small business

Starting a Business in Virginia

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How To Start a Business in Virginia

The Commonwealth of Virginia is a great place to do business because it’s a fairly easy state to operate in with fair tax rates. Some states make it more difficult, a few may make it easier, but very few states offer the diverse demographics and geographical beauty, options and cultural diversity that Virginia does, making it an ideal grounds for clientele for any business. Whether you’re thinking of starting a new business in Virginia Beach, Richmond, Fairfax, Roanoke, Danville or Abington, it’s all basically the same. The following is a helpful list of things that you’ll need to do in order to succeed in your entrepreneurial endeavor.

1. Write a business plan.
2. Know your competition.
3. Develop a Marketing plan.
4. Identify what “kind” of business license you should have.
5. Come up with a budget.
6. Market your business.

1. Write a Business Plan

Why are you going into business? What will you sell? How will you sell it? What makes you different? Why are you special? How do you want to be seen in the marketplace? From whom will you get your supplies? What will you offer that will make people come back for more? What is your budget? (see budget below, later). Write out about a 3 pages business plan. Identify the basics and what’s important, but don’t get too in depth with it, spending weeks and months formulating it. The reason why you shouldn’t is because your business will naturally change and evolve every few months for about 3 years until it settles into what you will eventually become.

2. Know Your Competition

Who are your biggest competitors? Are you doing business locally or nationally? Regionally? Identify who the big cats are that are out there as well as some of the smaller players. Sometimes it’s the other small guys that are really the biggest poachers of your business to watch out for. What are they doing that you should and shouldn’t be doing? Know your enemy! But don’t think of competition as your enemy. Competition is what makes capitalism thrive. Competition drives us all. In fact, you’ll probably find that some of your competitors might actually send you a ton of business! Whether it’s the fact that they are so terrible at what they do that their customers come flocking to you because they’ve heard better things, or it’s that your competitor might not offer one of the things that you offer and vice versa, so you two end up referring business to each other. Both of those things happen to me on a regular basis and I’m grateful for it.

3. Develop a Marketing Plan

You’re going to need a name, a logo, a website, business cards, maybe shirts, promotional items and so on. But you’re going to need advertising too. Identifying a budget for advertising is usually very difficult for a start-up. You’ve just sunk all your money into getting the business going, now there’s not much to throw at advertising. The good news is there’s a secret. Networking. Get out there and meet people. Join your local chapter of BNI, or any referral group. You can even find a ton of local groups on Linkedin in your area such as Entrepreneurs of Southeast Virginia for example. Join associations and business-related clubs. This is a cost-effective way to meet people who will refer you business. You can also develop a program where you pay people for referrals if you want. Sometimes that works.

Set aside some money for a quality website, an SEO link-building campaign and the occasional media run. This is what’s important in the first year or two of your business. But plan it from the beginning. If you’re unsure of what types of marketing you should be doing for your type of business, call up a small business marketing consulting company such as Commonwealth Creative Marketing, located in Virginia. They’ll help you identify what you need to do.

4. What Kind of Business Should You Be?

You’ll need to identify and decide what type of business you want to be structured as. Should you be an LLC, an S-Corp, a proprietorship, Inc, etc? You should talk with an attorney that specializes in business law. Find one that you trust, or that a friend of yours recommends… They’ll know the pro’s and con’s and help steer you in the right direction. Usually they won’t even charge you to help give you some advice on this. What they want is for you to assign them to be the registered agent for your business, which essentially means that they would handle writing your operating agreement and handle the annual renewals to the Virginia State Corporations Commission. Usually this will cost most small businesses less than $300 per year and it is totally worth it. It’s worth it because your time is money and unless you were a business attorney in your prior life, you probably don’t know exactly how to word things and to whom they should be filed with the state and how. Having a solid business attorney as your registered agent is well worth it.

Types of Businesses

There are a lot of options for how you can structure your business, but most SMALL BUSINESSES IN VIRGINIA will opt to form as one of these three:

  • LLC (limited liability company) or; LLC-P (limited liability partnership)
  • S-Corp (small corporation)

The similarities:
LLCs and S corps have much in common:

    • • Limited liability protection. With both, owners are typically not personally responsible for business debts and liabilities.
    • • Separate entities. Both are separate legal entities created by a state filing.
    • • Pass-through taxation. Both are typically pass-through tax entities, and while S corps must file a business tax return, LLCs only file business tax returns if the LLC has more than one owner. With pass-through taxation, no income taxes are paid at the business level. Business profit or loss is passed-through to owners’ personal tax returns. Any necessary tax is reported and paid at the individual level.
    • • Ongoing state requirements. Both are subject to state-mandated formalities, such as filing annual reports and paying the necessary fees.

