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Posted on 06/13/2013 at 11:52 AM | Permalink | Comments (0)
Think registering your business sounds like a perfunctory and insignificant task? Think again.
Mustafah Abdulaziz for The New York Times
For her spa, Debbi Ramsey of Philadelphia went through six names in two years before she settled on Natural Wellness & Spa. |
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The registration process forces you to confront a battery of questions that should be part of the bedrock of your business plan. Too often, new business owners regard registration as just another bureaucratic ticket to punch, and they fail to focus on important related steps like claiming a business name, choosing a structure and securing all of the requisite permits. This sort of rush-to-the-wedding approach has become more tempting now that online services allow businesses to do these tasks with little thought. |
Unfortunately, these matters can rear up later as trademark disputes, tax problems, bureaucratic snags or costly name changes. “If you treat this as paperwork and box checking, you’re missing some of the issues that will be critical to your business,” said Therese Flaherty, director of the Wharton Small Business Development Center at theUniversity of Pennsylvania. “You ought to be inquisitive about that. If you’re not, it will come back and bite you later.”
Here are some issues you should think through before you register.
THE NAME GAME There are many examples of companies that picked a name without doing the proper due diligence and then were forced to change. This can be costly: You may have to throw out product, packaging, signs, stationery, business cards and all of your branding and marketing efforts. Or you may become embroiled in costly litigation and have to pay damages.
“The first thing you should think about is the name,” said Esther Barron, clinical assistant professor at the Northwestern University School of Law and director of its Small Business Opportunities Center. “Are there going to be trademark issues? Is somebody going to sue you for using that name? Can you stop other people from using it?”
Even small local businesses can be tripped up if they do not get the name right at the outset. Debbi Ramsey, the owner of a spa in Philadelphia, has gone through six names in two years. One choice had been taken. She switched to Bodyworks but customers said it reminded them of an auto body shop. Next she tried One Touch Body and Spa, but she got dirty looks when she went to the city for a permit. “They’re looking at me over their glasses with this ‘touching body’ in there,” she said. “I tried to explain that I do therapeutic massage and guys were coming up to the counter and saying, ‘Yeah, right, where’s your place?’ ”
Eventually, Ms. Ramsey settled on a more wholesome name: Natural Wellness & Spa. But getting the name right cost her more than $1,000 in expenses plus innumerable annoyances. “I had no idea,” she said of the ordeal. “It just added to the drama of starting a business.”
Do an Internet search. Check the United States Patent and Trademark Office database to see if your name is already trademarked. Scan trade association directories in your industry. Check with your county clerk’s office, state department of revenue and secretary of state to see whether your name is similar to that of an existing business. Search your state’s database of corporations and limited liability companies.
If you plan to do business interstate or on the Internet, consult registries in other states. If you plan to have a Web site — and you do plan to have a Web site, don’t you? — check to see if the domain name or something close is available.
In simpler cases, a layman can do the tasks associated with researching a name. good business or university librarian can help immensely. When more is at risk, you may want to hire a business or intellectual property lawyer to assure that an expert has turned over all the right rocks.
Peri Pakroo, a small-business consultant in Albuquerque and author of “The Small Business Start-Up Kit” (Nolo, 2010), suggests that businesses ask themselves a simple question: How disastrous would a name change be? If a change would be catastrophic, you should err on the side of more thorough search and consider hiring a lawyer and trademark protection.
PICK YOUR STRUCTURE Another central question to confront is your type of business entity. The choice should be a fundamental part of any business plan, something you think through before you register.
You must declare your form of entity (sole proprietorship, partnership, corporation or limited liability company) when getting a federal tax identification number and some business licenses. Different types of entities have different regulatory and tax requirements. In general, corporations, limited liability companies and limited partnerships must file with their state. Businesses that do not form corporations may be deemed sole proprietorships or general partnerships by default and have unlimited liability.
OBTAIN A FEDERAL TAX ID Most businesses will need a federal employer identification number — even if they do not have employees. Sole proprietors and some single-person limited liability companies can use their Social Security numbers.
You will typically need an employer identification number for local tax registration forms, federal tax returns and local business licenses. Happily, obtaining an E.I.N. is fairly easy and can be done online or over the phone.
REGISTER A FICTITIOUS NAME Any company with a trade name that does not include the legal names of owners (for sole proprietorships and general partnerships) or the registered name of a corporation, limited liability company or limited partnership name must file for what is known as a fictitious business name (sometimes known as a trade name or DBA). Depending on the jurisdiction, this may be done at the state or county level.
