The ESHIP Summit Seeks to Foster Entrepreneurship – That’s Where You Come In

Registration for the 2019 ESHIP Summit just opened to the general public. If the Summit isn’t on your summer radar, readjust your scope. For those who support entrepreneurs and take a collaborative, system-wide approach to fostering entrepreneurship, the ESHIP Summit is the place you need to be.

The ESHIP Summit works to connect people and resources – and break down silos – in entrepreneurial communities, or “ecosystems,” around the country.

As an entrepreneur yourself, you know what it’s like to build a business from the ground up. Most likely, you had help along the way. Attendees at the Summit are that help. They believe in inclusivity and equity and are exploring new models, tools, resources, and knowledge for entrepreneur-led economic development. They understand the value of entrepreneurship and how innovation can come from the people directly in the center – the makers, doers, and dreamers. That’s you.

The Summit is another effort at removing barriers to entrepreneurship. Entrepreneurship doesn’t stop five or six or 20 years after you opened your doors – it’s a process. It’s ongoing. Of course, you don’t need us to tell you that.

Come share your ideas with the organizations and leaders working to foster entrepreneurship in your community. Talk to fellow entrepreneurs about their own struggles and successes. But remember: attendees must be ready to come to contribute ideas, talent, tools and case studies to advance the field of ecosystem building. There are no panels or keynote speakers. This is no typical conference. You’ll work with like-minded people – or conversely, people with different viewpoints from yours – on new ways to further the emerging field of ecosystem building.

Over the course of three days, attendees will collaborate and share ideas on innovative programs as well as participate in small group discussions. The goals of the ESHIP Summit include:

  • Helping each other advance the work in our communities.
  • Authoring the ecosystem building vision, value proposition and vocabulary for this emerging field.
  • Creating interlocking networks of ecosystem building professionals and the national resource organizations who support them.
  • Better defining ecosystem building metrics and outcomes.
  • Developing approaches to engage all stakeholders in a community.
  • Sharing examples of effective ecosystem building strategies.

At this year’s Summit, we’re kicking off a multi-year delivery process to begin to bring solutions to the ESHIP goals to life.

If breaking down barriers to further entrepreneurial growth is your passion, check out the ESHIP Summit website for more information about registering for the 2019 ESHIP Summit.

6 Considerations to Help You Determine Your Salary

< Back to Must Reads

6 Considerations to Help You Determine Your Salary

There’s so much to prepare for and track on the financial side of your business. Yet one thing that’s easy to overlook is your salary.

Regardless of whether you’re selling goods or services, it’s not as simple as making a sale, then pocketing cash.

Instead, like other facets of your business, it’s best to approach your salary with some planning and thought. We’ll get you started with 6 considerations to help determine how much you should pay yourself.

Follow your business structure

Depending on how you’ve set up your business — whether as an LLC or a corporation — will dictate the IRS owner compensation guidelines you should follow.

For example, if you’re working as a sole proprietor, you don’t have many financial guidelines to follow — but that also means you’re on the hook for any liability that may occur.

On the other end of the spectrum, if you’ve established your business as a corporation, you’ll need to operate a payroll and pay yourself (and any other employees) a salary. Profits are attributed to the business, not the entrepreneur. And, each year, you’ll need to file a corporate income tax return.

If you run an LLC, you’re more in the middle. You’ll already have a business bank account, so, once you determine your salary, you can simply pay yourself and deposit that money into your bank account. We’ll talk more in a moment about the importance of keeping your finances separate.

Establish a baseline

Once you understand any salary or other financial requirements you’ll need to follow based on the type of business you run, the other key factor to determining your entrepreneurial salary is knowing how much you need to make.

If you haven’t already, make a list of your living expenses, including housing, utilities, other bills, food, insurance and transportation. That gives you a baseline of what you need to make to ensure your expenses are covered.

It’s not uncommon for entrepreneurs to forego paying themselves in the early days of their businesses. That’s a decision that each entrepreneur should make depending on key factors like cost of living, business revenue and, if applicable, start-up financing. If you know that starting a business is something you want to do, it’s a good idea to go ahead and start setting aside some money (if you haven’t already) that can help provide a cushion as your business gets up and running.

Set your pay guidelines

At some point, it’s likely you’ll have at least a few employees. Prepare for that milestone by establishing your business’s pay guidelines (and start by using them on yourself!)

Start by doing some market research on comparable salaries in your industry. Then, once you’ve established base salaries for your company’s positions, decide other factors like when and how you’ll give raises. It’s important to be thoughtful and fair when determining and adjusting compensation, which is why it helps to put at least a basic plan in place before you need it.

Plus, having pay guidelines in place can help protect your business, too. If you experience sudden success and your revenue increases accordingly, it’s easy to overpay yourself. There’s no doubt you deserve the money, but like anything else in business, it’s worthwhile to be deliberate and methodical about your decision-making, including your salary. That way, you don’t inadvertently shortchange your business or run into other potential problems.

Keep your personal and business finances separate

We can’t emphasize how important it is to open a business bank account and use that for any business-related expenses. Not only is it easier to compile the data you’ll need come tax time; you can also more easily monitor your company’s performance and more proactively approach challenges like a decline in revenue.

Talk to an accountant

Don’t hesitate to run your salary plan by an accountant, especially as you’re getting started. Accountants are invaluable in helping you make sure you’re following all applicable tax-related guidelines and that you have the processes and systems in place to avoid costly mistakes.

Freelancers, this means you!

