StartupNation

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• 5 Tips to Keep in Mind as You’re Starting a Business
• Should Entrepreneurs Incorporate as an LLC or PLLC?
• The Unicorn Is Dead, Long Live the Thoroughbred
• Customer Experience: 5 Tips For New Businesses From a Startup Investor

5 Tips to Keep in Mind as You’re Starting a Business Posted: 03 Jan 2022 09:00 PM PST Starting a business is incredibly exciting, but it also requires a lot of strategic planning if you want to create something going to last for years. Follow our top five checklist for precisely what new business owners need to know, and you can look forward to creating your own success.   Five tips to know when starting a business: Plan, plan, plan When you first decide you’re starting a business, it can be tempting to go in there firing on all cylinders. But before you go ahead and buy that domain or start planning your website, the very first thing you need is a solid business plan. This can help you figure out who your ideal customer avatar is as well as your main competitors, the costs you'll need to cover and the opportunities the market offers.  If you're looking to fund some of your initial business expenses through a bank loan or investors, then without a business plan, you won't get past the door. There are many resources out there for creating a business plan, but flexibility is key in the current market.  Verizon Small Business Digital Ready: A free resource for learning basic business skills, the latest digital technology and more. Writing your first business plan might feel like a daunting task, so here are some pointers to keep in mind as you get started: Remember your audience Do your market research Identify your competitors  Include your unique selling proposition (USP) Know your numbers  Write an executive summary  Your plan should help you set goals and outline the steps you'll need to take to get there. Then, once your business plan is drafted up, you can move onto the next stage: getting ready to launch!   Open a business bank account Don't make the mistake of using your personal account for business purposes. If you're setting up as an LLC or s-corp, then this is vital. Starting on the right foot when it comes to your business banking will make filing taxes and keeping a general eye on your monthly profit and loss much easier. In addition, you may decide to apply for a business credit card for larger purchases relating to your business.   Your bank may even offer a business loan if you can show them evidence of your cash flow and collateral. If you can show this as well as a realistic, written business plan, then your bank is far more likely to offer you a loan.  At the same time as setting up your business bank account and looking into financing from your bank, you might want to consider other financing options, including grants, equity financing, angel investors or venture capital investment.  5 Mistakes Derailing Startup Founders Sign up for accounting software Spending money on accounting software might seem counterintuitive if you're trying to keep your expenses lean, but when it comes to tax season, you'll be wishing you had! At first glance, you might think it would be cheaper to handle all of your accounts payable in-house, but there's plenty of hidden costs when it comes to invoicing. Choosing to use AI-based accounting software can help your invoices be approved much faster and save you money and time. You can still see every stage of invoice approval, but you don't need to worry about managing it all yourself. You can also often generate financial reports for key insights like profit and loss and cash flow, and it makes tax filing season more streamlined. Using accounting software also makes it much easier to identify potential fraudulent transactions, as the software will flag these for you. With fraud affecting small businesses twice as often as large businesses, using accounting software from the outset is a smart decision for any new business owner.    All this frees up your employees to spend more time starting a business successfully instead of tracking down invoices before they're verified and approved, generating reports and preparing tax returns.  Choose your content management system carefully  Before you rush in and sign up to a web host or content management system (CMS) without figuring out precisely what they provide, take a moment to think about what kind of flexibility you're going to need in the future. Many customers now consume content on a whole range of different devices, from their mobiles to voice-activated speakers and smartwatches. If they can't access your content on those devices, you might lose business to a competitor with more flexibility. While the most popular options in the past generally offered an all-in-one or a monolithic CMS, these days, many businesses are choosing the more flexible option of the micro-services offered by a headless CMS.  Choosing a CMS that uses a decoupled or headless architecture can help you meet your customers' needs much better. These use micro-services to communicate your content through a wide range of application program interfaces (API) without you having to duplicate content.  Having a strong presence on the web is vital for all types of businesses. Making sure to choose the right CMS can make the difference between easy updates and a constant battle to stay on top of all your content. It's much faster and easier to distribute your content across any and all channels using a headless CMS, meaning you can make sure you keep providing an amazing user experience, no matter what device your customers are using.    Be smart about your taxes  The way your business is set up will dictate how you prepare and file your taxes. Unless you're confident filing your business taxes yourself, it can be worth working with a bookkeeper or accountant. They'll know exactly what you need to do to meet your tax requirements. They can also help you figure out any deductibles like office expenses, travel and even subscription fees.  Start the habit of keeping all receipts that you can claim as business expenses. It's a good idea to write a brief note of what each receipt relates to, and if it's a business lunch, pop the name of who you met and what the purpose of the meeting was. When it comes to making deductions, a system like this will make things much easier! While you don't have to keep receipts for all expenses, it's a good idea to get into the habit of saving them all.  Some automobile expenses can also be deducted, and you can usually choose to either deduct actual expenses or a standard rate for mileage. Depending on how you run your business, these can offer different levels of savings. It's a good idea to talk to your bookkeeper about estimating the savings offered for both options before you choose which one to use.   Starting a business doesn’t have to be as stressful as it may seem. Once you've ticked off everything on this list, you'll be one step closer to starting a business!   Originally published Sept. 14, 2021. Must-Read: 5 Leadership Traits No Entrepreneur Succeeds Without The post 5 Tips to Keep in Mind as You’re Starting a Business appeared first on StartupNation.