Do not neglect this step. “That’s an important thing, because a lot of times you won’t be able to open a bank account without it,” Ms. Pakroo said.
Again, do your due diligence to avoid name disputes.
FILE REGISTRATION AND PERMITS Now comes the part you have been waiting for — registration. In most areas, businesses must register with the city or county tax collector. This step goes by several names including business-tax application, tax registration or business-license application. This basically allows local governments to keep track of businesses they intend to tax. You will have to pay a fee and, in some jurisdictions, you may have to pay estimated taxes.
In many states, businesses that sell tangible goods must also obtain a seller’s permit that allows them to collect sales tax from customers (service businesses may be exempt). “Do not blow the sales permit off,” said Rich Stim, a lawyer and co-author of “Wow, I’m in Business” (Nolo, 2008). “That would be a big mistake. You’re dealing with tax people, so it will get ugly quickly.”
Some businesses may face additional requirements like planning and zoning boards, regulatory agencies or professional licenses.
ASK QUESTIONS AND LEARN Unfortunately, these processes can be confusing. Ms. Flaherty of Wharton suggests that entrepreneurs view registration and all the related questions as part of the learning and networking of building a business. With that mind-set, a founder will add value to the venture.
“It’s tempting to just think this is a bunch of meaningless paperwork and bureaucracy,” she said. “But it’s a mistake to treat it like that. A little bit of inquisitiveness is important.”
Posted on 06/13/2013 at 11:45 AM in GAP Entrepreneurship/Start-up | Permalink | Comments (0)
Your customers are talking about you — and the whole world is listening.
Local review sites are reshaping the world of small business by becoming the new Yellow Pages, one-stop platforms where customers can find a business — and also see independent critiques of its performance.
How do you manage your reputation when everybody is a critic?
For some business owners, this is a terrifying prospect that seems more like mob rule than the wisdom of crowds. Negative reviews can hang an albatross around your neck if they appear prominently in search results. Happily, there is a big upside: referrals from happy clients are traditionally the best source of new business — and online forums are powerful word-of-mouth. The review process has been democratized.
But managing your online reputation requires a whole new skill set, including monitoring the online conversation and engaging with customers and the tech-savvy to promote yourself in the best channels. These skills are becoming essential for mainstream businesses. According to a survey by the Opinion Research Corporation, 84 percent of Americans say online reviews influence their purchasing decisions. (Still not convinced? Tell us why.)
“Social media for business now is life or death,” said Dan Simons, a restaurateur in the Washington area who closely monitors these forums. “You could open a business and do everything right, but if you’re unaware of these social media you will perish. Social media can take a business and put a bullet in it.”
Monitor
Customers are abuzz with opinions — the only question is whether that buzzing reaches your ears. The first step is to tune in.
Do a vanity search of your business name and see what comes up. Are you easy to find? What is the first impression? Do you have a Web page and blog, and are they kept up do date? Is your business reviewed in online forums or blogs?
Try to see your business through the eyes of a customer. Indeed, customers increasingly shop with their browser. One study by the Yellow Pages Association and comScore found that local search for businesses, products and services grew 58 percent last year and reached 15.7 billion searches, more than a tenth of overall search traffic.
Study local search sites like Yelp, Citysearch and Yahoo! Local. Forums for customer feedback have sprung up everywhere —_Google Maps, Amazon, Angie’s List, TripAdvisor, OpenTable, Epinions and a myriad of online communities and niche sites.
“Know who the influencers are,” said Pete Blackshaw, executive vice president of Nielsen Online Digital Strategic Service and an expert on consumer-generated media. “There are going to be some megaphones that matter more than others.”
Build systems to stay on top of this online buzz. A Google alert can automatically inform you when your business is mentioned in a review, blog or online publication. Some review sites have features that automatically send e-mail alerts to business owners when a review is posted.
Twitter is becoming an increasingly popular microblogging platform for businesses and customers and you can keep track of what is being said about your company with tools like search.twitter.com, TweetDeck, or Twendz .
Manage
Once you’ve tuned into the online conversation, the tricky part is managing it.
Claim your listing on the local search sites. Many of these listings are free (although some sites offer premium services only to advertisers). The more detailed your profile, the more readily your business will appear in search results.
Responding to reviews is a delicate act of customer relations. A snarky review may make your blood boil — if so, step away from the keyboard and calm down until you can respond graciously.
