Should I form my company as C corporation, an S corporation, an LLC, a partnership, or a sole proprietorship?
Start it as an S corporation, unless you have to issue both common stock and preferred stock; in that case start it as a C corporation. And an S corporation can easily be converted later into a C corporation. LLCs are popular but can get overly complicated. Partnerships and sole proprietorships are to be avoided because of the potential personal liability to the owners of the business.
How much should I capitalize my business with at the beginning?
As much as you can reasonably afford, and in an amount to at least carry you for 6-9 months with no income. What you will find is that it always takes you longer to get revenues, and that you will experience more expenses than you anticipated.
What are the biggest challenges to starting a business?
The answers are:
- Shortage of capital and cash flow
- Having a good business plan
- Coming up with a great product or service
- Sticking to it
- Working more than you expected
- Getting through the frustrations of being constantly rejected by customers
- Hiring good employees
- Knowing when to fire bad employees
- Having to wear so many hats
- Managing your time
- Maintaining some kind of work/life balance
What are the biggest mistakes made by startup entrepreneurs?
- Not starting with enough capital
- Thinking that success will come quickly
- Not carefully budgeting
- Not focusing on the quality of the product or service
- Underestimating the importance of sales and marketing
- Not adapting or iterating quickly enough
- Not understanding the competitive landscape
- Ignoring legal and contract matters
- Hiring the wrong employees
- Mispricing the product or service
Do I need legal representation to start a business?
It’s usually a good idea to have an experienced business lawyer on your team who has advised many startups.
Where can I get funding for my business?
Many books and articles have been written on this subject as well. Here is a summary of the most effective sources of capital:
- Personal funds
- Credit cards
- Friends and family
- Angel investors
- Crowdsourcing sites such as Indiegogo.com and Kickstarter.com
- Bank loans/SBA financings
- Venture capitalists
- Equipment loan financing
What accounting and tax software do you support?
Blackline uses a variety of QuickBook versions and Office Tools Pro accounting software in most of our client engagements. We also use Lacerte as our tax preparation software.
What small business cloud tools do you work with?
We use DocuSign to prepare, send and sign documents online. Ignite payments First Data for merchant services on the cloud. Office Tools Pro for accounting and time tracking. Quickbooks for client bookkeeping. Lacerte for clien tax preparation. Cloud9 for cloud storage service.
What is a risk management plan? Why is it important to have it?
A risk management plan is an approach that can identify, anticipate, and employ solutions in case your business runs into issues/problems. It increases the chances of your success up to a great extent.
Some of the benefits of developing and implementing an efficient risk management plan are:
- Helps you to avoid any big disaster
- Enhances your revenues by saving your expenses
- Provides you mental satisfaction
- Ensures the successful completion of project
- Gives you competitive edge over others
- Increases the sense of responsibility and accountability
- Helps you to explore new opportunities
What is an exit strategy in business?
A business exit strategy is a strategic plan to sell his or her ownership in a company to investors or another company. An exit strategy gives a business owner a way to reduce or liquidate his stake in a business and, if the business is successful, make a substantial profit.