of Starting From Scratch
• You do all the legwork, including researching the registration requirements to form an LLC or incorporate your business and filing your state, federal, and local paperwork to operate legally.
• You don’t know for certain that your business idea will be viable and sustainable.
• You have to develop and put into place all the internal systems and processes needed to operate your business.

Cons Of Buying A Business
• Existing employees may be resistant to accept your leadership.
• If you find processes aren’t working efficiently, it may be difficult to initiate change because everyone is used to doing things a certain way.
• You may discover the legal business structure the former owners selected isn’t ideal.
• You may find your brand’s reputation isn’t as positive as you’d like it to be—that might be difficult to turn around.

As you can see, there’s a lot to think about as you weigh the options of starting your own business or purchasing one that is already up and running. I advise you to do your homework before deciding which route to travel. And consider seeking the guidance of respected and reputable professionals (attorneys, accountants, business consultants, etc.) who can help you understand the financial and legal aspects of what’s involved.

Remember, whether you’re starting a business or opt to buy and run one that’s already established, CorpNet is here to assist you with all your business registration and compliance obligations. Contact us today to help you take care of your filings so you can take care of business!

 

 

To-Dos When Starting a Part-Time Business

So you’re not ready to quit your “day job,” but you want to start a business? Many entrepreneurs dip their toes to test the waters by launching their businesses part-time. In some ways, it’s the best of both worlds; you pursue your dream of business ownership while still bringing home a steady paycheck.

Although there are some considerations unique to starting a business part-time, you’ll find other aspects are the same as when starting a company full-time.

For example, you have to take the necessary steps to operate your business legally.

 

  1. Make sure you can legally use your business name.

Either check your state’s Secretary of State database or do a corporate name search to see if anyone else has registered the name you want. I also advise using CorpNet’s free trademark search tool to see if someone has already filed for a trademark on the name.

  1. Select a business structure.

By default, your business will be considered a sole proprietor unless you file for a different legal structure. Operating as a sole proprietorship offers simplicity, but it does not separate your personal and business finances and liabilities. That means if your business is sued, your personal assets might be in jeopardy.

I recommend considering formally registering your business by either forming an LLC (Limited Liability Company) or incorporating (C Corporation or S Corporation) to protect yourself. Doing so shields your personal assets from the liabilities of your company.

Before talking with an attorney for guidance, you can start learning about the advantages of different business structures by using CorpNet’s Business Structure Wizard.

Note that the different structures offer different taxation pros and cons, so I suggest also talking with an accounting or tax professional to explore which structure will work best for you in that respect.

  1. Register your business name.

When you form an LLC or incorporate your business in your state, registration of your name automatically happens. However, if you choose to operate as a sole proprietor and want to use a fictitious name for your company, you must register your business name by filing a Doing Business As (DBA). Don’t skip this step! It will allow you to operate your business under that name in your state and it will prevent other sole proprietors in your state from using that name.

  1. Get the licenses and permits you need.

Depending on the type of business you’re operating and where you’re located, you may have to secure licenses and permits to legally run your business. Federal, state, county, and/or local licenses and permits might apply to you. To avoid costly penalties and fines, research which permits and licenses you need to have to legally run your business.

 

Part-time Doesn’t Mean You Should Approach It Half-Heartedly.

Aside from the legal considerations in starting your part-time business, keep these things in mind, as well:

  • Know your limits.

There are only so many hours in each day, so carefully assess your capacity to work in and on your business before jumping in.

  • Make sure there’s no conflict of interest or legal restrictions.

Check with your employer about any rules that would prevent you from starting and operating your type of business while still on that company’s payroll.

  • Take it seriously.

Although you may still be working for someone else in your other job, you’ll need to give your part-time business serious time and energy if you ever want to make it a full-time endeavor.

 

Need Help Getting Your Part-time Startup Off The Ground?

If you’re planning to give part-time entrepreneurship a go, CorpNet is here to help you take care of all the business filings required to legally launch and run your business. Contact us today to make sure your part-time business has all of its registration paperwork submitted accurately and on time.