Differences in ownership and formalities:

Ownership. The IRS restricts S corporation ownership, but not that of limited liability companies. IRS restrictions include the following:

    • • LLCs can have an unlimited number of members; S corps can have no more than 100 shareholders (owners).
    • • Non-U.S. citizens/residents can be members of LLCs; S corps may not have non-U.S. citizens/residents as shareholders.
    • • S corporations cannot be owned by C corporations, other S corporations, LLCs, partnerships or many trusts. This is not the case for LLCs.
    • • LLCs are allowed to have subsidiaries without restriction.
      Ongoing formalities. S corporations face more extensive internal formalities. LLCs are recommended, but not required, to follow internal formalities.
    • • Required formalities for S corporations include: Adopting bylaws, issuing stock, holding initial and annual director and shareholder meetings, and keeping meeting minutes with corporate records.
    • • Recommended formalities for LLCs include: Adopting an operating agreement, issuing membership shares, holding and documenting annual member meetings (and manager meetings, if the LLC is manager-managed), and documenting all major company decisions.

Differences in management:

    • • Owners of an LLC can choose to have members (owners) or managers manage the LLC. When members manage an LLC, the LLC is much like a partnership. If run by managers, the LLC more closely resembles a corporation; members will not be involved in the daily business decisions.
    • • S corps have directors and officers. The board of directors oversees corporate affairs and handles major decisions but not daily operations. Instead, directors elect officers who manage daily business affairs.

Other differences:
Other differences between S corps and LLCs include:

    • • Existence. An S corporation’s existence is perpetual, but some states require LLCs to list a dissolution date in the formation documents. Certain events, such as death or withdrawal of a member, can cause the LLC to dissolve.
    • • Transferability of ownership. S corporation stock is freely transferable, as long as IRS ownership restrictions are met. LLC membership interest (ownership) typically is not freely transferable—approval from other members is often required.
    • • Self-employment taxes. S corporations may have preferable self-employment taxes compared to the LLC because the owner can be treated as an employee and paid a reasonable salary. FICA taxes are withheld and paid on that amount. Corporate earnings after payment of the salary may be able to be treated as unearned income that is not subject to self-employment taxes. For more information and whether this might apply to your particular situation, please contact your accountant or tax adviser.

Key Advice:

Partnerships with little to no employees:

If you’re a partnership that will not be immediately hiring a bunch of employees but rather paying subcontractors with 1099’s for the forseeable future, you should become a LLC, but elect to be taxed as an S-Corp. This is actually an option that you have. The key advantage to this is that you won’t have to pay any social security tax as a business. If you don’t have a payroll, you don’t need to be paying social security tax as a business. But you’ll still be set up as an LLC in this circumstance which best meets your needs as a partnership with no “actual” employees.


Partnerships with employees:

Become an LLC or an S-Corp. As an LLC, the owners are not considered employees. LLC’s do not pay income tax on earnings as a company. Instead, income is reported to the IRS and each owner or partner is given a From 1065-K which indicate your personal earnings for the year. This form 1065-K is what YOU pay your yearly income tax based on. So as an LLC you’re only responsible for paying taxes on what you earned as an individual whatever that amount may be. As an S-Corp, you have to file your business income taxes yearly.

Not a Partnership:

Become an LLC (not an LLC-P). This way you won’t have to file business taxes with the IRS. You will only have to report your earnings on your personal taxes in most instances. *Consult your CPA and/or business attorney as this is not guaranteed legal advice.

How Do I Pay My Virginia State Tax?

If you are selling tangible goods in the state of Virginia, you must pay the State a 5% tax rate on all items sold (as of 2/1/2013) to the state on a monthly basis. It’s as easy as signing up your business at http://www.tax.virginia.gov and paying by eform ST-9 with a secure online payment from your business bank account each month.
What is sales and use tax exempt in the Virginia? Anything such as website design, graphic design, consulting, advice, repairs, maintenance, and anything that is not a physical good. Physical goods such as business cards, batteries, tires, food, candles and any type of product is subject to 5% Virginia State Sales Tax.

