5 Things You Need to Do to Make Your Business Really Take Off
You quit your day job, and you’re now focusing full time on your business… congrats. That’s a huge deal. If you’ve already followed our tips on how to Quit Your Day Job and how to Launch Your Business, and you’re ready to move forward, but aren’t sure what strategies to embrace to make your business really take off, well, you’re in luck. We’re back with more tips on how to take your newly or not-so-newly launched business and steer it in the direction of greatness, thanks to advice presented by the entrepreneurial hustlers at HustleCon 2015.
Learn the Rules of Systems. Then Break Those Rules.
You’ve started your business. Things are going along swimmingly, but at some point, you’re going to hit a roadblock. How you deal with that roadblock can be the difference between blasting off as a business or folding and going back to work for someone else. When it comes to figuring out how to tackle a problem, we picked up some tips from a few of the speakers at HustleCon. Firstly, Jack Smith from Vungle got his first $2 million in funding by learning the “rules” of LinkedIn ads and then figuring out how to manipulate the system to get his messages right in front of the person he was seeking funding from. You can read exactly how he did it here. No matter if your goal is to get a job, score a client or reach out to an investor, you need to figure out how not to be one of the hundreds of emails they receive on a weekly basis. You can stand out, but only if you’re willing to break the rules. Smith made it very clear, though, that when you break rules, there are risks involved. You might piss someone off, but that risk might be worth it if the end result is scoring that dream client or partnering with that business that is going to launch you toward success.
On the other hand, sometimes you need to change the rules all together. Jessica Scorpio, the founder of car-share company Getaround, knows exactly how to do this. Her company almost didn’t take off due to laws dealing with insurance coverage around owners of the cars and drivers of the cars and holders of the insurance. Rather than throwing up her hands and quitting, she actually had the laws changed. That’s the type of determination, tenacity and evolutionary mindset you’re going to need to constantly have to make your idea work.
Give Real Founder Equity
This idea that you have is your baby, and you would do anything for it. But since you can’t do everything yourself, you need more hands and more minds that can balance out your skill set — whether that’s a COO, CTO or some other C-level partner. Besides finding that person (or those people) who are going to balance out your skill set, you want them to feel so much passion and feel so invested in the idea that the survival of the business is what keeps them up at night. Likely, they aren’t going to do this for nothing… even if they initially say they will.
Arum Kang, the founder of the dating website Coffee Meets Bagel, is adamant that if you want someone to give it their all, you need to give them real founder equity. She said she sees a lot of CTOs, a few years in, feeling bitter that their cut isn’t quite fair for the amount of work they put in. And while most founders are giving 5% to the C-level execs, Kang challenges that 10% is the more realistic number.
True or false: The product or service that you’re providing is the most important part of your business. True, true and even more absolutely true. If you don’t have a product that works and fulfills the need of someone out there, your popularity and your community of loyal follows won’t really matter (or will drop off once they realize what’s going on). But once you have that product that works, you need to focus on getting it out there. And one way to do that is by building content and focusing on SEO. Tim Chen, founder of NerdWallet, knows this best.
He hacked together his website by copying and pasting code from around the web to do what he needed it to do. Was it perfect? Far from it. But did it work? It did! Does it matter if it works if you don’t have users? Turns out, it doesn’t. To get his name out there, Chen started a pretty serious blog about money matters and really focused on SEO, adding in the right links to posts and generating content that would help people stumble upon his site. The hardest part about this is going to be that you will see that things are broken and need fixing, but if your current goal is to get users, then you need to ignore the fires burning around you and write some content! Around the web, you can find Tim Chen writing not only for NerdWallet’s blog, but for the likes of the Huffington Post, like NBD.
While it’s tempting to constantly be answering emails or starting one thing and then moving to the next willy nilly, if you do that, you’re never going to accomplish anything. Instead, focus on one task in your day and try to accomplish that and then move on to the next. Andrew Warner, the founder of Mixergy, an interview site for entrepreurs, believes in simple mantras and mala beads. He wears them on a daily basis, and while he’s walking to work or riding the bus, he goes over each bead and states his goal for the day. Whatever it is that helps you focus, make it part of your daily routine and work toward your one goal for the day.
Find the Right PR Firm
If you think online dating is hard, hold on tight. Because finding the right PR agency makes dating look like a walk in the park. You’re going to need someone to help you get the word out. And how you can do that is with a PR firm. Heidi Zak, founder of bra company ThirdLove, gave us a crash course on how to find “the one.”