By | January 11th, 2017|Running A Small Business, Starting a Business|2 Comments

Business Information Zone (B.I.Z) – FAQs

Welcome January and 2017! With the holidays behind us and a bright new year ahead of us, it is a great time to start a business.  This month, we discuss the ways CorpNet can assist with our Business Information Zone or B.I.Z. in keeping your company in compliance!

Q: What is B.I.Z.?
A: Think of B.I.Z. as your business’ personal concierge service. Once you sign up, you’ll receive email reminders on tax and compliance alerts. You can also use B.I.Z. to store your business documents, and keep a personalized business profile that tracks important data about your company — such as formation date, Federal Tax ID number, business licenses and permits, and more.

Q: I didn’t use CorpNet to form my business, can I still use B.I.Z.?
A: Absolutely. Any Corporation, LLC, nonprofit, or professional company can use B.I.Z. to stay on top of their yearly compliance requirements. It doesn’t matter if you formed your company through CorpNet or not.

Q: It states that B.I.Z. is free. Is there a catch?
A: No. B.I.Z. is completely free, no strings attached. We know how challenging it can be to run a small business – and sometimes all the tedious state filing and fees can fall through the cracks. Small business owners don’t always know when their annual report is due or why their business fell into bad standing with the state. We created B.I.Z. to help small businesses keep track of all these filings, so they don’t have to pay an extra dime in fees or risk falling into bad standing just because they missed a deadline.

Q: What information do I need to create an account for free compliance monitoring on B.I.Z.?
A: You will need the following information: your business type (e.g. C Corporation or LLC), your filing state (where you filed your corporation/LLC paperwork), and your filing date (the registration date of your corporation/LLC with the state).

Q: Why do you need to know my filing date for B.I.Z.?
A: Each state has its own rules regarding when and how often corporations and LLCs are required to file their annual report. By knowing when you formed your LLC/corporation, we can send you an email alert before your annual report is due.

Q: What particular deadlines does B.I.Z. track?
A: B.I.Z. will track and notify you of upcoming compliance deadlines with the state, such as your Annual Report (if required in your state). It will also alert you of upcoming tax deadlines based on your business type. In addition, if you provide information about your business licenses and permits, B.I.Z. will alert you when they’re coming up for renewal.

Q: Can I keep track of multiple businesses with B.I.Z.?
A: Yes, you can monitor multiple businesses from a single B.I.Z. dashboard. It’s an ideal for attorneys and CPAs to keep track of their clients’ businesses.

Do you need help registering a business or have questions regarding the process? Call the CorpNet.com team today for a free business consultation at: 888.449.2638

Should I Incorporate Now or At The Beginning Of The Year?

So you want to change your business structure from a sole proprietorship to an LLC or a corporation? Great! But you might be wondering if you should make it effective now, or wait to file your paperwork until the New Year.

If you’re one of those hyper-organized people, like me, you probably love the idea of having a neat and tidy January 1 effective date. After all, who wants to deal with filing two sets of tax forms—one for the period of time in this year when you operated as a sole proprietor and another for the part of the year the new structure was in place? But at the same time, I’ll bet you want to have all your ducks in a row right now, so you don’t risk filing too late and facing the same situation next year.

Sigh. What’s an entrepreneur to do?

Delayed Filing To The Rescue
Guess what? Most states offer a Delayed Filing option. It provides you a way to perfectly time the effective date of when your business officially changes to your new structure of choice.

Delayed Filing enables you to submit your application for whichever business structure you’ve chosen, but delay the actual incorporation date until a specific date in the future. In short, it lets you control your effective date of incorporation or LLC formation.

Whether you want to make a clean break with a January 1 start date or you have reason to schedule your new structure to take effect on some other date next year, you can get the paperwork out of the way now. That leaves you with one less task to take care when you need to be focused on marketing strategy, customer service, and all else.

Nice, right?

