An entrepreneurial boom in America is helping offset concerns of an uncertain economy. Although many small businesses start as supplemental income, many entrepreneurs are aiming to expand in 2014.
Growing your small business should maximize money and time. Owners must also consider the impact of expansion on liability and taxes, among other factors.
Here are some small business strategies for 2014 and beyond:
Evaluate Your Business Structure:
The low cost, convenience and tax benefits of sole proprietorship make it the most common legal structure. While this may be suitable, your needs for liability coverage and funding may benefit from incorporating. Elliott Broidy is an entrepreneur known to manage each of his ventures for unique requirements.
If you plan to add staffing, consider that sole proprietors are liable for employee conduct or mishaps. This means you could be sued for illegal acts or damage by staff members. As a corporation, your business is a distinct entity, which provides an added layer of legal protection.
Entrepreneurs often start their business with little or no capital requirements. When financing needs increase, the value of separating personal and business assets also rises. Using personal credit cards for business purposes makes it easier for creditors to pursue your estate in case of non-payment.
By opening bank accounts and lines of credit under a corporate tax id, you mitigate this risk. You will also establish a business credit history, which may be required to secure larger client accounts or rent office space.
From a tax standpoint, sole proprietors may prefer an S Corporation or LLC when incorporating their business. Each of these pass through entities allows you to draw income without the double taxation that deters many sole proprietors from incorporating. Although gross income is taxed at the corporate rate, net income distributions are at your personal tax bracket.
Additional credibility is also gained from incorporating. Many startups get initial customers from family and friends. Expanding beyond this network often requires a more professional image. You should consider a business name that helps branding. For instance, ‘Dirty Dog Pet Grooming, Inc.’ may be preferred to simply using your name.
Estate planning could affect your decision to incorporate. Unlike sole proprietorships, corporations continue to exist in the event of death or being incapacitated. As a new business becomes more viable, you may wish that it is passed on to beneficiaries.
Become Relevant on Social Media:
Separating business and personal life is mostly thought of in financial terms. However, the concept also applies to your business marketing. Social media allows you to connect with customers in a low cost and time efficient manner.
Many small business owners use their personal Facebook page or Twitter account to promote their business services. However, this approach can reduce the effectiveness of social advertising. To establish a distinct social media presence, consider starting a Business Fan Page on Facebook. Set a goal to post regularly and include keywords that are relevant to your business. Since social media requires minimal time and cost, you can quickly expand to other social platforms.
FAQs or value added tips are frequently shared by social media users. Known as social media signaling, this word of mouth marketing brands you as a trusted authority. You can post the same information in unique ways on Twitter, Google + and YouTube. Make the posts user-friendly with a backlink to your website, which also has search engine benefits.
Much like your revenues, tracking your internet exposure is also important. Google Analytics tracks internet traffic and the behavior of visitors to your website. Using this free tool helps make informed decisions on which social media efforts are producing the best results.
Summary-Business Needs are Dynamic:
Changes in the broader economy have very personal effects on your small business. Entrepreneurs should periodically review if changes to business structure, marketing and finances are beneficial.