Firstly, know that even though PR companies say they can cover multiple industries, they truly are only experts in one area. You can’t have that fashion-tech-retail trifecta in one PR company. So what you need to do is figure out which market you really want to make movement in and focus on finding a PR company that specializes in that area.
Secondly, know that most people are not happy with their PR firm. Rather than wasting your time approaching firms, just start asking other entrepreneurs who they use and if they are happy with them. You’ll quickly find that 90% of the people are not happy. If you get a “they’re okay,” that is a green light to reach out and see how you could potentially work with the “okay” firm. The process isn’t going to be fast or easy, but once you find the right one, you can start getting placed in the likes of Fast Company, Forbes, InStyle and The Cut.
Have any other tactics for making your business take off? Give us your tips in the comments below!
Welcome to Selfmade Finance School, our new money series with Block Advisors to help small business owners with their tax, bookkeeping, and payroll needs year-round. This week, we explore the tax implications of bringing family members into your business.
The question for today is this: Does hiring your family members make sense for your business? Let me be clear. This is not a piece about whether hiring your family members makes sense for your relationships with those family members. As someone who is part of a family business, I could fill up a lot more than 600 words on my opinions about that. For today's purposes, we focus on whether it makes sense from an overall "good business and tax implication" perspective. As it turns out, there is a decent amount of tax nuance when it comes to employing your family. Let's break it down based on relationship to the employee:
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Spouses Who Are In Business Together
Personally, if I had to be in business with my husband, it would not go well. However, many couples build viable, strong businesses together and I say, good for them! Depending on how you have your business entity structured, it will make a big difference on the tax treatment of you and your spouse working as partners. Because a business jointly owned and operated by a married couple is generally treated as a partnership for Federal tax purposes, the spouses must comply with filing and record keeping requirements imposed on partnerships and their partners. The election to file two Schedule C (Form 1040) forms, (one for each spouse) permits certain married co-owners to avoid filing partnership returns, provided that each spouse separately reports a share of all the businesses' items of income, gain, loss, deduction, and credit. Under the election, both spouses will be subject to self-employment tax and on net earnings from self-employment and receive credit for Social Security earnings.
One Spouse Employs Another
If you have a dynamic where your spouse is an employee of your business, then your spouse's wages are subject to income tax withholding, Social Security and Medicare taxes. If you are self-employed (not a corporation or a partnership), your spouse's pay does not have to be included in your federal unemployment tax account (FUTA) contributions and payments. However, if your business is a corporation or a partnership you must include that spouse's pay in your unemployment tax contribution calculation.
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You Employ Your Child
First, let's be clear. I work in my family business, but I am an adult, so I am treated just like a normal employee. However, if you, for example, run a family restaurant and want to hire your children under 18 to work for you, there are some tax benefits. But first, you should check with your state for rules on how many hours minors can work (in non-agricultural jobs) and reference the Fair Labor Standards Act for information on limitations on the kinds of work children can perform.
"This is an often overlooked or under-utilized strategy. Paying your children for true services they provide in your business can be a powerful tax-saving tool," says Cathi Reed, Block Advisors Regional Director. "If you are a sole-proprietorship or single member LLC, and the child is less than 18 years of age, the business is not required to withhold FICA or payroll taxes. The child can use his or her standard deduction against income you pay."
You Hire Your Parent
Oh dear. If you are brave enough to do this, know that you will need to pay Social Security and Medicare taxes on your parent's wages and make the appropriate withholdings, but you don't have to pay unemployment taxes. Now all you have to do is convince your parent that you are the boss. Have fun with that!
Is Hiring Family Members Worth It For The Tax Benefits?
"There are some positive tax advantages to hiring family members. It's important to treat a family member like any other employee. Hiring your children can result in substantial savings for businesses. Make sure your child has real, age-appropriate work to do and a reasonable pay rate, comparable to other employees. Consult with a Block Advisors small business certified tax pro to ensure that you are complying with all requirements," advises Reed. "Block Advisors, a team within H&R Block, is dedicated to meeting the tax, bookkeeping and payroll needs of small business owners year-round. To start working with the tax experts at Block Advisors, visit blockadvisors.com."
In my opinion, you should not hire a family member solely because of the tax benefits. You should always hire based on whether that person is right for the job and keep in mind how this hire could materially impact your relationship with that person and others in your family. Finally, as I mentioned, make sure you have a tax professional on your team when making these determinations. As you can see, things can get a little tricky!
*All details were sourced from IRS.gov and blockadvisors.com