When To Submit Your Delayed Filing
You can use the Delayed Filing option at any time of the year. Check with your state to find out how far in advance you need to file. The requirements vary from state to state. Typically, you would need to file between 30 to 90 days before your requested effective date.
What To Do
When filling out the online forms to form an LLC or incorporate, indicate the number of days after filing that you want your business structure to be effective. When registering your business structure for a delayed start date, your Articles of Incorporation (or Articles of Organization) will need to reflect that effective date, as well.

Final Words of Insight
Even though the end of the year is near, you still have time to submit a delayed filing for January 1, 2017. You will, however, need to use the fast track service to expedite review and approval by your Secretary of State department in time for your intended start date.

Worried you won’t be able to handle the filing details with the busy holiday season upon you? Contact us! We’ll be happy to help you file your paperwork now, so you can get right down to business in the New Year.

 

Setting Up a Corporation – FAQ

Happy November! We are excited to bring you another post in our monthly FAQ series!

When starting a business, one of the first questions an entrepreneur must ask themselves is, “What entity type should I register?” Here at CorpNet, we are often asked to explain the differences between a C Corporation and an S Corporation, how to file a corporation, and even, “What is a corporation?” In this month’s FAQ post, our CEO Nellie Akalp answers all your burning questions about corporations!

Q: What is a C Corporation

A: A C Corporation is a standard corporation. It is considered a separate entity from its owners. This means that the corporation is responsible for any of its debts and liabilities. This is often called the “corporate shield” as it protects the owner’s personal assets from debts and liabilities of the business.

A corporation has a formal structure consisting of shareholders, directors, officers and employees. Every corporation must select at least one person to serve on its board of directors and officers are required to manage the day-to-day activities of the company.

As a separate business entity, a corporation files its own tax returns. As a C corporation owner, you’ll need to file both a personal tax return and a business tax return. In some cases, this can result in a “double taxation” burden for small business owners (see the question on double taxation below for more details).

Q: How do I create a C Corporation? 

A: To create a C Corporation, you’ll need to file the proper formation documents, typically called the Articles of Incorporation or Certificate of Incorporation, with your state’s secretary of state agency. You will also need to pay the necessary state filing fees. If you incorporate with CorpNet, you simply need to complete the online order form (or give us a call!). We’ll prepare the necessary paperwork and file it with the state.

Q: Who can form a C Corporation? 

A: There really aren’t any restrictions on who can form a C Corporation. Some states do require that the directors of a corporation are 18 and older, but there aren’t any age, residency, or other legal requirements for who can form a C Corporation. Keep in mind that the IRS places several restrictions on who can elect S Corporation status.

Q: What organizational roles are required in a C Corporation?

A: C Corporations have three groups: shareholders, directors, and officers. Shareholders own the C Corporation (via their shares of stock), yet the shareholders typically don’t manage the company. Shareholders do elect and remove directors, and can vote on major corporate issues.

The board of directors manages the affairs of the C Corporation, and can appoint and oversee officers. It’s the officers who are responsible for the day to day management of the corporation.

It’s possible to be a shareholder, director, and officer. In fact, in most states, you can be the sole shareholder, director, and officer for your C Corporation.

Q: What’s the minimum number of directors required for my C Corporation?

A: Most states allow just one director for a C Corporation, but you can have more. In some states, the minimum number of directors depends on the number of shareholders.

Q: What is double taxation?

A: Income earned by a C corporation is typically taxed at corporate income tax rates. Then, after the corporate income tax is paid, any distributions made to stockholders are taxed again as dividends on the stockholders’ personal tax returns. This is often called “double taxation” since corporate profits are first taxed on the corporation and then dividends are reported on the individual stockholder’s return.

Q: What is the difference between a C Corporation and S Corporation?

A: C Corporations are subject to double taxation as described above. A C Corporation entity is required to pay tax at the corporate level. An S Corporation is considered a pass-through entity for tax purposes. This means that the company’s profits and loss are passed through to the individual shareholder’s tax return (and each shareholder is typically taxed on the company’s profits based on their share of stock ownership).