Should Entrepreneurs Incorporate as an LLC or PLLC? Posted: 03 Jan 2022 09:00 PM PST Entrepreneurs who choose to incorporate as a limited liability company (LLC) may pause when they realize there is a secondary option available known as a professional LLC (PLLC). What is a PLLC? How does it differ from an LLC? Which is the best option to incorporate a business? Let's explore the differences between the entities and how entrepreneurs may determine which formation to choose. Most Popular: 10 Negotiation Techniques to Make You a Better Entrepreneur Limited Liability Company (LLC) There are a few reasons why an LLC is one of the most popular entity formations with small business owners. Flexibility An LLC offers its owners (commonly known as members) flexibility in structuring the entity. Forming an LLC means choosing from one of three management structures: Single-member LLC. A single owner runs and operates this LLC. This is an ideal structure for LLCs that only have one member. Is there a difference between a standard LLC and a single-member LLC? Yes. Standard LLCs are treated as a partnership on the federal level. Single-member LLCs, however, are not considered to be a partnership. As a result, a single-member LLC must maintain proof of being able to run their business like a standard LLC, such as drafting a single-member LLC operating agreement. Member-managed LLC. An LLC that has several members may decide to form a member-managed LLC. This structure ensures each member is equally involved in running the business and shares the same amount of responsibilities. Manager-managed LLC. Not all members of an LLC wish to be involved in running the business. This is where it may be helpful to choose a manager-managed LLC structure. This allows a board of managers to take more control and responsibility over the business instead of referring to its members. Tax benefits Entrepreneurs who form an LLC receive tax savings for incorporating as this entity formation. The other additional benefit to forming an LLC is that the entity is taxed as a pass-through entity. Being taxed as a pass-through entity means that the profits of the business can "pass through" to the owners. This means profits and losses are reported only on individual tax returns for the owners and not at the business level, allowing the business to avoid double taxation. An LLC may also deduct other relevant losses or operating costs of the business on personal tax returns, which helps offset other income and makes it easier to file taxes. Maintenance ease LLCs differ from more structured entities like corporations in that they are easier to maintain. Overall, an LLC has fewer compliance requirements. That being said, it is still a good idea that members draft an LLC operating agreement. This helps set rules and regulations among members for how to run the LLC. Verizon Small Business Digital Ready: A free resource for learning basic business skills, the latest digital technology and more. Professional LLC (PLLC) A professional limited liability company (PLLC) is a specialized version of an LLC. It shares similarities with an LLC in that a PLLC provides small business owners with limited liability protection. What a PLLC does is work to limit personal liability for claims related to negligence, errors and malpractice of partners for individuals in specialized professions. Who qualifies for a PLLC? To incorporate as this entity, the owner must work in a specialized profession. This profession requires state licenses and offers professional services to its customer base. Here are a few examples of individuals who qualify to form a PLLC: Lawyers and attorneys. Marriage, family and child counselors. Nurses, physical therapists, chiropractors, acupuncturists, optometrists, podiatrists, pharmacists and physician assistants. Psychologists. Social workers. Dentists. Engineers. Accountants. Architects. Is incorporating as a PLLC the same process as it would be for an LLC? There are a few differences that individuals in specialized professions must take into account before applying. 1. You must be a licensed professional. First, incorporating as a PLLC requires proof that the individual is a licensed professional. The application process will require sharing more information about their current occupation and services. Licensed professionals may be required to share proof of their profession when filing as a PLLC, such as providing proof of a state license. 2. Determine state authorization. While an LLC may be the standard across all states for incorporation, the same cannot be said for PLLCs. Not every state provides PLLC legislation. If you find you are in a specialized profession and you want to form a PLLC, check with the local Secretary of State. Determine if your desired state of incorporation and where you plan to conduct business has authorized PLLCs. If not, you may need to consider filing to incorporate as a PLLC in a state where there is PLLC legislation. LLC and PLLC: Which is right for me? Ultimately, the answer to this question lies in your profession. An individual in a specialized profession is likely to incorporate as a PLLC while a more general entrepreneur will pick an LLC structure that best suits their business. If you have additional questions about the filing process or incorporating as any other entity formation, it's best to ask a legal professional or tax adviser for extra guidance and assistance. StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here The post Should Entrepreneurs Incorporate as an LLC or PLLC? appeared first on StartupNation.

