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2015

There is a common (mis)perception of the entrepreneur as a lone wolf. Many people think that the classic entrepreneur is someone who comes up with a genius idea and then executes it on his or her own.

 

Of course, nothing could be further from the truth.

 

The best entrepreneurs know that great businesses come from having great teammates. Consider these two quotes, from two of the best entrepreneurs:

 

Richard Branson: “I learnt from an early age the need [for] other team members as there is just too much for one person to do themselves. [And] what is the point of hiring talented team members if you don't give them the freedom to make the most of the chance you have given them?”

 

Steve Jobs: “I have learned over the years that you [need] really good people and you do not have to baby them. By expecting them to do great things, you can get them to do great things.”

 

This is as true for your small business as it is for those big businesses. If you want to succeed and grow, you too will need a variety of teammates who have the skills necessary to help you get ahead.

 

Here are the six teammates that I consider essential:


1. Banker: You well know by now that it takes money to make money. What you may not know is that there is a professional out there whose job is to help you get the money you need. That person is your banker. A good banker is your money professional.

 

He or she can help you analyze your business and help you prepare a loan package that can get approved. Indeed, working with your local banker early in the lending process is your best bet for getting a yes. (And by the way, my friends here at Bank of America have hired more than 1,000 small business bankers over the past few years.)

 

2. Accountant or Bookkeeper: Although often used interchangeably, these two professionals actually do different things (that sometimes overlap). A bookkeeper’s role is as it sounds – someone who keeps the books, issues invoices, keeps tracks of accounts payable, handles payroll and so on. An accountant can do many of these things, but typically has more experience than a bookkeeper, and his or her duties tend to be more strategic. For example, an accountant would likely set up a business’ accounting systems.

 

Click here to read more articles from small business expert Steve Strauss

 

Depending upon the size of your business, you will need one or the other to help you with the books, taxes, accounts, and so on.

 

3. Lawyer: Should you form your business as an LLC or an S corporation? Should you sue or settle? Did your competitor’s ad libel your business? Only a smart lawyer can answer these sorts of questions for you, and that is why you need one.

 

4. Insurance broker: An insurance agent represents one company whereas a broker represents many. Having a good broker on your team will help you get the right coverage and the best deal.

 

The final two teammates that I suggest you need are not “professionals” per se, but they sure are no less important:


5. A technology expert: In this day and age, you will save yourself untold amounts of time and headaches if you have someone whom you can call who can get your technology squared away.

 

6. A business assistant: If you don’t have an assistant, you are an assistant.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.


 

Bank of America, N.A. Member FDIC.

©2015 Bank of America Corporation

servicebusiness.jpgYou devoted years of sweat and financial equity to develop a loyal customer base for your service business. But it’s time to move on. How do you put a price on your reputation, your good will, and your expertise in your field? Read on to discover how, with careful planning and valuation, you can sell your business to a qualified buyer that can build on your service’s success.

 

Click to download the PDF.

No, of course you don’t want to think about legal issues surrounding your business, but then again, it sure is cheaper than having your lawyer think about them. If you don’t think about them now it is highly likely that you will have to think about them later.

 

Having practiced law for a decade, one thing that was clear was that my clients who were at least somewhat conversant in business law were almost always in better shape than those who weren’t. In my last article here in the community, I shared some of the essential legal issues that you should understand as a small business owner. Today I would like to dive deeper into a few more.

 

Intellectual property (IP): For many small business owners, especially in today’s Internet economy, their IP may be their most important asset. IP can be one of five different things:

 

1. Copyrights: A copyright protects the original expression of a creative idea. For example, this article is protected by copyright law. Copyrights protect your blogs, e-newsletters, photographs, art, brochure copy, and so on.

 

Something great about copyright law is that an original work is considered copyrighted once it is created. When I finished this article, it was legally protected. There is nothing you need to do to create a copyright, but registering your copyright at the United States Copyright Office does offer additional legal protections.

 

2. Trademarks: A trademark is a word, phrase, design, or symbol that identifies and distinguishes a business. It would, for instance, protect the name of your business or your logo. As opposed to copyrights, trademarks must be registered at the United States Patent and Trademark Office (USPTO.)

 

3. Patents: If you invent a wholly new process, machine, or product, you can apply for a patent at the USPTO. Note: Whereas obtaining a trademark is usually fairly simple and usually can be done without the aid of an attorney, patents are far more complicated and require legal assistance.

 

4. Trade secrets: A trade secret is information that has independent economic value by virtue of remaining secret; your customer list would be an example, or the way you make that delicious cheesecake in your bakery might be another. To be legally protected, you have to be able to prove that it really is a secret and that you work to keep it that way.