Q: What are the benefits to forming a C Corporation compared with an S Corporation?

A: A C Corporation can offer greater tax flexibility. In addition, if you’ll be keeping the profits within company (as opposed to distributing dividends to shareholders), then the C Corporation can shield shareholders from direct tax liability.

Q: Can I form a Corporation with just one person?

A: Yes. A Corporation can have just one shareholder. Keep in mind that even if you’re the sole shareholder, you will still need to comply with corporate formalities such as director and shareholder meetings, and keeping meeting minutes.

Q: If I have multiple businesses, what’s the best way to legally structure them?

A: There are three different ways to structure multiple businesses. There are advantages and disadvantages for each approach – and the best structure will depend on your personal situation.

  • You can file an LLC or corporation for each of your businesses. This approach isolates the risk to each individual business, but involves maintenance fees and paperwork for each of the LLCs/corporations.
  • You can file one LLC or corporation, and then set up multiple DBAs (Doing Business As) for each of the other businesses. With this approach, you just need to pay your annual LLC/corporation maintenance fees for the LLC/corporation (and not each individual DBA). However, each DBA isn’t protected from the other DBAs. So if one DBA is sued, all the other DBAs under the main LLC/corporation are liable.
  • In the third approach, you can create individual Corporations/LLCs for each of your businesses and put them under one main holding Corporation/LLC.

Q: What is your Express Filing Service?

A: It’s a way to reduce your formation filing timeframe and get your corporation set up faster – sometimes as fast as 24 hours or even the same day! To understand the express filing timeline, it’s important to understand there are two different processing times: CorpNet and the state.

With the Express Filing Service, we’ll process your documents the same day (if submitted, Monday through Friday, before 4 pm PST). Depending on your state, we’ll hand deliver, fax, or send your documents via courier – whatever your particular state/county allows as the fastest option.

Then, the state office is instructed to process your filing as an expedited filing. State processing time estimates vary by state, and not all states support expedited filings. When you fill out your incorporation package online, you will see if the expedited service is available in your state and what the state’s estimated processing times are.

Do you need help registering a corporation or have a questions regarding the process? Call the CorpNet.com team today for a free business consultation at: 888.449.2638

                               

Which Candidate Will Be The Best President For Small Business?

Quite the question, right? But relax, I’m not here to get on a political soapbox and tell you who to vote for. Rather, I’m encouraging you to think about what’s important to you as a business owner and as an individual.

I’ve observed that Republicans typically tend to push for less regulation and encourage more business boosting initiatives than politicians in the Democratic Party. And the Democrats tend to push for initiatives that are in the interest of the middle class, the class that includes most small business owners. Of course, what candidates say they’re going to do and what actually happens don’t always match. Good intentions don’t always come to fruition because there are many obstacles that stand in the way of execution. Sometimes plans that sound too good to be true end up being just that after more research into their feasibility is done. And sometimes, sadly, candidates simply don’t follow through on their promises.

If you review each candidate’s website, you’ll see what their intentions are for small businesses. Below, I’ve listed what stands out to me:

Trump’s Pro Small Business Initiatives:
• Putting a stop to overregulation that makes it difficult to start and run a business.
• Lowering the business tax rate from 35% to 15%.
• Renegotiating trade agreements so American companies have a fair shake when pursuing doing business with other American companies.
• Increasing the production of American energy onshore and offshore (which potentially—eventually—would cut energy and transportation costs for all Americans, including small businesses).

Clinton’s Pro Small Business Initiatives:
• Stimulating small business lending by easing burdens for community banks and credit unions.
• Allowing entrepreneurs to defer student-loan payments with no interest while they start their businesses.
• Offering incentives to state and local governments to cut the red tape involved in starting a new business.
• Simplifying the tax filing process and creating a standard income tax deduction for small businesses.
• Cracking down on big businesses that don’t pay or late pay small businesses.

