This is a difficult question for any small business owner to answer as incorporating a business has plenty of legal and tax-based advantages, but can also be a potential minefield, a massive expense, and ultimately not worth the hassle for the gains and returns made.
So, before we go any further, let’s take a quick look at the major advantages of incorporating your business. First up, there’s limited liability—probably the single most attractive benefit of incorporation. As a sole trader or partnership, if the business incurs debts then you personally may be forced to liquidate or turn over assets to pay for them. This can include homes, property, vehicles—fortunately, your dog will remain safe from these legal actions. As a corporation, the corporate entity takes on the financial responsibility of guaranteeing any loans made, meaning that investors and shareholders are only responsible for what they put in to the company.
Secondly, incorporation grants a much greater degree of income control to the shareholders and executives. By incorporating your small business, you give yourself the option of determining precisely when you, as a shareholder, receive income, which can definitely work in your favor tax-wise. Instead of getting your income when it’s received, being incorporated allows you to receive a dividend based on your share value at a time when the taxation environment is more to your advantage.
Another advantage of this is that anybody can be a shareholder—your spouse, your kids, heck, even old Uncle Albert, if needs be—meaning that income can be divided among family members in different taxation brackets. This is a nifty little benefit if you want the taxman to keep his grubby little paws off your family’s hard-earned cash!
Unlike sole traders, who can tail off if the owner dies or retires, corporations exist in perpetuity which allows the ownership to change through whatever reason and still carry on existing as a legal and commercial entity long after the esteemed founder has shuffled off this mortal coil (or earned a stack of cash and run off to Honolulu to spend their retirement drinking piña colada and debating the merits of the grass skirt.)
Lastly, there’s the fact that people are more likely to do business with a company with Inc., Llc., Ltd. or Corp. after the name. Contractors may find, for example, that certain companies will only deal with incorporated companies as it gives them an air of legitimacy and helps reduce the risk of becoming associated with a rogue or fly-by-night outfit.
However, despite all the great-sounding benefits, incorporation does have its drawbacks. For example, be prepared for you paperwork to go through the roof. You may find yourself needing to hire a lawyer or accountant to help yourself through the arcane process of incorporation, and to deal with the red tape to come afterwards. It is an expensive process to begin with, so make sure that the potential tax pitfalls are not more than you stand to gain from the process. Have an accountant look at your finances and give you proper, personalized advice before you decide to take the plunge.
Whether it’s a matter of making the most out of your marketing campaign and improving your ROI or capitalizing on word-of-mouth referrals, never let a lead slip through the crack—they could be your next diamond in the rough. Every single lead you receive through your business should be considered that one magic client who can help you elevate your business, taking it from where it is now to where you want it to be. The power of follow-up is immense and should be considered one of the best friends of bootstrapped budgeters.
First, it should be noted that trends indicate positive results when business owners verbalize their follow-up efforts with their prospective clients as “reconnecting” instead of “following up;” it’s much more personal and will help you achieve a better business relationship. For example, “Hello, this is Derek Heck from Bootstrapping Blog and I’m reconnecting with you in regards to our last conversation.” Pretty simple right? Yet countless business owners fail to do this on a daily basis. It’s similar to neglecting to insulate your pipes or letting a leaky faucet go unchecked—it seems minor at the time, but you eventually end up losing a lot of money through this type of negligence.
Or perhaps you do have good intentions and plan to follow up, but just haven’t had the time. Well, I’m sincerely asking you to burn your Procrastinator’s Creed contract and jump into action. If not, then your lead goes from blazing hot, to lukewarm, to somebody else’s client! Plus, by following up promptly, you will be telling your prospect volumes about how you’ll treat them as a client, meeting deadlines on time and providing a close watch over their account. Remember, clients don’t just want to know that they’ll get the service or product they’re buying, they want to know that they will be comprehensively taken care of.
So what’s a good timeframe for following up? Probably about a week later. You don’t want to come off as a telemarketer selling jewelry cleaner and calling back the next day. Let them breathe a little and have time to look over your proposal. And make sure you set a solid date and time, indicating when you’ll be reconnecting—call them exactly when you say you will! And make sure they actually write your appointment down when you plan it. Don’t be afraid to specifically ask them to get their planner out and write it down. If you don’t, you’ll end up getting more flakes than a bowl of Wheaties.
And how about a “blind” follow-up? You won’t always have the opportunity to speak with your prospect in the initial phase. For example, you may receive a lead through your website—if someone signs up for your newsletter. In this case, you should develop a standard follow-up template or autoresponder. Remember, the Web is faceless and without emotion—you need to constantly think of ways to reach out to people and remind them that there’s an actual human behind your website
Here’s an example a website lead follow-up:
I see that you visited my blog at www.bootstrappingblog.com recently. I hope you’ve been enjoying our content and have been able to apply some of what you’ve read to your own business.