“Hands down, when I’ve seen a conflict, it’s usually because the business owner is enraged, furious or personally hurt,” said Jeremy Stoppelman, chief executive and co-founder of Yelp. “Give yourself some time to cool off and engage in a respectful, courteous manner.”
You don’t need to respond to every review, especially if the overall consensus is positive. A negative review, however, demands special attention. Some business owners post public responses to apologize and try to win back the customer. Some privately message the reviewer.
Even hostile critics sometimes are mollified by a polite response from the merchant. “They are so disarmed,” said Mr. Simons, one of the owners of Founding Farmers restaurant in Washington. “I’ve had people immediately go back in and edit what they wrote.”
Jeff Diamond, co-owner of Farmstead Cheeses and Wines, with stores in Oakland and Alameda, Calif., responds to every review on Yelp — and he’s had more than 100. In one case, a reviewer complained that the person behind the counter was rude. Mr. Diamond sent a private message to the customer, apologized and asked for details. It turned out the employee who helped this customer was hard of hearing. By the end of the exchange, this onetime critic had joined the store’s wine club. He has since become a loyal customer.
“The most important thing is not to argue with your customer,” Mr. Diamond said. “It’s to listen to your customer. Try to put yourself in the customer’s place.”
Another no-no is posting false reviews. Don’t write fake reviews to puff up your business or trash a competitor. Businesses have been publicly exposed for shilling and suffered major embarrassment. Earlier this month, authorities said the cosmetic surgery clinic Lifestyle Lift would pay $300,000 in civil penalties after an investigation by the New York State attorney general’s office found that employees had posed as plastic surgery patients to write glowing reviews of their own business — a bogus grass-roots movement known as “astroturfing.”
“If you’re stuffing the ballot box and that is detected — which it almost inevitably will be — the backlash will be really significant and come back to bite you,” said Kara Nortman, senior vice president of publishing at Citysearch.
Indeed, the surest way to generate positive reviews is not to ghost-write them but to focus on good service. “It’s all common sense — the best way to ensure that you have positive reviews is to offer good products, good service, have integrity and be diligent,” said Greg Sterling, a San Francisco-based Internet analyst who specializes in small business and local search. “It’s really just the rules of dealing with people in the real world, translated online.”
Fortunately, online reviews can help you do just that. These reviewers are a virtual army of secret shoppers who are telling you exactly what works and what doesn’t.
Look for patterns. Are people consistently complaining about poor service? Are they constantly praising something that you can emphasize to differentiate your business?
At Founding Farmers in Washington, online reviews provide so much feedback that Mr. Simons stopped hiring secret shoppers. These comments have led managers to revamp how the front desk handles reservations and walk-ins, mark the vegetarian menu more clearly, coach servers who got bad reviews and even fire some employees.
“I would say 97 percent is genuinely useful,” said Mr. Simons. “You can tell the reviews that are written by a competitor or just someone who’s mean and angry. But generally people don’t go to a restaurant to get annoyed, and there’s at least some nugget of valuable information.”
Promote
These platforms do more than help you protect your good name. They can also serve as tools for marketing, analytics and aiming at customers.
Becoming an advertiser can buy you more ability to work the crowd. Benefits vary by site, but advertisers generally get more prominent display and other tools. On Yelp, advertisers can highlight a favorite review to appear at the top of their page (the other reviews are ordered according to how recent they are and how many user votes they received). On Citysearch, advertisers can get help with copywriting or video commercials and have their content pushed out to partner sites like MapQuest, AOL CityGuide and MySpace.
These platforms also can help business owners mine customer information. For example, Yelp has a dashboard that allows business owners to keep track of page views and offer promotions.
Danny Leclair, co-owner of Studio DNA hair salons in Los Angeles and Santa Monica, Calif., checks to see how many people come to his Yelp page — and often sees spikes in traffic after special offers or new reviews. He also uses tools like statcounter.com to see what pages his clients are coming from when they click on his site.
Once he started mingling in these online communities and using their tools, he got immediate traction. He said 50 percent of his new business now comes from Yelp, 30 percent from Citysearch and 10 percent from Google searches.
“My business began to grow exponentially,” Mr. Leclair said.
Posted on 06/04/2013 at 03:16 PM in GAP Random Topics | Permalink | Comments (0)
SAN FRANCISCO — Three weeks after Curtis Kimball opened his crème brûlée cart in San Francisco, he noticed a stranger among the friends in line for his desserts. How had the man discovered the cart? He had read about it on Twitter.
Curtis Kimball, owner of a crème brûlée cart in San Francisco, uses Twitter to drive his customers to his changing location.