Devil Is In The Details
Clinton’s website goes into more detail about her proposals than does Trump’s, giving us some peace of mind that she has thought things through. But could her position on some other key hot button issues (like health care and raising the minimum wage) hurt small businesses in the long run. As for Trump, will what he proposes benefit the smallest of businesses or only large corporations?

According to the weekly reader poll, SmartPulse, in SmartBrief on Leadership, 69 percent of business leaders believe this year’s elections will either tremendously or moderately affect their businesses.

It’s clear the business community is tuned into and watching this presidential election closely.

Whether you’re starting a business or running an existing one, you should be, too. Think about what you want for the future of your business and your family—and vote on November 8 for the candidate you believe will work to fulfill your vision.

Photo: Adobe Stock

                               

Fall Tips To Help Your Business Have A Strong End-Of-Year Finish

Although most of the year has already passed and we’re now into the autumn season, don’t panic if your business has fallen a little bit behind on its goals. It’s not too late make changes that can help lead to a strong finish in 2016.

Whether you’ve just started your business or have been running yours for years, the key is to take action sooner rather than later—and to focus on efforts that will improve your bottom line now and into 2017.

 

  1. Nurture Customer Relationships.

If you’ve fallen out of touch with some customers, now’s the time to reconnect. Just be careful to do so with their best interests at heart, so you don’t come across as desperate or pushy. One easy way to start conversations is by emailing them an interesting article that has information they can benefit from. I recommend reaching out to each select customer individually rather than in a mass email. By personalizing your communications, you’ll make them feel special—and more engaged in revisiting the status of your business relationship.

Also, consider putting a formalized customer relationship management process in place, so there’s a method (rather than madness) in how you follow up with customers after certain actions, transactions, or lack of activity. A number of customer relationship management systems (at varying price points) are out there that can help you track customer activity and automate personalized communications.

A little goodwill and top of mind awareness can go a long way in generating more sales, so it pays to check in with customers regularly to show you care.

 

  1. Upsell, Upsell, Upsell!

Why would you not seize the opportunity to sell more products or services to the customers who have shown they’re raving fans of your brand? If you haven’t been sending emails or postcards or calling loyal customers with information about your other products and services, you’re missing sales opportunities.

Afraid you’ll seem pushy? You don’t have to fear that if you approach customers with the intention of helping them solve a problem or benefit in some way. As I mentioned before, showing you care fosters goodwill and can generate sales as a result.

 

  1. Streamline Your Administrative Activities.

Take a moment to review your administrative processes and discover where you might have excessive paperwork, duplicate work, and bottlenecks that are slowing down productivity. From accounts payables to billing to project management to customer data entry, look for ways to save time by streamlining tasks.

 

  1. Keep Spending In Check.

Although you should always be cognizant of your business’s spending habits, it’s especially critical now if you’re behind schedule on reaching your financial goals for the year. Look closely at your costs, and zero in on the “must haves” versus the “nice to haves” so you can cut out unnecessary expenses. Lowering costs has a direct impact on your profit and loss statement, so if even if you ignore all other suggestions, pay attention to this one!

 

  1. Make Sure You’ve Met Your Business Compliance Requirements.

Rather than discover you’ve dropped the ball, check to make sure all your t’s are crossed and i’s are dotted now regarding your business compliance responsibilities. If required, have you filed your initial and/or annual report and complied with your business license and permit obligations? Corporate compliance services like those from CorpNet can help you ensure you’re up to date and won’t be hit with penalties. Best of all, when the New Year begins, you’ll be able to focus on activities that will drive revenue rather than put out fires.

 

  1. Think Ahead About Your Business’s Direction.

Whether you’re just starting your business or planning to close it, taking care of matters before the end of the year offers some potential advantages.

If you plan to launch your business in 2017, you can avoid becoming over-stressed during the busyness of the New Year by taking advantage of CorpNet’s delayed formation filing process. It allows you to submit your formation paperwork before the end of the year, but make the effective date of your business the first of the year.