Not everyone considers freelancers entrepreneurs, but we certainly do. And we understand how easy it is to collect payment for your work, then simply deposit it and not give it much thought. Some freelancers take the extra step of withholding applicable taxes from each payment, since w9 income isn’t taxed. Yet there’s no reason you shouldn’t follow the same steps listed above to determine your salary. Open a business bank account for yourself and make all of your deposits there, then pay yourself a biweekly or monthly salary. Track all of your business expenses so that you can qualify for applicable tax deductions. You might also want to talk to your accountant about shifting to quarterly estimated taxes, which you’ll pay based on the previous year’s earnings. You’re much less likely to get a nasty surprise come tax time if you’ve been proactively paying your taxes. Plus, understanding all of your business expenses like taxes will ensure you can pay those while also paying yourself.

If you find yourself overwhelmed and not sure how to approach your own salary, help is a click away. Register for our free Kauffman FastTrac course, which gives you all of the information you need to start your business. That includes setting realistic financial goals (like your salary) and determining your steps to profitability. Plus, the course is self-paced, so you can start any time.

9 “Boiler Plate” Contract Terms You Should Know

< Back to Must Reads

9 “Boiler Plate” Contract Terms You Should Know

Entrepreneurs sign a lot of contracts. From starting your business to hiring workers and signing up clients, contracts are everywhere. And while you may be an expert on your business plan, you’re probably not an expert on contract terms–especially the “boiler plate” terms found near the end of most contracts.

While it may be tempting to skip over those boring terms, you really need to read them since they can have contract-wide implications.

Below is an intro to nine of the most common terms.

1. Entire Agreement

When signing a business contract, you usually want that contract (and that contract alone) to govern your deal. Accordingly, this provision will say that “this agreement” controls the deal and that all prior negotiations, documents, etc., are not valid. If you have addendums or other documents that should be binding on the parties, it is usually a good idea to reference them here (or somewhere in the agreement).

2. Amendment

This provision usually says that a party may not amend the contract without the other party’s prior written consent. Further, if consent is provided, the amendment must usually be in writing.

3. Waiver

A “waiver” occurs when one party breaches the agreement and the other party doesn’t enforce their rights. For example, your client may pay you 35 days late, but you don’t charge them interest (i.e., you are waiving your right to enforce the contract). This provision will say that the waiver is only binding if it is in writing and that one waiver doesn’t mean you will waive future breaches.

4. Severability

A severability provision usually says that if a court rules a certain provision too broad to be enforceable (or unenforceable in its entirety), that the court should reduce the provision to make it enforceable (or in the case of removing an entire provision, the court should still enforce the remainder of the agreement). This is helpful to ensure the entire agreement is not invalidated due to one small issue.

5. Assignment

This provision usually says that a party may not assign their rights under the contract (or the contract itself) to a third party without the other party’s written consent. Further, the assignment must usually be in writing. The assignment provision can be mutual or unilateral. If it is unilateral (i.e., only one party can freely assign), then you should consider whether that makes sense for your deal.

6. Notices

Most contracts contemplate various “notices” that must be provided from one party to the other (for example, a termination notice). A notice provision will set out how the notice should be sent (i.e., overnight, via email, etc.), to which address it must be sent, and when it will be deemed delivered. Often, if a party’s address changes, it will be required to update the other parties to the contract.

7. Governing Law

There are two parts to governing law provisions. First, which state’s laws apply. You may not know this, but a court in Florida can use Alaska law to resolve a dispute (this applies to all states). Thus, stating which state’s law will apply will help the parties to understand their rights up front. The second part is what court the parties must use. This is usually called “jurisdiction” or “venue.” This section requires the parties to use a specific court to resolve their disputes. In this regard, you should be careful not to agree to use a court far away from your place of business.

8. Attorneys’ Fees

In America, the general rule is that the losing party in court does not have to pay the winning party’s attorney’s fees. However, you can include a provision in your contract that requires the losing party to do so. If you are more likely to sue the other side, then you may want to include this. If the other side is more likely to sue you, then you may not want to include this.

9. Counterparts & Signatures

This provision usually says that if the parties sign different copies of the agreement, they should be treated as though they were just one copy. However, in our modern business world, more and more contracts are being signed using electronic signature platforms like DocuSign and HelloSign. Thus, the counterpart language isn’t as important. However, it is often a good idea to say that the parties may use digital signatures and that digital and photocopies of the agreement should be treated like original paper versions.

Looking for more?

The best way to start a new business and actually succeed is to get help from other professionals. To do that, you can enroll in the Kauffman Foundation’s FastTrac program at www.fasttrac.org for free courses and materials to help you write your business plan and start your business.

Business Formation: What Are They and How to Choose One

< Back to Must Reads

Business Formation: What Are They and How to Choose One

LLCs. S-corporations. C-corporations. Having trouble understanding the alphabet soup of business formation? You’re not alone!

Yet deciding which type of business formation (also known as business or legal structure) works best for your start-up is among the most important decisions you’ll make, especially when it comes to your finances and taxes, as well as your personal liability.

“Your business structure affects how much you pay in taxes, your ability to raise money, the paperwork you need to file and your personal liability,” according to the Small Business Administration.

And we’re here to help you decide the business formation that’s the best fit. First, let’s take a look at your options. Then, we’ll ask you a few questions to help you determine your course of action.

1. Sole proprietorship

Think of sole proprietorships as the easy button of business formations. You simply start doing business under your own name. Some states may require you to have a business license or a local permit, depending on your type of business, but there aren’t any filing requirements beyond those.