 

5. Goodwill: Goodwill is the good name and reputation of your business. If you ever sell your business, your goodwill has independent economic value.

 

 

Click here to read more articles from small business expert Steve Strauss

 

Employment law: Needless to say, legal issues relating to employees can and do take up a whole book. That said, there are a few employment law basics that you should know:

 

Most employees are considered at-will: This means that they can be fired at the will of the employer for almost any or no reason. Note, however, I said “almost.” That is because the rule is:

 

Do not discriminate: Legally, there are protected groups, and you cannot discriminate against them in your employment practices. Examples of federally protected classes include race, color, sex, religion, national origin, age, and disability. Also note that state and local laws often give additional protections to employees, so it would behoove you to always speak with your own lawyer in this regard.

 

Do not mislabel your staff: Is the person working for you an employee or an independent contractor (IC)? Many companies get into trouble because in order to save money, they label their help the latter when really they are the former. To be considered an IC, workers truly must be independent. They must be able to set their own hours, where and when they work, should use their own tools, have other clients, and so on.

 

Litigation: One of the main takeaways from my law practice was that lawsuits are poor ways to settle disputes. They are expensive, time-consuming, cumbersome, and emotionally draining. Yes, of course there are times when you need to sue, but often, settling will be the better course of action.

 

And of course, let’s agree that it is always a good idea to get a good lawyer. But at least now you will know the right questions to ask.

 

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 

 

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.


 

Bank of America, N.A. Member FDIC.

©2015 Bank of America Corporation

Top_States_for_Entrepreneurs_body.jpgBy Heather R. Johnson

 

New business owners have more company than ever before, according to the 2015 Kauffman Index, a detailed analysis of entrepreneurial trends compiled by the Kauffman Foundation. After a five-year downward trend, startups rose in 2015 by about 10 percent—the largest year-over-year increase in the past 20 years. The 2015 index shows that 310 of every 100,000 adults started a new business each month, up from an average of 280 in 2014.

 

Although Kauffman considers the increase “tepid” compared to historical norms, it indicates a rebound in entrepreneurial activity. Thirty two U.S. states posted higher startup activity this year compared to 2014, and not necessarily where you might think. Montana, Wyoming, North Dakota, Colorado, and Vermont had the highest level of activity, with an entrepreneur rate (percentage of entrepreneurs starting businesses per month for every 100,000 adults) that ranged from .40 percent to .54 percent. The high level of startup activity in these states is likely associated with the very high real GDP growth most of these states have recently experienced,” the report said.

 

California, home to tech startup epicenter Silicon Valley and new business leaders San Diego and Los Angeles, nonetheless fell nine points to rank number 14 on the state rankings. The Golden State showed a .39 percent rate of entrepreneurs.

 

Top_States_for_Entrepreneurs_PQ.jpgTexas ranked number 19, despite benefiting from startup havens such as Austin, Houston, and San Antonio. Washington, with its thriving information and communications technology sector, fell six points to number 38. Nevada, however, rose eleven places to hit the top 10, with an entrepreneur rate of .37 percent. Ranked the second most entrepreneur-friendly state by the Small Business & Entrepreneurship Council’s “Small Business Policy Index 2014,” Nevada offers a wealth of resources for entrepreneurs and imposes no income taxes.

 

Startup density

In addition to entrepreneur rate and startup density, the Kauffman Index also measured opportunity share, which indicates how many entrepreneurs started their business while unemployed. Unemployment indicates entrepreneurship out of necessity rather than opportunity. In Alabama, number 49 on the list, three out of every ten new entrepreneurs were previously unemployed, while in Idaho, number eight on the state rankings list, only one in 10 new business owners came from unemployment. In the U.S. overall, roughly eight out of every 10 entrepreneurs started their business because they saw market opportunity.

 

The Kauffman Index bases its findings on nationally representative sample sizes of more than a half million observations each year. It also analyzes administrative data that covers the spectrum of employer business entities. The study takes an industry-agnostic perspective, looking beyond specific industries to new business in general.


Bank of America, N.A. engages with Touchpoint Media Inc. to provide informational materials for your discussion or review purposes only. Touchpoint Media Inc. is a registered trademark, used pursuant to license. The third parties within articles are used under license from Touchpoint Media Inc. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.

 

©2015 Bank of America Corporation

 

 

Steve Strauss

Legal-Ease 101

Posted by Steve Strauss Sep 21, 2015

When you work in or own a small business, dealing with legal issues is something you have to do, whether you like it or not (almost always not). Interestingly, there actually seems to be an inverse relationship between one’s knowledge of the law and the legal issues he or she might become embroiled in; that is, the more you know, the fewer problems you probably will have.