5. What’s Your Budget?

What will your expenses be? What will each sale cost you? How much overhead do you have? What’s the hard cost of a product or service you offer before you sell it? This will determine your profit margins. If your margins are bad, you won’t be in business very long at all. When figuring out your profit margins, always consider the hard cost upfront, taxes and how this fits into your monthly expenses as well such as rent, bills, marketing etc. As long as there’s still some significant profit left over, you’ll be sitting well.

6. Marketing Your Business in Virginia

Marketing may easily be the single most important part of your business. Businesses who develop their branding from the beginning or their existence always tend to do better from a sales and marketing standpoint. Having a nice logo and branding is where it all starts. These days you can’t just think of a name for your business and go from there… You need to consider a few other things when coming up with a name. Is there a domain name available for this name? You probably want a .com domain and those hard to come by nowadays. You don’t want a website that has a neverendingongoingdomainnamewithtonsofwordslikethis.com. You want something that’s short and easy to remember and something that preferably has your name in it as well as what you offer. Think “Daniels Heating & Air” for example. That’s a good name because you can have the domain name www.danielsheatandair.com. But if all the good domains are taken you could be stuck with www.danielsheat-and-airconditioning.com which no one will remember, and radio ads are completely out of the question at that point. So go to www.1and1.com or any popular domain registrar’s website and start looking up domains that would be good for potential business names for your business. Think ahead. It will be worth it!

The next step is coming up with a great logo. You want something that fits your business that will be recognizeable to people. Your logo should contain colors that you like but not too many. You don’t want something too busy or with too much detail. You want a simple, clear, clean, sharp logo that will translate well to shirts, letterhead, signs, business cards, your website, Facebook, pens, you name it. Not just any design will do.

Once you have a logo designed, the rest can fall into place pretty easily. Get yourself some business cards printed from a local Virginia printer like Commonwealth Creative Marketing that does quality work for affordable rates.

No one uses the Yellow Pages anymore, so you’ll need a good website. Your competition already has a strong website with good SEO (search engine optimization), so you’ve immediately got some catching up to do on the web. Start thinking about what you want your site to say about you, what you want your customers to be able to see and do on your website. Plan it out with a web design company in Virginia like Commonwealth Creative Marketing. They can do great design work and build you a site that is makes you look outstanding on the web. Make sure you’re trusting a web designer that knows how to build a site with quality SEO practices. Otherwise you’ll end up with a nice site, but what good is it if no one can find it. Commonwealth Creative Marketing is your best bet for SEO website design in Virginia.

If you are an entrepreneur looking to start a business in Virginia and you have questions or just want to talk to someone who has done it themselves and works with new businesses everyday helping them, please give me a call anytime during the week. I’d love to offer any advice that I have and help you with marketing your new business.

-Marc Bethel,
Owner, Commonwealth Creative Marketing
(757)858-2020

Why We Love Working With Small Business

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Why We Love Working With Small Business

Early on in my career I got a “thrown to the fire” introduction to Corporate America.  Out of college I worked for a large corporation that had clients that were even bigger corporations.  Even though I wasn’t working for an “ad agency” like I’d wanted to, I was gaining solid business experience.  It didn’t take long to figure out I didn’t really enjoy the corporate atmosphere of being monitored all hours of the day, the ties, the shoes, the reports, the pep rallies and so on.  I kind of imagined myself doing my job unbothered by bosses and only bothered by people who needed my help… and me sort of acting as a central helper and having time to have fun while I worked.  I wanted to wake up excited to go to work, not dreading it. I also wanted to wear flip flops but I knew that was pushing it a little.

I finally gathered up enough “business experience” in my field that a real, respected Ad Agency deemed me acceptable to hire.  It was a great feeling and I finally felt like I was doing what I’d always wanted to do, working in the environment I’d always wanted to and with the types of people I dreamed about.  What I learned next was that the “Ad Agency World” had problems of its own.  That problem is that when one or two clients go away, so to do employees… practically overnight.  Stability was a problem, and although I felt like I was making a name and a lot of friends and advocates, I still found myself bouncing around from agency to agency for a few years.