If you know you’ll be closing your business in the near future, you might consider taking care of filing for dissolution now. Doing so before year-end might help you avoid paying additional taxes and penalties.

 

Move Your Business Forward This Fall—And In The Future

Also, think proactively about what you can do to succeed in 2017. All of the things I mentioned earlier will help, but also consider reviewing your choice of legal structure for your business. By making a change to an LLC, S Corporation, or C Corporation, you have the opportunity to gain liability protection and possibly some tax advantages, as well.

By putting more effort into your customer relationships, running your business more efficiently and cost effectively, and paying attention to compliance requirements, you’ll be taking positive steps toward a strong finish in 2016 and a successful start to 2017.

Back to Basics: LLC or Corporation? Which Is The Better Choice For Your Business?

Both forming an LLC and incorporating your business safeguard you by protecting your personal assets if legal action is taken against your business. They also give your business a boost of credibility by having either “LLC” or “Inc.” behind your company name. But there are differences that could make one or the other the better choice for you.

I can’t emphasize enough the importance of knowing the pros and cons of the legal structures available to you before you decide which will serve your business most effectively.

 
The Low-down On LLCs

Many owner-managed businesses opt to form as LLCs.

LLC owners are referred to as “members,” who each own a certain percentage of the business. Single-member LLCs are uncomplicated from a compliance and management standpoint. When you have multiple members, however, you should have an operating agreement that documents who can make decisions and how transferring membership interests should happen if a member leaves, dies, or files bankruptcy. Some states require that the remaining members dissolve the LLC under the circumstance of a member’s leaving, death, or bankruptcy.

From a tax standpoint, you can choose to have your LLC treated in one of two ways.

  • As a pass-through entity, with the profits and losses of your business passed to your LLC members’ personal tax returns. If your business isn’t profitable, that will lower your personal tax obl
  • As an S Corporation, whereby only salaries and wages are subject to self-employment taxes (FICA and Medicare), not company profits taken as distributions to members.

Because there are notably less formation paperwork and compliance requirements with an LLC than there are with a corporation, business owners who want legal protection and tax flexibility without a lot of complexity find the LLC structure an attractive option.

One potential disadvantage of forming an LLC, however, is that you cannot sell stock to raise capital for your business. And if you seek funding from venture capitalists, you may get turned down because many will only invest in corporations.

 
Insight About Incorporating

Whether S Corporation or C Corporation, the owners of corporations are called shareholders. Their percentage of ownership corresponds to their percentage of shares in the business. Unlike with an LLC, it’s typically simple to transfer shares (ownership) from one person to another. That means the business can continue onward when shareholders leave, die, or sell their shares.

S Corporation

With an S Corporation, a business’s income, losses, and deductions pass through to its shareholders. Typically, the shareholders report corporate income on their personal income tax returns.

Unlike LLCs and C Corporations, S Corporations are limited to 100 members/shareholders. So while they can sell stock, their potential to raise capital in that way is somewhat limited.

While S Corporations require more paperwork and ongoing compliance than LLCs, they don’t come with as much formality as C Corporations.

C Corporation

Tax treatment of C Corporations involves what is often called “double taxation.” A C Corp pays corporate income tax on its profits, and then its shareholders pay personal income tax on the profits they receive as dividends.

C Corporations don’t have a limit on the number of shareholders that can invest in them, and they may be more attractive to outside investors.

Because C Corporations operate as separate legal entities from their owners, they provide more personal liability protection than other business structures.

Note that potential drawbacks to incorporating as a C Corporation are the higher formation costs, extra compliance requirements, and additional oversight they are subject to.

 
Do Your Due Diligence, Then Decide.

With both legal and financial aspects of your business affected by your choice of legal structure, make sure you carefully evaluate your options. I encourage you to seek professional expertise and guidance, so you fully understand the advantages and disadvantages of each structure.

In the meantime, you can get off to a great start by using the CorpNet Business Structure Wizard for gaining a better idea of the structure that might work best for you.