Because sole proprietorships are so easy to start, they’re traditionally the most popular type of business. According to the Small Business Administration, more than 70 percent of businesses in the U.S. are sole proprietorships.

You’re probably saying to yourself, “Where’s the catch?” And here it is. As a sole proprietorship, you don’t have any liability protection. That means your personal assets can be used to satisfy a business debt or legal judgment.

Plus, if you hire employees and they incur any sort of liability, you’re responsible for it, and your personal assets could be at risk.

Here’s another important financial consideration of sole proprietorships: the IRS will view you, the individual, and your business as one entity. While that means you get to avoid filing sometimes complicated corporation taxes, you miss out on deducting corporation benefits and have to pay a self-employment tax.

2. Partnership

From both a paperwork and operations standpoint, partnerships are straightforward. States don’t require specific partnership documents, but it’s a good idea to create a partnership agreement that’s reviewed and signed by all participating partners. When opting to establish a partnership, you have three options:

  • General: This is your basic partnership, as detailed above. Although paperwork and filing requirements are minimal, you should check with state and local regulations to see if you need any licenses or permits to operate.
  • Limited: Think of a limited partnership as a general partnership with limited liability protection. To create a limited partnership, one partner is designated a general partner with unlimited liability. Then, other partners are limited partners, which means their liability is the same as their investment. These limited partners are typically silent partners—they invest in the business but don’t involve themselves in day-to-day operations. Limited partnerships are pass-through tax entities, so taxes are paid at the individual level.
  • Joint Ventures: These are formed by two or more people who are working on a single project. As a result, they’re typically more limited in scope and length of time than a partnership, which may continue indefinitely. According to Nolo.com, the necessary elements of a joint venture include “an express or implied agreement; a common purpose that the group intends to carry out; shared profits and losses; and each member’s equal voice in controlling the project.”

Additionally, joint ventures are treated differently when it comes to taxes. Parternships are pass-through tax entities, while joint ventures can be taxed as a corporation or a partnership.

Partnerships, like sole proprietorships, don’t offer much in the way of liability protection. You’ll find the specifics of partnership liability covered by various state regulations, but most of the time, each partner has unlimited liability for any business debts or lawsuits, including those that result from actions of another partner.

The SBA has some helpful guidance on when partnerships are the best fit, including for businesses “with multiple owners, professional groups like attorneys, and groups who want to test their business idea before creating a more formal business.”

3. Limited Liability Company (LLC)

As David Ingram wrote for LegalZoom, “limited liability companies combine the advantages and disadvantages of corporations and private partnerships.”

In an LLC, business owners — referred to as members — aren’t personally liable for business debts or legal judgments. So, when you open a business bank account or take on a debt, the LLC is responsible for it, not the individual members. Additionally, LLC members have the flexibility to decide if they want to be taxed as a partnership or a corporation, unless your LLC has only one member. Then, the LLC is taxed as a sole proprietor. There’s no limit to the number of members your LLC can have, but LLCs can’t issue stock. LLCs do, however, have significant flexibility when it comes to deciding how to allocate profits and losses, which is defined in an LLC’s operating agreement.

LLCs require some set-up, but if you’re forming a simple LLC, this can usually be completed for a few hundred dollars. Be sure to check with your state first, which may have standards of LLC formation that will guide your next steps.

4. Corporation

And that brings us to corporations, which are the most complex — and expensive — of your business formation options. Two types of corporations exist: C-corporations and S-corporations. C-corporations are considered the default because they have fewer requirements. However, S-corporations typically save on taxes because they’re treated like a sole proprietorship. “The profits (or losses) are passed through the S-corp to the shareholders, and are only taxed to the shareholders and reported on their personal tax returns,” wrote Edward A. Haman, Esq., for LegalZoom.

Both types of corporations have a lot in common. To create one, you file articles of incorporation with your state’s Secretary of State. Corporations are required to have elected directors (typically chosen from among a corporation’s owners, or shareholders), and you may have to include these names in your paperwork. Once the corporation is running, profits (or dividends) are distributed to shareholders according to the number of shares they each own. Additionally, corporation owners have limited personal liability protection because the corporation is considered a separate entity from the owners.

C- and S-corps are required to do the following:

  • Issue stock
  • Adopt by-laws
  • Hold annual director and shareholder meetings
  • Maintain meeting minutes
  • Issue written resolutions for any significant decision
  • File annual reports with state government
  • Pay annual fees

And regardless of which type of corporation you choose, you’ll want to be sure to obtain applicable permits and licenses; register with the IRS, state and local tax agencies; and open a corporate bank account.

4. Questions to help determine your business structure

Whew! That was a lot to cover. But, we’re guessing that you might already have an idea of which business structure will work best for you.