Call-to-Action Paragraph.
And in case you missed it, I thought I’d pass this article along:
“It’s nothing personal.” Bullspit! There’s no such thing as nothing being personal in the business world. No matter who’s involved in a business equation, people are either spending money they worked hard to earn, or are looking to earn the other person’s money through hard work. Unless you’ve won the lottery, any blood, sweat and tears poured into your business makes the scenario very personal. Read Full Article
Please feel free to contact me and let me know how I can help you with your business. I eagerly welcome all inquiries.
Now go get ‘em tiger!
Shiny wrappers promising delicious treats inside, perfectly tied bows sealing seductive sweets within, colors of the rainbow catching the eye at every angle…I’d like to address the kid-in-the-candy-store phenomenon and how it applies to your marketing (more specifically, how it shouldn’t apply). Through my years of experience of working with my clients and trying to educate them on their marketing and working with a bootstrapped budget, I’ve noticed that they really appreciate it when I slap their hands and help them slow down before they burn through their budgets like a chocolate-smeared kid blowing through his allowance in a candy store. Granted, there are some very effective marketing methods out there today, but without the occasional hand-slap, you might get as excited as a child and buy up every shiny new marketing solution that you see.
First, the following is not supposed to be considered a popularity contest, and by no means am I claiming to be the coolest guy out there-well, my five-month-old son may think I’m pretty cool! But what I’d like to ask you is: Who do you know? I don’t want to know if you’ve ever seen James Woods in a Starbucks or if you’re the type of person who gets the thumbs up from everyone you pass. I just want to see if you can develop a list of people you know. Why develop a list? Because, whether you’re a first-year small-business greenhorn or a veteran badass, creating a contact list is one of the best ways to get your marketing wheels rolling. And…uh huh, you know what’s coming here…it’s free!
Instead of buying the first shiny marketing package that catches your eye, set aside a significant period of time and develop a list of all the people you know. By first creating a list of contacts that you can solicit and present your business to, you’ll be taking advantage of verified, warm leads; leads you didn’t have to spend a single marketing dollar on. The first phase of creating your list should be done through a stream of consciousness, writing down every single name that comes to mind. Subsequently, you’ll use a filter and qualify each of the name’s you’ve written down. Try categorizing them into Direct Purchase, Referral Prospects, Barter Candidates and Sleepers.
- Direct Purchase: Who on your list is ready to buy? Which names did you write down that fall under your classifications for your ideal client?
- Referral Prospects: Want to double or triple your new contact list? Then ask yourself “Who do they know?” For example, let’s say you’re a used-car salesman. Okay, so you’ve got your brother on the list, but he’s always been a new-or-nothing kind of guy and though he loves you, refuses to buy from you. Instead of testing this familial tie’s strength, simply think of who he knows or ask him if he thinks any of his friends might be interested. No matter what industry they’re in, business owners would do well to view their company as a network marketing company or an MLM. Look beyond the surface; there are many levels to a solid business.
- Barter Candidates: Who on your list could you trade services/products with? Perhaps your neighbor doesn’t need a car at this time, but you can still ask him if he’d be willing to trade you a few hours of his skills for some car repair discounts you get through your vendors.
- Sleepers: These are the people you just can’t seem to categorize. Perhaps you only briefly met them on the street once and don’t have an actual relationship with them. Either way, you should never assume a contact is worthless until you’ve made the effort to market to them.
Just as we encourage equality in society, so shall it be with your business. Never assume anything about your prospects or contacts until you’ve dealt with them directly-after that, you can judge them as much as you’d like.
Look for our future feature article on follow-up to help you capitalize on your contact list.
I once read a sign in a locker room that has always stuck with me: “If You Hit Your Hand with a Hammer Every Day, It Will Never Get Better.” Before we jump into the main significance of this message, I’d like to point out that I saw this sign years ago and still remember it quite clearly. The message was quick and to the point and was accompanied by a simple image. Remember there’s a time and place for longer content. Think about the audience and location of your ads before you develop your copy. Not to perpetuate any derogatory stereotypes, but guys in a locker room probably aren’t looking to read a whole lot. A quick and tempting ad has the power to persevere and remain locked into your audience’s minds. Okay, so now that I’ve gotten my standard tangent out of the way, we’ll get into the marketing meat and potatoes I originally intended.