 

Certainly this was true in my old law office. When someone got to the point where they needed to hire me, the problem had grown out of hand, and often, the potential client had exacerbated the situation by not knowing his or her rights and/or responsibilities.

 

This is not to say that you should play lawyer, indeed you should not. Having a lawyer who can advise you is smart business. But, a little knowledge can also go a long way. Here is what a small business owner needs to know:

 

Contracts: Three things are required to create a binding contract:

 

  1. An unambiguous offer
  2. An unambiguous acceptance of that offer
  3. A bargained for exchange (legally known as “consideration”)

 

Let’s look at each a little more closely:

 

Offer: “I will sell you these 20 widgets for $100.” That is a clear and specific offer. The other party can accept it, reject it, or counter offer. Only when he accepts it is the basis of a contract formed.

 

Conversely, if the offeror had said, “I have about 20 widgets. I might take somewhere in the neighborhood of $100 for them,” that is not an offer. Do you see the difference? It is too vague. In this case, the person being offered the deal really cannot know the terms of the contract if he or she were to accept. Is it really for 20 widgets? Is it actually going to be $100?

 

An offer must be clear and specific.

 

Acceptance: Similarly, the acceptance must be clear and unambiguous. “I accept that offer,” is an acceptance. “Let me think about it overnight” is not. “Would you take $75?” is a counter offer.

 

Consideration: This idea was really a conundrum in law school. But it need not be. It simply means that to have a contract, there has to be a bargained for exchange, a “this for that.” For example, “your widgets for my $100.” As long as there is an exchange, consideration is met.

 

So the equation is this:

 

Offer + Acceptance + Consideration = Contract.

 

Negligence: I once had a contractor in my office who was being sued for negligence by a homeowner because the house my client had built and sold to the homeowner had flooded. The problem for the homeowner was that this area had not flooded in more than 100 years, and my client had built an otherwise perfectly reasonable house. It was not his fault that an “Act of God” caused the house to flood.

 

So the basic rule is this: As a business owner, you are legally expected to act as “a reasonable person would under the same or similar circumstances.” Would a reasonable builder build with the potential for a flood in the situation above? No. That person who slips on ice in front of your store might have a case if it was reasonable for you to know that ice forms on your walkway. What would a reasonable man do in that circumstance?

 

Note that the law creeps in here in another way too: It is quite important that you create some sort of separate legal entity for your business – either an LLC or a corporation – because that protects your personal assets from business liabilities.

 

Employees: Small business owners can also have legal issues with regard to employees. The most common one is this: Is the staff member an employee or an independent contractor? In this era of the so-called “gig economy” more and more small business owners are classifying the people who work with them as contractors because it is cheaper for the business if they are not employees.

 

Click here to read more articles from small business expert Steve Strauss

 

So, are they contractors or employees? Contractors must be truly independent. Courts look at a variety of factors:

 

  • Who controls when, where and how the work gets done?
  • Does the person use his own tools and equipment or those of the business?
  • Does the person have other clients or customers?

 

The bottom line is that knowing even a little about the law can save your small business from a lot of legal problems.

 

 

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 


Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.


 

Bank of America, N.A. Member FDIC.

©2015 Bank of America Corporation

Touchpoint

5 Expenses Not to Skimp On

Posted by Touchpoint Sep 21, 2015

5_Expenses_Not_to_Skimp_body.jpgBy Heather R. Johnson.

 

From machinery to postage, small businesses incur a ton of expenses. It’s wise to shop around in certain areas—wireless plans and office supplies, for example—to save money. But in some cases, it pays to get the best even if that means spending more than you planned. Here are five areas where a small business owner should not skimp:

 

1. Legal advice. An experienced lawyer can help a small business navigate complex issues such as buying or selling a business and labor law conflicts. A lawyer may also review contracts and other documents. To ensure your business follows every letter of the law it pays to find a lawyer that will meet your needs long term. “The goal is to find the best cultural fit between you and the lawyer, and then look at price,” says Barron Wellman, an entrepreneur and business coach based in Orange County, California. “The most expensive firm may be the firm you have a cultural fit with, or it may not.”

 

2. An accountant. Doing your own taxes wastes countless hours and may cost you savings. CPAs stay abreast of the latest tax laws, know what exemptions apply to your business, and can properly value your equipment. “You must have a usable depreciation scale of equipment,” says Wellman. “CPAs know what the IRS will allow. They also do more than taxes: they can help you understand how to increase profits.”