“I would love to say that I just had a really good idea and strategy, but Twitter has been pretty essential to my success,” he said. He has quit his day job as a carpenter to keep up with the demand.
Much has been made of how big companies like Dell, Starbucks and Comcast use Twitter to promote their products and answer customers’ questions. But today, small businesses outnumber the big ones on the free microblogging service, and in many ways, Twitter is an even more useful tool for them.
For many mom-and-pop shops with no ad budget, Twitter has become their sole means of marketing. It is far easier to set up and update a Twitter account than to maintain a Web page. And because small-business owners tend to work at the cash register, not in a cubicle in the marketing department, Twitter’s intimacy suits them well.
“We think of these social media tools as being in the realm of the sophisticated, multiplatform marketers like Coca-Cola and McDonald’s, but a lot of these supersmall businesses are gravitating toward them because they are accessible, free and very simple,” said Greg Sterling, an analyst who studies the Internet’s influence on shopping and local businesses.
Small businesses typically get more than half of their customers through word of mouth, he said, and Twitter is the digital manifestation of that. Twitter users broadcast messages of up to 140 characters in length, and the culture of the service encourages people to spread news to friends in their own network.
Umi, a sushi restaurant in San Francisco, sometimes gets five new customers a night who learned about it on Twitter, said Shamus Booth, a co-owner.
He twitters about the fresh fish of the night — “The O-Toro (bluefin tuna belly) tonight is some of the most rich and buttery tuna I’ve had,” he recently wrote — and offers free seaweed salads to people who mention Twitter.
Twitter is not just for businesses that want to lure customers with mouth-watering descriptions of food. For Cynthia Sutton-Stolle, the co-owner of Silver Barn Antiques in tiny Columbus, Tex., Twitter has been a way to find both suppliers and customers nationwide.
Since she joined Twitter in February, she has connected with people making lamps and candles that she subsequently ordered for her shop and has sold a few thousand dollars of merchandise to people outside Columbus, including to a woman in New Jersey shopping for graduation gifts.
“We don’t even have our Web site done, and we weren’t even trying to start an e-commerce business,” Ms. Sutton-Stolle said. “Twitter has been a real valuable tool because it’s made us national instead of a little-bitty store in a little-bitty town.”
Scott Seaman of Blowing Rock, N.C., also uses Twitter to expand his customer base beyond his town of about 1,500 residents. Mr. Seaman is a partner at Christopher’s Wine and Cheese shop and owns a bed and breakfast in town. He sets up searches on TweetDeck, a Web application that helps people manage their Twitter messages, to start conversations with people talking about his town or the mountain nearby. One person he met on Twitter booked a room at his inn, and a woman in Dallas ordered sake from his shop.
The extra traffic has come despite his rarely pitching his own businesses on Twitter. “To me, that’s a turn-off,” he said. Instead of marketing to customers, small-business owners should use the same persona they have offline, he advised. “Be the small shopkeeper down the street that everyone knows by name.”
Chris Mann, the owner of Woodhouse Day Spa in Cincinnati, twitters about discounts for massages and manicures every Tuesday. Twitter beats e-mail promotions because he can send tweets from his phone in a meeting and “every single business sends out an e-mail,” he said.
Even if a shop’s customers are not on Twitter, the service can be useful for entrepreneurs, said Becky McCray, who runs a liquor store and cattle ranch in Oklahoma and publishes a blog called Small Biz Survival.
In towns like hers, with only 5,000 people, small-business owners can feel isolated, she said. But on Twitter, she has learned business tax tips from an accountant, marketing tips from a consultant in Tennessee and start-up tips from the founder of several tech companies.
Anamitra Banerji, who manages commercial products at Twitter, said that when he joined the company from Yahoo in March, “I thought this was a place where large businesses were. What I’m finding more and more, to my surprise every single day, is business of all kinds.”
Twitter, which does not yet make money, is now concentrating on teaching businesses how they can join and use it, Mr. Banerji said, and the company plans to publish case studies. He is also developing products that Twitter can sell to businesses of all sizes this year, including features to verify businesses’ accounts and analyze traffic to their Twitter profiles.
According to Mr. Banerji, small-business owners like Twitter because they can talk directly to customers in a way that they were able to do only in person before. “We’re finding the emotional distance between businesses and their customers is shortening quite a bit,” he said.
Posted on 06/04/2013 at 03:12 PM in GAP Entrepreneurship/Start-up | Permalink | Comments (0)