Unless you’re one of those athletes who continued hitting yourself in the head with that hammer, then the sign’s message should be quite clear: Your injury will never heal if you continue participating in your sport and don’t do anything differently in your routine. As I am just short of the athletic talent level of Tiger and Gretzky, I decided to pursue the limitless possibilities of the Internet, and have remembered this sign for a different reason. In my sapling days, when I was a young and inexperienced entrepreneur, I sometimes found myself experiencing aggravating defeats in my marketing ventures. The element that made them the most aggravating was that my lack of success was consistent. It seemed that even though I had some great input from some marketing gurus and had applied my own Einstein-level of genius that my ads just weren’t gaining the traction I thought they were capable of. Then I saw the sign…literally.
When I read that sign, I realized I’d been hitting my injured marketing campaign with a hammer and expecting it to get better. I was so confident in the ads I had going that I managed them like a desperate soon-to-be-vagabond in Vegas, playing the same number over and over again in roulette, thinking that I was improving my chances simply because of numbers and time elapsed. Your bootstrapped marketing campaign should be looked at the same—you’ve got an equal chance of failure or success with every prospect. Granted, sales and marketing does ultimately come down to a numbers game, increasing your chances of a sale with every person you ask, but you are a bootstrapped budget and can’t always afford to play the game of large numbers.
Lesson learned: Whether it came down to wrong geographical location, incorrectly targeted demographic, outlying economic factors…I came to realize that even though I had some fantastic ideas and approaches involved in my ads, they simply weren’t working. Don’t hold on too long to ads or business methods that aren’t working or you’ll end up with an extremely bruised and battered hand. A particular method to help you decide how well something’s working for your business is conducting an A/B split test. For example, create two versions of an ad for the same exact product/service. To ensure accuracy, make sure you disseminate those ads equally among demographics and locations. Then, measure and compare the results of ad A versus ad B. Go with the one that garnered the best results, and then use that ad to create another split test down the road. Because even though you may have managed to put the hammer down, you may still be able to look into some business supplements to take you to an even higher level of success.
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Unless you’re an uber famous Hollywood star, then chances are you ask this question almost every time you purchase something (unless it’s toilet paper): Why should I buy? For one thing, some Hollywood stars probably do use their money as toilet paper. But the point is money isn’t exactly an issue for them, so they don’t put much consideration into most price tags they come across. For us Average Joe Consumers though, we’re on a constant hunt for value. We’re like a real-life version of The Price Is Right; with every successful move hinged on the price of a product or service. Now, apply this mode of thinking to your prospect’s perspective.
Every time a potential client is presented with your product or service, they will ask themselves why they should buy from you. This is a natural reaction—people have a natural propensity for procrastination. However, when you multiply this by the effects of today’s economy and then multiply that by the thousands of new small businesses entering the marketplace on a daily basis, well, you sure have to give them a helluva good reason why they should buy from you.
Now, hopefully you’ve been following along and enjoying our articles, so perhaps you’ve heard us mention unique selling point (USP). Your USP is the answer to your prospect’s question as to why they should buy. Make it incredibly obvious what makes your business different from the masses. These are the one or two gems that make your business a necessity in your prospect’s life. Take note of an important element in that preceding sentence. You need to make sure you keep your focus on just a couple distinguished aspects of your business. Include more than that in your marketing and branding efforts and you’re going to sound like a recent graduate’s resume, listing everything from “habitat improvement” for mowing lawns to “sales experience” because they buy groceries on a regular basis.
Spread your apparent specialties too thin and throw fluff at your prospects and they will see through you. And remember, Newton’s Third Law here: for every action there is an equal and opposite reaction. This can go two ways for word of mouth (WOM) marketing. Most people only talk about getting clients through WOM, but if you come off as the recent graduate in your business pitch, then you may lose clients through WOM. Just think about all the countless blogs and online forums here on the Web today. An obvious trend is people’s absolute love of discussing hate. People are just tickled pink that they now have the opportunity to complain about anything at all that bothers them. Whether it’s the fact that one of their feet is bigger than the other so they have to buy two pairs of shoes or that they visited some person’s website and thought it was nothing more than a cheap ploy, word will spread about your business.
Your specialty could be the fact that you’ve never once been late or missed a deadline or possibly your stunning customer service which never allows the phone to ring more than three times and the promise that they’ll get a live person on the phone every time. Write down your business’ top 10 attributes, and then narrow that last to your top one or two. Now, make sure you’re striving for attributes that are not only top-notch, but are also distinct from other competing businesses.
Just be ethical, present your business in an honest manner, keep your USP simple and laser-beam focused, and prospective clients will then know why they should buy from you, and only you.
Check out these other articles for more information: Well I Should Hope So and People Buy Benefits, not Features