The Unicorn Is Dead, Long Live the Thoroughbred Posted: 03 Jan 2022 09:00 PM PST How quickly can a word's meaning change? Well, when it comes to the business definition of "unicorn," it appears the shelf life is something like eight years. When venture capitalist Aileen Lee coined the term in 2013, there was a very good reason to call a privately held startup worth more than $1 billion a unicorn: There were only 39 of them. Now, the unicorn is looking downright ubiquitous, with the current count up to more than 800 and certain to grow, nearly doubling in size in just the last year. It’s predicted that 2022 will be the year when the vaunted unicorn club becomes a quadruple-digit organization, passing 1,000 members. A creature that you would once be lucky to glimpse is now one of a hundreds-strong stampede. How did such a rare thing become so commonplace, and what can we expect from their number in the years to come? 2021: The year of the unicorn 2021 was truly the year of the unicorn. Nearly 40% of all current unicorns were created in the first eight months of 2021. This kind of growth wasn't just seen for companies crossing the $1-billion valuation threshold either. Through the first three quarters of 2021 alone, VC investment jumped by half year-over-year, from $166 billion in 2020 to $240 billion through Sept. 30. Of course, 2020 itself presented a lower base of investment because investor activity was diminished by jittery and uncertain fears in the pandemic's earliest days about the kind of new paradigms the worldwide pandemic was set to unleash. While the pandemic has proven to be destructive in its human costs, it has also caused societal realignments we have to consider when pondering how people will live in future economies. We've already seen this in labor and social movements like work from home, learning pods and the Great Resignation. In terms of investing, the pandemic highlighted the importance of a few sectors that had already grown significantly during the 2010s, namely health and tech (and health tech). It should be no surprise then that in 2021, fintech and internet software and services were the top producers of unicorns. It was reported that fintech accounted for 27.5% of the 316 new unicorns added to the list in the first eight months of 2021, followed by internet software and services (21.5%) and health care (8.5%). Looking over Forbes' anticipated "next unicorns," almost all of these startups have at least one foot in technology, whether that is health tech, enterprise tech, fitech or martech. Regardless of what the final stages of the coronavirus may have in store for the world, these sectors are sure to thrive whether the future holds a fully "open" or even fully "closed" global economy. StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here Will the unicorn become more rare? Was 2021 a unique moment in time? Will the emergence of a virus variant like Omicron create lockdowns that take us back to the societal and economic pullback of spring 2020? Shutterstock Much of the 2021 spike we saw across the economy could be, in part, attributable to an anticipatory feeling about the burst of society opening back up, and if the pandemic drags on in any significant way past a two-year window, a correction may be in the works, especially if we see the kinds of global lockdowns and attendant economic restriction (the worst since World War II) we saw during the first year of COVID-19. If there is a constriction in the unicorn market, it wouldn't be the first time in the term's eight-year history. In 2016, there was a significant funding constriction across all of VC, particularly for unicorns, to the tune of 68 percent. As I noted at that time, there was discussion of unicorns "losing their horns" due to the heightened fears about inflated valuations. Of course, this discussion was also somewhat American-centric and neglected the unicorns developing and being funded at a different timescale in Asia. The worries about western valuations did, in fact, prove to be short-lived. 2017 generated a record amount of new unicorn funding, to the tune of a 39% year-over-year increase, powered in part by the emerging ride-sharing tech revolution at the time. This presents its own lesson for anybody who might fear a unicorn pullback: Today's valuations fears could very quickly give away to tomorrow's next big thing. No longer rare, but still pretty special The arc of the financial universe bends toward growth, even if that sometimes means a zero-sum game between sectors (e.g. the "online" economy versus the "travel" or active leisure economy).  Even if there is a temporary decline in growth for 2022, strong companies, the kinds of companies approaching $1 billion in value, will adapt to these conditions, and there is no reason to think we won't continue to see new unicorns in the hundreds across those sectors that are continuing to churn them out. In any world, the 2020s will continue to be a boom time for the aforementioned health tech, enterprise tech, fintech and martech industries. It is also important to remember, as in the case of 2016, if there is pullback in the United States, that may not necessarily be the case in the rest of the world. As numerous as unicorns may seem, it just may require looking a little harder for them outside the usual places. As we soon reach four figures in their total number, perhaps the goalposts will shift for the unicorn to preserve the rarity of that designation. Maybe what we think of as the "decacorn" – the 45 private companies currently valued at $10 billion or greater – will become the new unicorn. That would be a shame though, as $1 billion is still an impressive mark by any standard, and a large cohort of these highly valued startups can give us better and more detailed insights about industry and geographic strengths for privately held companies. Nevertheless, perhaps it would be more apt to start calling these companies something like "thoroughbred" instead of "unicorn." The post The Unicorn Is Dead, Long Live the Thoroughbred appeared first on StartupNation.