To help solidify your decision, consider these four questions:

  • Can you cover your liability? Sure, it’s anxiety-inducing, but you need to do some worst-case planning. If you incurred a significant debt or faced a legal judgment, are you in a position to cover it? If not — or if you have personal assets that you want to protect — then you’ll likely want to establish an LLC or a corporation.
  • Do you need financing to start your business? Your business structure can play a key role in how easy it is to get financing. For example, most investors might be more hesitant to invest in a sole proprietorship because of a lack of formal guidelines. If you require a large amount of capital to get your business up and running, you may want to opt for a corporation, which gives investors an opportunity for an initial public offering (IPO). At the very least, consider a limited partnership, which helps protect limited partners and also frees them from the responsibility of making business decisions.
  • Will you offer stock? If your answer to this question is “yes,” your way forward is clear: you need to start a corporation. Because S-corps are more complex, you can always start with a C-corp and later file the required paperwork to shift your business to S-corp status.
  • Do you plan to hire employees? Your workforce is another important factor when considering liability. If you run your business as a sole proprietorship, for example, you’ll not only be personally liable for any business debts or judgments; you’ll also be responsible for any liability that results from employee actions. Even if you don’t start with employees but you know you’ll be hiring soon, consider at least an LLC to help protect yourself and your assets

If you’re feeling a bit overwhelmed by your options and how best to move forward, don’t stress — this is a big decision, and not one you want to take lightly. It might help to consult fellow entrepreneurs to get their input. You might also want to speak to a lawyer and accountant, who can make knowledgeable recommendations based on your specific situation.

You do have some degree of flexibility in terms of changing your business structure, especially if you start with something simple like a sole proprietorship. However, if you have immediate investment or employee needs, you may want to go ahead and start with at least an LLC, which gives you a slightly more formal structure without the myriad requirements and expenses of a corporation.

And remember: more help is just a few clicks away. Kauffman FastTrac, a free online course, gives you all of the information you need to start your business, including determining your business structure. Register and start the course anytime.

5 Tips to Finding the Right Business Attorney

< Back to Must Reads

5 Tips to Finding the Right Business Attorney

If you want to start a business, you need to find a good business attorney to help with any contracts, SOWs and business formation, etc. And while there are over a million practicing lawyers in America, it can be hard to find one that is perfect for your new business.

In this post we’ll look at five things to consider when searching for an attorney that can help your business achieve its goals.

Finding the Right Experience

Perhaps the biggest thing to consider is whether your attorney has the appropriate experience for your business. A common misconception is that all attorneys do the same thing. That can’t be further from the truth. Some lawyers never step foot in a courtroom, while others are there every day. Some lawyers are experts at contract language, while others are experts at resolving DUIs. And if you pick the wrong kind of lawyer for your business, you are bound to end up with poor (or at least not great) advice.

For that reason, always ask about whether your prospective lawyer has experience representing businesses. From there, ask if they have experience working with your kind of business. Some business lawyers are experts at counseling restaurants, while others might be experts working with construction companies.

Understanding Their Pricing

Most lawyers charge by the hour and, depending on where you are, their rates can be as low as $100/hour or as high as $1,500/hour (the average is around $250/hour). If your lawyer charges hourly, be sure to ask for an estimate on what you should expect for each project and keep tabs on how much time they’ve put in since the last time you spoke with them.

Although hourly is still the standard, more and more business lawyers are offering fixed fees and some are even offering subscription legal services. For many small businesses, and especially new businesses, this is a much better approach because then you know exactly what you’ll be paying your lawyer.

Understand How They Work

Just like with any professional, you should make sure your lawyer works the same way you work. Are they responsive to emails, or do you need to pick up the phone and call them? Can they process signatures electronically, or do they need you to come to their office to sign things? Will they invoice you electronically, or do they require you to mail in a check after receiving a paper invoice? All of these items should be discussed up front to make sure you are not hiring someone that will not work like you.

Get a Referral

By far the best way to find a lawyer is to ask your fellow business owners for a referral. You should start with other entrepreneurs that own businesses similar to yours and then branch out as needed. If you can’t find one that way, consider contacting your local bar association or law school as they can probably provide a list of attorneys. And obviously you can always search online.

Tips for Managing Your Relationship

Many business owners avoid talking with their attorneys due to their high fees. But the truth is that spending money on lawyers up front can help you avoid disputes and problems later. And if you don’t call them until the dispute or problem arises, you’ll almost certainly pay your attorney more to fix things than you would have up front.

From there, be sure to keep an honest and open dialogue with your attorney. Discuss your goals, ask questions about things that confuse you, and never ignore fee discussions. The more transparent you are with your lawyer, the better they can help you.

Keep Asking Questions!

Working with legal documents is just one of many important things you’ll have to do to start and grow a successful business. If you want help with all of the various things, you should enroll in the free FastTrac program offered by the Kauffman Foundation. Their free resources can help you succeed. Learn more and sign up at www.fasttrac.org.

Do You Have Business Plan Writer’s Block? Start Here

< Back to Must Reads

Do You Have Business Plan Writer’s Block? Start Here

A business plan might be one of the most important documents you’ll write as an entrepreneur.

Yet it’s a task that’s often put off (or never completed) because it’s not easy to do.

A business plan is a critical element of your business’s foundation. Think of your business idea as a destination. Your business plan is the map that helps you get there (ideally without too many detours or unexpected stops).

We’ll help get you started by outlining some of the key sections and information you should include in your business plan, regardless of your industry. And if you need additional help, we’ll share some resources that will guide you from start to finish.

Why You Need a Business Plan (Even If You’re Not Seeking Financing)

There’s a common misconception that you only need a business plan if you’re seeking funding to launch your business, whether from a bank, an investor or another source.

If you need an investment to start your business, you’ll need a strong, concise, polished business plan to help potential investors understand what you’re doing and why your business is a viable investment opportunity.

On the other hand, if you’re among the 81 percent of entrepreneurs who don’t pursue a bank loan or venture capital to start your business, it’s still a good idea to not only write a business plan, but also revisit it on an annual basis to see how your business (particularly your operations and finances) are evolving and ensure you’re on the right track toward achieving your long-term goals.

