Archive for June, 2009

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Capitalizing a new business entity is a critical step of the formation process. Failing to take the step can lead to serious legal problems if the entity is ever sued. So, what is capitalization and what steps must be taken?

Capitalizing Your Corporation

“Capitalization” essentially refers to funding your corporation. In essence, you are providing substance to the entity in the form of money or property. Typically, the funding process works in two ways.

Corporate Stock

You must own stock in a corporation to be considered a shareholder. You are already familiar with this concept if you trade on the stock market. For instance, assume you bought stock in Sirius Radio in anticipation of Howard Stern moving to the station. You purchased stock through a brokerage or retirement vehicle by exchanging money for shares. Technically, you are a shareholder in the corporation. Your own corporation is no different.

The fact that you paid money to have a corporation formed does not make you a shareholder. You must exchange property, cash or services to obtain stock from the entity. Only then are you a shareholder in the entity. This is more easily explained with an example.

Assume I start a corporation for the purpose of providing consulting services to other businesses. The corporation is formed with 10,000 shares and I am going to be the sole shareholder. I have cash and certain assets that I am going to use as part of the business. I decide to exchange $3,000, a copier, fax machine and computer equipment for stock in the entity. This exchange should be reduced to writing, but will constitute the capitalization of the corporation.

Corporate Loan

You can also loan money to a corporate entity for start-up costs. There is no prohibition against a shareholder providing money to a corporation. The loan process should not completely replace the purchase of stock. From a tax perspective, however, dividing your initial capitalization into a partial loan can have distinct advantages.

Inadequate Capitalization

State laws govern the formation of a corporation. Inevitably, these laws set forth amounts or formulas for determining the minimum capitalization amount required for a corporation. You must review the laws in your state to determine the amount and make sure you meet the contribution minimums.

Failure to properly capitalize you corporation can result in disaster if the entity is ever sued. Simply put, the suing party may argue that the lack of capitalization means the corporation was never a viable entity because it had insufficient funds to back debt obligations. The argument gets complicated, but suffice to say you are in serious trouble if a court agrees with the argument. Typically, the court will “set aside” the corporate entity, exposing each shareholder, director and officer to the risk of personal liability. Obviously, such a scenario would be a disaster.

In Closing

If you’ve purchased a corporation from online service, you have work to do. Make sure you determine the minimum capitalization requirements in your state and comply with them.

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Today, in North America, almost 70% of households have access to the Internet. It has evolved to the point where the Internet has become an integral element in the way business is conducted, and is shaping the way business will be conducted in the future. Most consumers these days research a product or service on the Internet before making their purchase. So, in this day and age, it could cost you not to have a website. Listed below are 5 reasons why you should employ an experienced web designer to construct a custom website for your small business.

Credibility & Identity Building
Like it or not, your potential customers are going to judge the quality of your products and/or services based on presentation and image. Therefore, an aesthetically pleasing web site will give you and your company more credibility in the eyes of you customers or clients.

Lower Your Expenses
Why spend thousands of dollars on static traditional media such as brochures? If there was ever a change in your business, such as an expansion or additional products/services, it would require printing all new corporate brochures. A web site is dynamic and can be changed or updated in a very cost effective manner. Best of all, your clients can access this information from anywhere in the world, without the delay of snail-mail. A properly constructed web site can also reduce the time that you and your employees spend answering redundant customer questions.

Complement Your Existing Marketing Efforts
Most people think of a web site as advertising. Unfortunately, they would be wrong – A web site is a medium which complements and enhances your existing marketing efforts. Your potential customers or clients can easily gain access to information that isn’t suitable to include in other traditional advertising mediums. In less than a decade, a web site will be just as common as having a listing in the Yellow Pages. What would your potential customers or clients think of your business if you didn’t have a web site?

Customer Service
A web site allows potential customers or clients to get to know more about your company, increasing the personal side of doing business. Your business will be open 24hrs per day, 365 days per year, and if someone has a question concerning your product or service, an answer is only an e-mail away. Some people may feel uncomfortable on the phone or in your office / store, and, to these people, e-mail is their preferred method of communication.

Get a Jump on the Competition
A professionally designed web site will make your business appear larger than it actually is, and therefore challenge larger competitors. When it comes to getting listed in the search engines (Google, Yahoo, MSN, etc.), the longer your web site has been active, the higher ranking you will receive, and therefore more traffic will be directed to your web site. It is for this reason that you can’t afford delay this important decision any longer.

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2 Best Ways To Make Money Online

Writing a title about the best ways to do anything is dangerous because at times it won’t be taken seriously. I have spent a lot of my own time looking into the best ways to make money online myself and have come to the following conclusions.

The Internet is extremely competitive and everyone trying to be in but it offers numerous and a never-ending ways to make money online. One thing I have noticed however is that the people who make the most money on a consistent basis do one or more of the following ways to make money.

1. Email marketing to your own list of your own is a straong way to make money on the Internet today. It has been that way for over 10 years now, and I suspect it will be that way for many years to come.

Because most customers will not make a purchase the first time they land on your website being able to follow up with them in the future is important. Therefore the key to long term successful selling is capturing their name and email address for future follow-up.

Because you are building a list of your own you can access at any time this helps make email marketing so powerful. Plus having a list of subscribers gives you the opportunity to get to know people beyond just being another visitor to your website.

2. Combining niche marketing and affiliate marketing to target markets in a less competitive way. This makes sense because if you are just getting started some websites have a large advantage over you.