During this whirlwind time I had the pleasure of working with clients of all sizes.  Big ones like Wal-Mart, SunTrust, Popeyes and Troy University… and little ones like an MRI/CT Scan office, a local bank and local restaurants.  They were all fun and unique in their own ways, but after a while I found that I preferred the entrepreneurial spirit of the small business owners over the corporate guys who had to dodge mazes of red tape just to decide whether they could answer me honestly or not.

I think the turning point for me was when I was working on the Window World account in 2008.  Window World is a national company with franchisees all over every state in the U.S.  They have a corporate office in North Carolina that I worked with but they didn’t force all their employees to work with us.  They let it be known that the company I worked with was their “preferred” agency and that we had created a fine library of creative print, web, radio and tv spots for them to choose from, but they also left Johnny the entrepreneur in Tucson the freedom to make, and run his own terrible ads featuring him, his son and the family dog.  I kind of liked this philosophy.  Although it would’ve been nice for our pockets if their corporate office forced all their franchisees to spend all their advertising dollars with us, it was rewarding to be working with a company that was willing to let their owners (their livelihood), make their own decisions and succeed or fail on their own.

I really liked talking to these individual entrepreneurs from all over the country, discussing how each of their markets differ and what “would and wouldn’t” work in certain places even when the product was the same in every place.  It was unique.  It was fun.  And the people spoke and breathed with the true American spirit.  They wanted to build their business into a success so that they and their families and children could live a good life.  They were grateful of their opportunities and wanted to make money.  That was it.  They weren’t in it to impress share holders, or to afford 3rd homes for all the titles that begin with the letter C.  They were normal, hard working people like you and me.  They were small business owners.

Right after I left that job, I started working with Matt, Sarah and company, whom I started my first company with about a year later.  We all shared the same philosophy that small businesses were the ideal client for us to work with.  Small businesses deserved nice marketing, quality websites, and “ad agency” creative, but at a fair price.  Small business website design quickly became a staple of our company, followed by discount printing and search engine optimization for small business.  Every client I talk with is different, but they all have the same entrepreneurial spirit that we share.  And that makes doing business an easy and special thing. Oh, and I get to wear flip flops 9 months out of the year.

-Marc

 

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Too Sweaty To Talk To Your Clientele? Get Over It!

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Too Sweaty To Talk To Your Clientele? Get Over It!

Summer Marketing is HOT!Look, I get it; it is really, really, REALLY hot outside.  And it feels really kinda gross and hot even inside.  And the idea of getting into your hot car and driving on the hot roads and having to summon the energy to engage with a client is exhausting and makes you crave a swimming pool or a trip to the Arctic.

I get it.

It does not matter at all.  You still have to connect with your clients.

You have to stay connected, especially during the summer months when everyone goes in different directions and the routines established by schools and holidays is all awry.  It is very easy to lose touch with your clientele during the summer season, and if you can manage to stay connected with a sense of humor and fun, they will SO appreciate you and keep you at top of mind for their next piece of business.  The alternative is that while you are out of sight you are out of mind, and a competitor works the relationship that YOU let lag.  You know, because it’s so hot and all.

So find a way that does not make you grumpy, and try to find some fun in what you have to do anyway.  Show up at their office with popsicles or smoothies or iced coffees, anything that acknowledges the heat and makes you a source of RELIEF.   Give everyone at the front desk a coupon for frozen yogurt or ice-cream.  And then keep your visit brief and upbeat so that YOU become the highlight of the day at your client’s office, shop, or store.

Staying connected during the summer lag will reap you benefits in the cooler months.  And your clients are worth the extra effort!

~Kim

Sum-sum-summertime…

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Sum-sum-summertime…

How does summer treat your business?

I am told by many of our clients that they track several changes to their receivables, contracts, etc. during the summer months.  That is not unexpected.  A HVAC client has had a really rough winter with it being so mild, so he is delighted with the idea of a hot sticky summer and lots of AC calls, repairs, and installations…not to mention the generators that sell like hotcakes during hurricane season.  small business marketing, seasonal marketing

Realtors, for whom we handle many sites, also tend to see a sharp spike in business during the summer month, for obvious reasons.   And since we live in a tourist town, the local restaurants also usually see increased business as well.

But what if your business does not have a natural uptick in the summertime?  How should you be using your most precious resources, your time and money?