Even if you’re the only person who sees your business plan, it will help you gather your thoughts, figure out how you’ll meet your goals and document that critical information. There’s something official about a business plan that helps validate your idea and approach.

Remember, too, that a business plan is also a living, evolving document. It will likely change as your business grows, which is why we recommend revisiting your business plan each year to monitor how the plan — and your business itself — is progressing.

Seven Sections to Include in Your Business Plan

Business plans typically include seven sections:

Executive summary — This is where you summarize your business plan and also lay out what you need to launch your business, i.e. funding. Executive summaries are notoriously tricky because they need to be short (usually no more than one page in length) but also compelling. We recommend writing the rest of your business plan first and saving the executive summary for last.

Business description and organization — Detail your business, including its industry, operations, your chosen business structure and the products and/or services you’ll offer. Opt to include information about your company’s executive team here (if you have one) or you can add it to the “Business Operations and Management” section. Consider also including information about  the factors that will help make your business profitable.

Market strategy — This is where you delve into your target market, including its makeup and how your business fits into the landscape. Use this section to also take a closer look at your customers: who and where are they? Why will they support your business? Introduce your differentiators and what will help you stand out from the competition. Consider also including information on projected market share and product pricing and distribution.

Competitive analysis — You might find some slight overlap between this and the previous section, but a competitive analysis is a more detailed look at your competition, including their strengths and weaknesses. Highlight any advantages or differentiators your business has over the competition that will not only help you grow your customer base, but also limit disruption to your business from existing or new competitors.

Product design and development — What are the details of your product’s design and how it will be developed and produced? Consider including helpful visuals that will help readers of your business plan better understand the product. Then, detail development of the product itself, as well as how the product’s marketing strategy and the business itself will develop over time. The staff of Entrepreneur Media, Inc., authors of Start Your Own Business, recommend including “a schedule that shows how the product, marketing strategies and organization will develop over time. The schedule should be tied to a development budget so expenses can be tracked throughout the design and development process.”

Lastly, a quick bit of good news. If your business offers a service instead of a product, you’ll only need to focus on the development part of this section.

Business operations and management — Share how your business will run from day to day. If you haven’t yet introduced your management team, do so here and share information about their qualifications and responsibilities. Will you have employees or a support staff to help run the business? What additional capital and expense requirements need to be met to keep your business running?

Financial outlook — Put down the Magic 8 ball and grab your calculator — it’s time to crunch some numbers. This is where you demonstrate your business’s profitability, both in the short- and long-term. You’ll want to include income statements (monthly for the first year, quarterly for the second and annual for the following years), a cash-flow statement and a balance sheet. Choose how far into the future you want to project your company’s finances, but it’s a good idea to outline at least three years’ worth of financial information, especially if you’re seeking start-up capital.

Two Common Places You’ll Get Stuck (And How to Move Forward)

Writing a business plan is hard. And it’s likely that, at some point, you’ll get stuck. We’ve identified the two most common sources of business plan writer’s block and how you can keep moving forward.

Getting started — If you find yourself hesitant to get started when facing a daunting project, you’re not alone. There’s an assumption that entrepreneurs are fearless and can easily tackle any challenge that comes their way. The reality, however, is that entrepreneurs fight anxiety and fear like everyone else.

Writing a business plan can seem like climbing a mountain. And as a result, many entrepreneurs completely avoid the task because they’re overwhelmed. If you find yourself struggling to start your business plan, it’s important to first recognize that you’re not alone.

Then, take a step back and examine ways you can make the task ahead a little easier. What about breaking the business plan up into the sections mentioned earlier and focusing on one at a time? By dividing a large project into smaller, more manageable pieces, you might find it easier to pick a place and dive in.

Maybe you feel like you have too many thoughts and details running through your brain and it’s tough to get everything down on paper. If you haven’t already, try a brain dump. Make notes or an outline to help you approach your business plan from a more organized mindset. You might also spot gaps in your information that you can fill before or as you start writing.

One last tip? Approach your business plan like a writer does a first draft. Your business plan isn’t going to be perfectly polished out of the gate. Instead, the bigger goal is to simply get everything documented and in a readable format. Then, consider giving your plan to a couple of trusted friends or colleagues so they can help you edit before you distribute your plan on a more widespread basis.

Financial projections — As you try to project revenue, expenses and losses, you might find yourself wishing for a fortune-teller. After all, how can you predict earnings and costs for the next three months, let alone three years, especially if you haven’t yet launched your business?

First, understand that much of the information in this section will be a guess, albeit an educated one. There’s no way you can know exact numbers, especially years ahead. What you’re instead trying to show is that your business will eventually be profitable, and, based on what you said earlier in your plan about your market and business operations, here’s how.

As you work on your financial projections, be realistic. If you’re seeking start-up funding, you don’t want to mislead prospective investors with wildly optimistic conjectures about their ROI. Instead, stick to the information you know to make your best (modest) financial guess.

If you get stuck here, try reaching out to your accountant. They might be able to help take the data you’ve compiled so far to organize it into the elements you’ll need to complete this section.

5 Ways to Keep Burnout At Bay

< Back to Must Reads

5 Ways to Keep Burnout At Bay

Grueling schedules, little to no time off and the pressure of juggling a myriad tasks, details and responsibilities — the life of an entrepreneur is nothing short of challenging. And when launching or running a business becomes too much, entrepreneurs risk meeting an intimidating adversary: burnout.