 

5_Expenses_Not_to_Skimp_PQ.jpg3. Professional development. Just as entrepreneurs spend money to improve the business, they must also invest in themselves. Wellman suggests that business owners continually improve their leadership skills. Read a book, enroll in a webinar, take a weekend seminar, or invest in a few coaching sessions. “If a business owner acts like a manager, he’ll manage every good employee out of the business,” says Wellman.

 

4. Productivity software. If you have more employees than can fill a conference room, you may benefit from an internal communications platform. Platforms such as Yammer, Jive, Telligent Enterprise, and Salesforce’s Chatter, at $5 to $15 per employee per month, aren’t inexpensive, but they can greatly enhance productivity by efficiently tracking projects, enhancing communication, and eliminating long email threads. Depending on the industry, a small business may want to consider project management software, customer relationship management tools, or manufacturing enterprise resource planning (ERP) software.

 

5. Equipment. “If your business has equipment that’s going to get a high volume of everyday use, get a workhorse that will not have a lot of downtime for repair,” says Wellman. The equipment may be expensive to purchase, but keep in mind that continual repairs are expensive, too. Invest in top-quality products up front for long-term savings.

 

Bank of America, N.A. engages with Touchpoint Media Inc. to provide informational materials for your discussion or review purposes only. Touchpoint Media Inc. is a registered trademark, used pursuant to license. The third parties within articles are used under license from Touchpoint Media Inc. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.

©2015 Bank of America Corporation

By Joe DiNicola, Bank of America Practice Solutions Executive

 

Small business owners seemingly have endless decisions to make, whether they are getting their businesses off the ground or taking them to the next stage. With growth comes questions about how to staff and fund expansion, as well as when is the right time to pursue a loan. If it is the right time for your business, now more than ever there are a lot of options when it comes to getting the capital you need for your business. According to the latest Bank of America Small Business Owner Report, a growing number of small business owners applied for a traditional bank loan in the last year (24 percent), but nine percent turned to alternative funding sources.

There’s a lot to consider when deciding how to secure the capital necessary for your business, but with the right people and resources, it isn’t as daunting as you might think. I recently participated in a Google Hangout to discuss the current small business lending environment and what entrepreneurs should consider before borrowing. Here are some of my biggest takeaways:

  1. Ask for help. Mentorship is a critical component when preparing for the capital phase. Find out what worked for established peers whom you trust. Additionally, consider enlisting a CPA to help you in the process - according to the Small Business Owner Report, 73 percent of respondents sought an accountant or bookkeeper for financial advice.
  2. Negotiate financing. You always have the ability to negotiate deal terms, pricing or structure. Generally, you’ll have more room to negotiate if your FICO score is above 700. Whatever deal you strike, stay true to a payment plan that you can manage based on the cash flow of your business.
  3. Keep a potential interest rate hike in perspective. We don’t know when the Federal Reserve will raise interest rates, but it is just a matter of time. However, this isn’t necessarily a bad thing; higher interest rates are often a sign of a strengthening economy. Additionally, the increase will probably have little impact on your payments. How you choose to allocate the capital you receive is more important than a rise in interest rates. 


You can view the full discussion with myself, USA TODAY columnist Steve Strauss and tax and finance expert Barbara Weltman, moderated by CNBC contributor Carol Roth, by clicking here.


certifiedwomenbiz.jpgA recent report from the U.S. Chamber of Commerce's Center For Women in Business found that women-owned firms have grown at one and a half times the rate of other small enterprises over the last 15 years and account for nearly 30 percent of all businesses. These numbers suggest the significant role that women entrepreneurs play in the economy, leading many to become certified women-owned businesses as well. Read on to discover how carrying that distinction can open doors for these businesses when they compete for contracts in both the government and private sectors.


Click to download the PDF.

Women-owned-Thumb.gifWomen-owned small businesses are becoming an engine of growth for the U.S. economy.


According to the Bureau of Labor Statistics, they’re projected to be the source of more than half the new small business jobs created by 2018. Read on to see how else women-owned companies are driving growth and where they are finding success.


Click here to view the infographic.

 

 

 

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for printing by clicking here.


womenbiz.jpgWhether it comes about because of a layoff, the desire to be the boss, or simply the need for more flexibility, women are creating businesses at unprecedented rates. Today, they are majority owners of 8 million companies that contribute $3 trillion to the U.S. economy. And women who have had successful first careers find that their corporate experience is invaluable in starting and running their own ventures. Read on for some examples of women who are finding success as small business owners.


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