For example if you were to try to create a website in the niche of make money online you will find there are websites with literally thousands of backlinks already. However if you were to target a less competitive niche such as make money as a blog writer you would find it is less competitive.

The other thing is affiliate marketing is a way to make money selling other people’s products. You can find affiliate programs in the niche you choose to target which allows you to get started very quickly.

This makes niche marketing and affiliate marketing one of the best ways to make money on the Internet because it levels the playing field and allows you to make money faster.

As you have probably guessed you can also combine niche marketing, affiliate marketing, and email marketing. By building your email list on your niche website it allows you to sell your affiliate products to your subscribers which really makes it the best ways to make money online but the list doesn’t end here, always there is more ways to do but this 2 one of best ways you can lie on!

For useful information about work from home internet job – check out this webpage.

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Getting More Focused — It’s All About You

Jeanna Pool from Catalyst Creative writes a great ezine on marketing each month. In January she shared 5 Great Marketing Tips for 2006. Number 1 was “Stop Focusing on You”. She declares 2006 the year of the client and exhorts you to focus totally on your clients and their needs. I think she’s right on. And I think she’s completely wrong. Why right and wrong?

Because if you’ve been in business for awhile and have great products and great services and aren’t getting the results you want, you may be too focused on your clients and not focused enough on yourself. Last week, I encouraged your to revisit your vision of your business and ask yourself why you started your business in the first place. Now I want you to focus even more on what you want. What exactly do you want out of your business? Do you want more money? If so, how much? Write down a number. Do you want more flexible hours? If so, write out exactly the schedule you’d like. Do you want to change the world? If so, write out specifically how that would look.

Why all this focus on you? Because if you aren’t absolutely clear on what you want, how are you going to know if you are successful? How are you going help your clients if you aren’t taking care of yourself as well. Maybe you need to be making $150,000 a year to provide your family with the life that you wanted. You want to send your kids to college. You want to retire while you are still in active and in good health. Or maybe you want to just make an extra $20,000 a year working part-time while you take care of your children until they are in school. Or perhaps your goal is to make a million dollars a year and live a really incredible life. Defining this is very important. Why?

Because what you want will shape your business. It will determine who your customers are and how you will help them. If you want $5,000,000 in sales, your products and methods are going to be a whole lot different than if you want $50,000 in sales. If you want to work only afternoons, that is going to shape your business as well. If you want to sell your business and retire in five years, that’s going to affect your decisions as well. So right now, get out a paper and pen and get ready to write.

Did you get your pen and paper out? Answer the question, “What do I want out of my business?” Write in as much detail exactly what you want your business to give you. Be as specific as possible. Write as much as you can. Think income, lifestyle, schedule, partners, travel, location, employees. What exactly do you want? Throughout the week, add to this and revise it. Compare where you are right now to what you really want. How large is the gap? Next week, I’ll help you create a plan to narrow the gap with: Why Business Plans Don’t Work — How to Create an Effective Action Plan

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Much of business involves inducing people to do what we want them to do. Whether it is to sign a proposal, return a call, set up an appointment, provide information or pay a bill, we are constantly nudging.

In business, to exist you must persist. But what happens if your nudgee is flat-out unresponsive? Can you still advance your agenda?

In many cases you can. Execute a classical Poingo inversion, top it off with a half-gainer and a solid plant at the end, and you’ve got your deal.

In English that means to look for opportunities to invert the situation wherein the inaction, rather than the action of your nugdee prompts the furtherance of your cause.

Your answer may be a self-serving letter or email. Example:

Your customer ordered a load of snipe bracelets, but now that you have them and are ready to deliver, you can’t get a returned phone call. After a few attempts, move into self-serving mode.

Leave a phone message, followed by a letter and an email which essentially says this:

Self Serving Message (paraphrased)

“Hello my esteemed customer, bringer of light and feeder of my children. I have spent a few seconds of my unworthy life calling to bring you excellent news about the arrival of your magnificent snipe bracelets.”

“Alas, all which has occurred to date is that I have has the distinct pleasure of hearing the music of your voice on your voicemail machine.”

“But now I must plan on your behalf, to ensure that your valuable merchandise arrives in time for the upcoming “Accoutrement’ de Snipe” convention. I will take it upon myself to defend your interests, my friend, and deliver your valuables this Friday at 3PM.”

“If for any reason you need to modify this plan, please call me before end of day Thursday so I can best meet your expectations.”

Sucking Up
You may have noticed a certain Alladin-like obsequiousness to this message. Good catch! You are basically ramrodding your customer. At least be nice about it. Remember what Mary Poppins said about the spoonful of sugar helping the medicine go down. Frame your actions within a context of the customer’s best interest.

Multi Media Approach
Remember, I suggested a call, a letter and an email. Each additional medium of communication reduces the ability of your customer to ignore you. Where appropriate, you may also use smoke signals and carrier pidgeons. Tatoos on prominent body parts can also be effective.

Don’t Hurt Yourself
Use self-serving communications sparingly. Even more important, don’t overreach:

“Hello my most wonderful customer whose radiance shares the skies with the great deities while his feet bless the Earth with their touch. I surmise that in your greatness you may have overlooked signing the contract I have humbly offered”.(so far, so good)

“Knowing that you will soon be wanting the 7 shipping containers filled with the finest New Zealand Kiwi fruits we discussed, I am ordering their placement on the next barge coming your way. They will be nicely ripe when they arrive. I am confident that when you inhale the fragrance of these delicacies, you will immediately sign the contract and accept delivery.”

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