The thing about burnout is that it affects entrepreneurs in different ways. Some entrepreneurs facing burnout simply need a few days to recharge. Other, more severe cases may make it difficult for entrepreneurs to continue with their businesses.

Burnout can strike at any time, but it’s most prevalent at the end of the year. You’ve worked your tail off the last 12 months, maybe even without a break. Plus, the pressure of a new year is looming: what will you accomplish? How will you grow? What’s the next step?

Here’s some good news: burnout can be avoided. The best way to minimize your risk of burnout is to take a step back and examine your schedule, your workload and your body’s natural rhythms. We’ll take you through five tips that can help you steer clear of burnout and get the downtime you need without compromising your business’s productivity.

Let’s go ahead and start a little self-care before we dive in. Grab your favorite beverage, settle in your comfiest chair, and, once you’re settled, continue reading. It’s time to banish burnout.

1. Take a day off.

Entrepreneurs are known for working long hours and crazy schedules, and for good reason — there’s always something to do when you’re running your business or preparing for launch!

Yet even when you’re feeling overwhelmed by your to-do list, you’ll get more done (and help protect your health) if you schedule time off. For example, if you regularly work seven days a week, can you give yourself at least one day a week to relax and recharge?

It’s also not a bad idea to look ahead and identify opportunities to take a longer break. Depending on the type of business you run, the holiday season is a prime time to take a few days off, since business in many industries tends to slow in the week between Christmas and New Year’s.

One more tip: try to schedule a day off after a particularly grueling busy period. Maybe you’ve spent weeks preparing to exhibit at a convention or tradeshow. Or you’re preparing to launch a new product or service. Or your business has a busy season, and you’ve done all you could to keep things running smoothly and efficiently. Once that milestone is complete, try to take at least one day to rest, spend time with friends and family or enjoy a favorite activity (more on that later in the post).

2. Create a support system.

Whether you work from home, your own office or a coworking space, there’s no denying that life as an entrepreneur can be lonely. That’s why building a support system of trusted friends and fellow entrepreneurs is important.

Sure, you can use members of this group as a sounding board when you’ve hit an obstacle or are developing a new idea. And if you feel yourself becoming overwhelmed by your business and approaching burnout, reach out to those in your support system to vent and clear your mind. You’ll likely find that the entrepreneurs you know have been in a similar situation and can throw you a much-needed life preserver when it feels like you’re drowning.

If you feel your enthusiasm for your business waning, it might also help to surround yourself with energetic entrepreneurs that can reinvigorate you and help you remember your “why.” Try looking for entrepreneurial meet-ups in your area, including 1 Million Cups, Creative Mornings or start-up showcases.

3. Delegate.

It’s not always easy to cede control of tasks to others, but part of running a successful long-term business is the ability to delegate.

Take a close look at your workload and how you’re spending your time. If you feel like you’re in perpetual catch-up mode or you can’t seem to get ahead of your business curve, it might be time to bring in some help. Not everyone can afford to add full-time employees to their business, especially in the early days.

Instead, look at the work you want to delegate, then examine your options. Maybe you need help with scheduling and administrative tasks. Consider a virtual assistant who could help you remotely and also allow for a smaller initial investment than, say, bringing on a full-time business manager.

Or maybe you need help with some finite tasks or projects. You could hire a contractor on an hourly or per project basis to complete the work. If you don’t have a candidate that’s top of mind, reach out to your network for recommendations or see if your city has a resource like Kansas City-based The Freelance Exchange, which helps pair clients with freelancers.

4. Treat yourself.

When you’re up to your eyeballs in work, taking care of yourself can easily slip to the bottom of your priorities. Yet giving yourself time for self-care — even if it’s just a few minutes a day or week — can go a long way in helping you feel relaxed, even re-energized for the work that lies ahead.

The beauty of self-care is that when it comes to treating yourself, the possibilities are nearly endless. First, think about what you enjoy: exercise? Meditation? A spa treatment or massage? Going to a movie? Reading a book?  Crafting?

Then, you can make a plan to, as the kids say, #treatyoself. Schedule your favorite indulgent activity just like you would a meeting, then do everything you can to keep the appointment. And take a similar approach to self-care as you would your business. For instance, you don’t need to suddenly book yourself on a week-long meditation retreat in the mountains (but we can dream!). Instead, carve out a few minutes each day (or a few times a week) to meditate in a favorite peaceful spot.

One of the advantages of self-care is that it adds up quickly, and a little bit can go a long way, especially if it’s been awhile since you’ve done something nice for yourself. Making time for something you love is part of your investment in your overall mental and physical health, which, over time, can be one of your business’s biggest assets.

5. Know when you’re most productive.

If you routinely struggle to get work done, it’s worth reexamining your daily schedule and how you’re blocking off your time. Are you more productive in the morning? Do what you can to avoid meetings or calls during that time and, instead, focus on checking things off of your to-do list. If you find you’re more apt to get things done in the afternoon, then make that your more productive time.

Depending on your type of business and operating hours, you might even want to go so far as to slightly shift your schedule. Maybe you prefer getting a later start — say, 9 or 10 a.m. — and work until 6 or 7 p.m. Early birds could shift that schedule so that you start your day earlier.

That brings up another tip: do what you can to adhere to a schedule. As an entrepreneur, it’s easy to work throughout the day (and even night). But by setting boundaries, including a daily schedule, you’re more likely to stay focused but also give yourself the time away from work you need to relax and rest, which is one of the most effective ways to minimize your risk of burnout.