                               

Applying for an EIN – FAQ

We are excited to bring you another post in our monthly FAQ series!

This month, we are discussing an integral part of business formations – EINs. An EIN (Employee Identification Number) is also known as a Federal Tax ID Number or FEIN. Whether a corporation or LLC, obtaining an EIN is an important part of starting a business!

Check out our CEO Nellie Akalp‘s answers to your burning questions below:

Q: What is an EIN?

A: An EIN (Employer Identification Number) is like a social security number for businesses It’s how the IRS identifies your company and tracks its activities.

Q: Who needs to get an EIN?

A: Your business is required to get an EIN if any of the following apply:

  • Your business is structured as a corporation or partnership
  • You have employees
  • You have a Keough plan
  • You file any of the following tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms
  • You’re involved with certain organizations as defined by the IRS

In addition, you’ll most likely need an EIN in open to open a business bank account and credit card.

Q: I’m a sole proprietor without any employees, can I get an EIN?

A: Yes, if you don’t fall into any of categories listed above, you’re not required by law to have an EIN for your business, but you still can get one. The main advantage in filing for an EIN as a sole proprietor is that you won’t need to give out your personal social security number to clients, vendors, and other business contacts.

 

Do you need help applying for an EIN or have a questions regarding the process? Call the CorpNet.com team today for a free business consultation at: 888.449.2638

                               

By | October 6th, 2016|Business Banking, Business Filings, FAQ, Starting a Business|0 Comments

Is Fear of Failure Holding Your Business Back?

Ghosts, ghouls and goblins—oh my! While children clad in Halloween costumes may fear witches and zombies, many entrepreneurs are equally terrified of failure. But since failure is an inevitable part of launching and growing a small business, fear of failure could be holding you and your business back from success. Whether your business is already underway or just getting started, here are six ways to overcome your fear of failure:

  1. Go step by step. When we’re scared, it’s easy for fear of failure to paralyze us and we end up doing nothing. Instead of taking an all-or-nothing approach, break down what scares you into small, manageable parts. For example, if you’re afraid to approach potential investors for financing because they might say no, break it down into smaller tasks: researching potential investors, making a list of the most promising possibilities, finding connections on social media to introduce you, developing your pitch and so on. Going step-by-step, you’re more likely to succeed, and each success will build your confidence.
  2. Do things right. Failure often occurs when we’re in a hurry and take shortcuts. In your excitement to launch your business or your next big idea, it’s tempting to skip the boring stuff and jump straight to the fun part. However, paying attention to foundational elements such as writing a business plan, choosing the right legal structure for your business, trademarking your business name and getting a business license can greatly increase your odds for success.
  3. Get help. You’re less likely to fail if you get advice from more experienced business people, professionals and mentors who have “been there, done that.” They can help you foresee possible problems and figure out how to surmount potential hurdles. Perhaps even more importantly, they can build your confidence by providing encouragement and support. SCORE and your local Small Business Development Center (SBDC) are two great, free sources of business advice and expertise.
  4. Celebrate your successes. It’s human nature to be critical of ourselves and focus on everything we’ve done wrong. Unfortunately, this can lead to a crippling fear of failure. Instead, focus on all the things you do right. Take some time to write down risks that you’ve taken—not just in business, but also in your personal life—and the successes you’ve enjoyed as a result. Giving yourself credit for all the good things you’ve done will build your ability to take on challenges with less fear.
  5. Do what scares you. Did you notice I said “less fear” in the prior paragraph, rather than “fearlessly”? No one is fearless, no matter how they may look on the outside. True courage means doing what scares us in spite of our fear. Really, the only way to overcome fear of failure is to try new things, knowing full well that you might fail—and that’s OK.
  6. Learn from your failures. No matter how hard we try, we’re bound to experience failure, especially when undertaking something as challenging as starting and growing a business. Make failure your friend by learning from it. Step back and assess exactly what happened, why it happened, and what you can do differently next time to prevent it from happening again. The more you learn from your failures, the less likely you are to repeat them.