Customer Experience: 5 Tips For New Businesses From a Startup Investor Posted: 03 Jan 2022 09:00 PM PST Customer experience is a vital element of a startup's growth. In fact, surveys have shown that 86% of customers are ready to pay more for a better experience and that 49% of buyers will make an impulse purchase after receiving a personalized email. Knowing this, it's clear you need to work on improving the experiences a customer has with your brand from the outset.  After all, what better time to think about customer experience than at this very moment, as you are just starting out? Grab the opportunity before your processes are entrenched and much more difficult to change and reinvent. Startups that get customer experience right early on have a much better chance of attracting investors and reaching that coveted sustainability stage. Here are my five tips for nailing it as a new business. What is customer experience?  Customer experience (or CX) is the amalgamation of all the experiences and interactions a customer has with your business, from their first point of contact all the way down your sales funnel. Those who have a positive experience with your brand are more likely to become repeat customers, and ultimately, brand advocates. On the other hand, a single bad experience can cause even a loyal customer to leave your brand for good.  In other words, you need to not only lay down solid CX foundations as you begin to build your brand but also continually revise and build on them, ensuring that every single customer interaction is a positive one.  1. Plan your website's information architecture.  Information architecture mapping is often undervalued and overlooked as a task. There's nothing particularly appealing about it, and it's not nearly as flashy as lead generation or social media marketing. However, it is the very essence of CX, as its purpose is to ensure customers don't get lost on your website. With proper architecture, you'll ensure they can always find exactly what they are looking for.  Information architecture is the way you organize and label the content on your website, and it defines the path a visitor needs to take to find a specific piece of information. Every decision you make IA-wise will impact how easily a user is able to navigate your website.  To ensure your visitors never get lost, you will first need to understand them and how they see your product or service. Which terms do they use, and what are they looking to get from you?  Once you have your terminology down, organize your pages in an intuitive way. Don't believe the search bar will make up for a lack in IA, as most people will want to access key information from your main menu.  Finally, don't make up your own terms for the most obvious of pages. Your "contact us" page should be "contact us," not your "chat to us" or "give us a call" page. Here's a good example of a website that has great IA. Time Tackle has made their most important sections (their Use Cases and their Features) available from the main navigation bar, and they are also clearly labeled on the homepage. Image source: Timetackle.com The terms they use are also uniform and clear. There is nothing fancy about them, but they make navigating the website and pinpointing the correct information easy for all kinds of users: agencies, executives, or sales managers. 2. Implement customer loyalty programs. A survey of over 18000 consumers has shown that 75% of customers will favor a brand if it offers a loyalty program. They will also shop more frequently and increase their lifetime value, especially if they have an emotional relationship with the brand.  Keep in mind that retaining customers is more affordable than acquiring new ones (not to mention more profitable). So, a simple loyalty program can go a very long way in helping you grow your new business.  In order for a loyalty program to truly work, it needs to tick two boxes:  Elicit an emotional response. Make sense to your customers. First, the rewards you offer need to tickle your target audience. If they are not interested in saving money, but they are interested in saving the planet, offering discounts won't be as enticing as taking concrete steps to make your company eco-conscious Bear in mind that most customers are still looking to get a discount or a freebie. Basing your loyalty program around savings and allowing customers to choose their prizes is always a great place to start.  As for the emotional component, you want to make your customers feel heard and valued. If they feel you care about them and share their ethos, they'll form a much deeper connection with your brand.  Speak their language, and approach your relationship as more than just transactional. These are real people, complete with worries and interests. Appeal to their humanity rather than their wallet.  A brand that is often cited as having the best loyalty program in the world is Sephora. Their Beauty Insider scheme does it all. It provides rewards that shoppers actually want, speaks directly to the customer in their own language, and fosters a community. While you may not be able to achieve a similar reach, these key pillars are already within your reach. Make sure to implement them. Sephora.com 3. Be available in person.  