Here’s one last tip: ditch the guilt trip. It’s so easy for entrepreneurs to talk themselves out of downtime or self-care or delegating. But think of it like this: the goal for any entrepreneur is to work smarter, not harder. Any steps you can take to do just that — and make sure you’re taking care of yourself — will be some of the most effective ways to achieve both long-term professional success and personal fulfillment.

4 Ways to Grow Your Business During the Holidays

< Back to Must Reads

4 Ways to Grow Your Business During the Holidays

‘Tis the season for gift giving, get-togethers and … business growth?

Whether you want to thank current customers, reach new customers or boost sales, the holidays can give you prime opportunities to grow your business and build brand recognition.

We’ve compiled a few ideas to help you give your business the gift of success. Oh, and we’ve included an idea that’s just for you, because there’s no better time to give yourself a little time off and recharge your batteries!

1. Exhibit at a holiday pop-up market.

Your city is likely host to a number of pop-up artisan, maker and other holiday markets throughout the holiday season. Whether you’ve exhibited multiple times or this is your first show, why not add your business to the exhibitor line-up?

If you’ve exhibited before, participating in a holiday pop-up market can help you reach a different audience. And if you haven’t exhibited before, the cozy, more intimate feel of most holiday pop-up markets can give you a welcome environment in which to sell your goods or services.

Since holiday pop-up markets are traditionally hosted on a smaller scale than other types of events or conventions, check with event organizers or a fellow exhibitor to get the scoop on your booth space. You may find, especially if you’ve exhibited before, that you can scale back your typical display. Regardless of the space constraints, you’ll want to be sure you have basic booth supplies: a table cover, signage, business cards and other collateral, plenty of product and the appropriate display fixtures.

In addition to selling your goods or services, look for other ways you can use the holiday pop-up market to your business’s advantage. If you have an email newsletter, for example, set out a sign-up sheet so that people can opt-in. Be sure to post on your company’s social media channels with the applicable event hashtags and handles. And if time allows, carve out a few minutes to network with your fellow exhibitors and learn more about what other local entrepreneurs are doing.

2. Connect with customers.

The holidays are the perfect time of year to thank your customers by sending a personalized holiday card or even a small gift. Work with your local commercial printer to design and print an eye-catching branded holiday card. You might also make a list of key customers, stakeholders and supporters (and check it twice!) and send them a small token of your thanks. You certainly don’t need to compromise your budget on gifts, but a thoughtfully selected gift can leave a lasting impression on the recipient, which likely translates into continued brand loyalty and support.

Stuck on what to give? Shop local! There’s likely no shortage of incredible brands and makers in your community. Not only will you delight your recipients, but you’ll also support a fellow entrepreneur. And if your recipient list is relatively short (and your budget allows), try assembling a locally themed gift box that celebrates some of your city’s best flavors and finds. Consider a bag of local coffee, a colorful coffee mug and a locally made sweet treat; or two pieces of locally made glassware paired with a local wine or spirit. Add a short handwritten note and you’ll have everything you need to surprise and delight your recipients.

3. Launch a holiday promotion.

Breaking news: people spend a lot of money during the holiday season! Shocking, right? With so much buying activity, this is an ideal time of year to launch your own holiday promotion.

The details, of course, depend on what you sell. Popular promotions include free shipping, a percentage off your purchase, gift with purchase or introducing a new, limited edition item. As you decide the specifics of your promotion, keep in mind your customers and your bottom line. For some small businesses, for example, offering free shipping — or even a flat shipping rate — can be cost-prohibitive, erasing any possible net gains of the promotion. Be sure to do the math before you commit to an idea.

One other tip? Think a few steps ahead of your promotion. A holiday promotion is, of course, intended to drive sales. But how can you use that promotion to get people to come back and buy from you once the holidays are over? You could include a coupon in their order. Or enclose a postcard or other brief informational piece that highlights other products. By keeping your long-term goals in mind, you’re more likely to avoid customers who simply swoop in for the deal and never return.

Whatever type of promotion you decide to launch, be sure to carefully track it so that you can measure performance and decide if it’s something you want to do again. And don’t forget to promote your promotion! If you’re exhibiting at a holiday pop-up market, whip up a brief postcard with details on the promotion. If you have email subscribers, send them an announcement so that they can take advantage. You could even generate some anticipation by teasing the announcement, then revealing the promotion on a specified date on your website, social media platforms and any other marketing channels you use.

4. Treat yourself with time off.

Entrepreneurs typically don’t have much — if any — downtime. But the holidays are an ideal time to give yourself the gift of a break. After all, you’ll likely have plans to celebrate with family and friends, and you should do what you can to soak up every minute.

Look for other opportunities to take at least one day off and do something you love … or, better yet, nothing at all! It’s easy to guilt yourself into working, but you deserve a break. And it will help keep you rested, energized and at a lower risk for burnout. With a little holiday R&R, you’ll be refreshed and ready to conquer your 2019 business goals.

We’ll leave you with one last gift: the gift of knowledge! If you find yourself in need of resources or insight regarding a particular business topic, register for Kauffman FastTrac, our free online course that helps you launch your business. If you’re post-launch, that’s no problem — you might just find a helpful refresher or information about a topic you hadn’t yet considered. The best part about Kauffman FastTrac? It’s self-paced, so you can learn on your own time, including in your holiday PJs! Hot cocoa is optional.