Well, obviously, every business is different but there are certain things you should take the time to do, since you HAVE the time.  summer marketing, small business website design

1.  Review your marketing strategy: What is working for the past 6 months and what has not had good ROI?  Make changes dictated by your review.

2.  Start planning a new campaign: If you know your business has a busy time starting in October then start planning for it NOW instead of waiting until September; this may allow you to allocate more budget or just make better long-term decisions.

3.  Catch up on your online marketing: Update your website to make sure the SEO is current, check the various directories that concern your industry and the local market and make sure all your listings are up to date, and start really working your Facebook or Twitter to build some buzz for the upcoming Fall season.

4.  Investigate alternative marketing pieces: Review things you may not have checked out before; if you have been strictly marketing online, check out some print alternatives, and vice-versa.  Look into mainstream advertising, often it is not as expensive as you think.

If you don’t waste the time bemoaning the slow summer and instead choose to make it effective, you may just find summertime to be your most profitable time of the year! 

-Kim Finley, Partner & Sales Director of Commonwealth Creative Marketing.

 

8 Things NOT to do on Facebook

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8 Things NOT to do on Facebook

My internet marketing firm spends all day online. I personally spend a great deal of time on Facebook for business reasons, and have a large and varied friends list. This blog post will help you steer clear of bad etiquette on Facebook.

1. Stalking on Facebook is just as inappropriate as in real life. If you are commenting on and/or liking EVERYTHING that someone posts, that is a form of stalking.

2. Punctuation matters; there is nothing as aggravating as having to mentally insert the missing and or corrected punctuation while I am reading a post. Slow down, and have some respect for your reader.

3. Don’t use quotes every day as your status. It’s boring and lazy and tells your audience nothing at all about you, hence it is poor for engagement; and that is what supposedly you came to Facebook to do…you know, engage with actual people.

4. DO NOT FRIEND FARM!!!! That is the act of pillaging one of your popular, successful, networked friend’s list and sending friend requests to whom you think look cool, or a good business target, or whatever. It is rude, and it is the height of bad online manners.

5. DO NOT accept people as friends if you think you are being friend farmed. If you don’t know them, click ignore. There are no trophies for having the biggest friends list, and why the heck do you want to interact with someone you do not even know?! Unless they are in your very favorite band, say no. This is how friend farming will finally come to a halt.

6. Grammar matters too: Google it if you have to or re-word, but when you use the incorrect form of your, their, or wear, it makes it hard for people to read.

7. And whatever you do, do NOT be judgmental on someone else’s wall; you may misunderstand their humor, you may not know the inside joke, the back-story, or the reality on someone’s post, and for you to pass judgment in a snarky, superior way ON THEIR WALL is unprofessional.

8. Do not post links to or about your business, charity, project, or passion to someone else’s wall without asking first. It is both presumptuous and rude, and is akin to putting a sign for your business in your friends’ yard without asking.

In other words, be kind, be intelligent, be polite, be positive. Just like in real life, if you don’t have anything nice to say don’t say anything at all. As a partner in a small business marketing company, I can promise that obeying all these rules will make your Facebook world a better, happier, more cheerful place.

~Kim Finley, Sales Director

Yes, Small Business CAN Play with the Big Boys!

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Yes, Small Business CAN Play with the Big Boys!

The Internet has leveled the playing field for small business in many ways, even with larger companies having the advantage of big bucks.  Large advertising dollars can pay for expensive pay-per-click campaigns, expensive social media contests with expensive prizes and expensive tie-ins with other forms of advertising.

So how have small businesses made up the difference?

1. A visually strong website that contains calls to action and instructions for your visitor.  If you do not have a qualified person on staff, engage an ethical, small business website design company to help.

2. Always consider a niche, specifically, your niche.  You don’t need to appeal to EVERYBODY on the web, so don’t spend your money or your time doing so.  Target market to a very narrow segment of people who NEED your solution to their problem.

3. Execute search engine optimization (SEO) practices to the extent you can afford.  What you can’t pay for or outsource to a professional, do yourself.  It is a time investment that can pay off dramatically in revenue, if done right.

4. Set up your analytics to run on your website, and TRACK everything!  Design your sales funnels and your conversion goals and monitor your results, tweaking where you can.  Data is power.
Remember, Google has an interest in a level playing field, and the consumer does too.  So you CAN beef up your online presence without breaking the bank.

~ Kim, Sales Director