A positive customer experience is all about the human touch. Doing business with a faceless brand is never the same as chatting to a person whose name you know and who goes out of their way to help you out.  You can't have a one-on-one conversation with each customer, but you can personalize a lot of your communication. You'll do this by paying attention to the discounts you offer, the products you recommend, and even the way you structure your emails and segment your email list. The closer you hit home, the better the CX will be. Opening the avenues of communication (and offering a lot of them) is a great first step to take. Take a look at Rain or Shine Golf and how they have made themselves available.  Image source: Rainorshinegolf.com They have:  listed all the different ways a customer can contact them in their header and footer offered their email address as well as two separate phone numbers (one for calls, the other for texts) included their office hours, so you know when you can expect a reply implemented a live chat feature that floats over the screen and is always available Plus, their Facebook profile is just as welcoming, with its Messenger chatbot launching instantly as the profile page is loaded. Don't limit the customer's experience to your website, phone number, or email alone, either. Offer support on social media too. Whether someone tags you with a question or you find a mention via a social listening tool, always take the time to reply. Social support is a terrific way of showing prospective customers that you take customer experience seriously. That goes especially for platforms like Twitter, where follower interactions are publicly visible. JetBlue Airways shows us how this is done on its Twitter feed. It has no shortage of genuine empathy and excellent examples of customer service. 5 Reasons Your Digital Ads Aren't Performing 4. Speak directly to your audience. Let's be completely honest about something: Most customers won't care about your brand one bit. They will care about themselves and what you are able to do for them. Which is why focusing too much on your brand in your website's copy would be a huge CX mistake to make. The goal of your copywriting efforts should be to answer the "what's in it for the customer" question as soon as possible. In fact, immediately. Don't make someone read through half of your homepage before they get to this particular point.   The copy you write needs to be relatable and meaningful to your target audience. They need to understand it instantly and walk away understanding what they can expect. You need to showcase measurable benefits and prove your value.  Refrain from vanity information. Create an in-depth company story page if you really need to, where you can brag if you can't help it. However, your main goal should still be telling a story that will help your audience connect with your brand.  Somnifix has done a good job of focusing on the customer. Their entire homepage is dedicated to explaining why a customer will benefit from their product, what problem the product solves, and why they should care. Image source: Somnifix.com This is especially important since their product is so niche. If that's the case with your product, too, abstain from explaining what it is. Rather, go into detail on what it does.  5. Don't force your visitors to read. The more we're exposed to the digital world, the shorter our attention span gets. It has dropped to a shocking eight seconds in 2021. What this means for your CX is this: Don't make your website visitors read a lot. Instead, try to capture their attention with a video.  A video is not only more engaging but also boosts information retention, and it can help your audience connect with your brand more. It provides the opportunity to convey more information. You can add layers of emotion, values, meaning, and messaging to as little as 60 seconds.  Homepage videos are also good for SEO (provided that they load fast), as they prolong time on page and boost engagement metrics.  The type of video you choose to record will depend on your business. Whether you explain what it is you do, showcase your product, do a demo, or simply film a feel-good reel highlighting the benefits of doing business with you, a video can significantly boost CX.  Take a look at WhatsGood. Their short clip both highlights the benefits of their service and sends a powerful message about who they are as a brand. It showcases their sustainability, eco-friendliness, and community spirit.  Image source: Sourcewhatsgood.com While this is the right choice for this particular brand, you may need to go a different route. Remember, it's all about the target consumer and what they will want to see. Final thoughts  Of the 100,000 businesses started today, only a third will live to see their 10th birthday. To find yourself a part of that minority, consider these five CX tips. By focusing on your customer rather than yourself, you can cement your brand in the hearts and minds of your target audience – and with a longer-lasting effect.  Verizon Small Business Digital Ready: A free resource for learning basic business skills, the latest digital technology and more. The post Customer Experience: 5 Tips For New Businesses From a Startup Investor appeared first on StartupNation.

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