5 Tips to Find an Insurance Broker

< Back to Must Reads

5 Tips to Find an Insurance Broker

Creating a business involves a lot of risk. But successful entrepreneurs learn how to mitigate those risks to improve their odds of success. One of the best ways to mitigate risks is purchasing insurance. There are many different kinds of insurance available to new and existing businesses, including general liability, errors and omissions, property, and more.

You should research options but, more importantly, you should find and work with a good insurance agent or broker to analyze your risk and purchase the appropriate policies for your business.

Here are 5 tips to help you find the right insurance professional for you.

Commercial vs. personal

To begin, you should recognize that many insurance professionals specialize in only personal policies such as life insurance, personal property insurance, auto insurance, and the like. While these professionals know more about insurance than you, it doesn’t mean they understand the world of commercial insurance policies. That’s why you should always seek out a professional that has experience working with businesses (and if you are a new business, then someone with experience working with new businesses). That way, you can make sure you are not missing an important policy such as a directors and officers liability policy.

If you already have a great relationship with your personal insurance professional but they don’t do business policies, ask for a referral. They are bound to know many other agents and brokers (more on referrals below).

Agents vs. brokers

You should also note that insurance agents and brokers are not the same thing. Insurance agents will look for policies from only one specific carrier (unless they are an independent agent). While they may have a good policy at a good rate for you, they may not. That’s why it might make more sense for you to speak to a broker. Insurance brokers will seek policies from multiple carriers. This means they can shop around for different policies at different prices and you may find a better overall fit by going through a broker.

Your unique needs

It’s true that many businesses have similar risks such as general liability, property, and auto. Those are pretty standard and are fairly easy to cover with insurance.

However, you should always consider what unique risks apply to your business and then consider whether you need to speak to a unique insurance professional about those risks. For example, if you run a construction company building high-rises, you’ll certainly have a greater risk of injury for your workers. On the other hand, if you spend your entire career building creative assets, you may have greater risk exposure for copyright infringement.

Accordingly, you should seek out an insurance professional that has experience in those areas and who can help you find the appropriate policies to mitigate those risks. And most importantly, keep in mind that certain risks (for example, intellectual property insurance) require special policies for coverage.

Consider how they work

As with searching for any other professional, consider how your prospective insurance professional works. Some prefer emails, some prefer phone calls, and others prefer in-person meetings. In either event, make sure you and your insurance professional share similar working habits to avoid poor communication.

Get a referral

Without a doubt, the best way to find a good insurance broker or agent for your business is to get a referral. First, ask fellow business owners (especially owners of similar businesses) who they use and whether they are happy with their relationship. From there, you can check in with various trade organizations and entrepreneurial support groups in your city and you can ask your state insurance regulator for a list of professionals (or find a list on their website).

Picking the Right Accountant for Your Small Business

< Back to Must Reads

Picking the Right Accountant for Your Small Business

Most successful entrepreneurs have mastered the most important metric – their financials. They are so important that you should consider your financials at every step along your entrepreneurial journey from writing your business plan to starting your business and growing.

However, you’ll almost always be best served by working with a good accountant that can help you create projections, manage your books, and provide strategic advice about your financial situation. This post will give you some tips on how to find a good accountant for your business.

Get a good referral

The best way to find a good accountant for your business is to talk with other business owners. If you are not already connected to other business owners, then consider going to various networking events in your city to meet some. They can often provide the best advice on which accountants are good (or bad) and which ones are most likely to understand your business. That’s a big key because finding an accountant that is already familiar with your business model and industry can make things much easier on you.

If you can’t get a referral from a fellow business owner, consider reaching out to local organizations that might have a resource list or look for someone recommended by your accounting software provider (for example, Xero and Freshbooks both maintain directories of financial professionals).

Understand what they do

There are many different types of financial professionals out there–from Accountants to CPAs, CFOs, and more. Some offer tax preparation and filing, some offer forecasting services, and others offer strategic financial advice, among other services.

It’s not important that you understand the entire industry today, but you need to know what you are looking for. Most likely, you’ll simply need an accountant for now to help you set up your financial records. This often entails setting up your chart of accounts so you can properly track the money coming into, and going out of, your company. From there, your accountant can help to make sure you are paying your taxes properly throughout the year (sales taxes, use taxes, employment taxes, etc.). And finally, they can help you to prepare and file your taxes at the close of each tax year.

You should ask your accountant if they can do all of those things and what else they can provide. If they are not comfortable playing the role of a CFO, then you may need to seek additional financial professionals to supplement your accountant.

Understand how they charge

Many accountants simply charge hourly for their services. But more and more are offering packaged services, whether it’s a fixed monthly fee for a set package of services or a fixed fee per tax return filing.

In either event, it is important that you understand what bill you are going to get in the mail for their services so you are not caught off guard. This is especially true for hourly billers. You should always ask for estimates and, when applicable, a cap on their fees (or at least an email notice if they go over some pre-determined number of hours).

Make sure they work like you

This may be the most important tip–always interview the accountants on your short list to make sure they work like you. For example, if you prefer to do everything in the cloud, don’t hire an accountant that plans to mail you a bunch of paper. Or if you plan to manage your books day-to-day and only call on them for occasional advice, make sure they are okay with that.

Don’t stop here!

Finding a good accountant is just one of many things you have to do when starting and growing a business. If you are looking for more entrepreneurial advice, check out the Kauffman Foundation’s free FastTrac program where you can take online courses to learn how to become a successful entrepreneur.

< Back to Must Reads