How They Created the List

WalletHub, a site that assesses financial offers and companies, compared 515 US cities of varying sizes using 10 key metrics, ranging from population growth to unemployment rate decrease. They then ranked those cities based on which were economically growing the most.

The Fastest Growing Cities

If you’re looking for a city that’s expanding at the speed of light, consider one of these. You’ll notice: all but one city on the fastest growing list is in Texas! Coincidence? I think not. (PS if you’re considering starting a business in Texas, be sure to download our free Texas small business guide)

1. Odessa, Texas
2. Frisco, Texas
3. Midland, Texas
4. Mission, Texas
5. College Station, Texas
6. Killeen, Texas
7. Kent, Washington
8. Bryan, Texas
9. Austin, Texas

You probably have an idea of the size city you’d like to launch your business in. Here were the best ranked cities of different sizes:

• Large city with most growth: Austin, Texas
• Midsize city with most growth: Odessa, Texas
• Small city with most growth: Mission, Texas

The Slowest Growing Cities

Even if you’re not looking to move to one of these cities with a fast growing economy to start your business, it can be helpful to know which ones on the list had the least growth in terms of economy. If one of these is on your list of possibilities, you might want to mark it off, since the potential for growth of your new business is limited, at least for now.

1. Parma, Ohio
2. Albany, Georgia
3. Skokie, Illinois
4. Deltona, Florida
5. Decatur, Illinois
6. Detroit, Michigan
7. Sunrise Manor, Nevada
8. Westland, Michigan
9. Yuma, Arizona
10. Carson, California

No matter where you want to start your business, do your due diligence before you plant your flag. It can be helpful to pay attention to economic conditions in a given area to understand whether people are spending money there or not, as that will greatly impact your ability to succeed.

Ready to start a business? Review this checklist of essentials from CorpNet first!

The post Where to Start Your Business? Look at the Fastest Growing Economies appeared first on CorpNet.

Each time I hear this, I start off asking two simple questions:

•  Is your business physically located in Nevada or Delaware? Well, no…
•  Are you planning on opening a bank account? Yes…

And more often than not, the direction of our conversation soon changes course.

But, let’s back up a bit. Nevada and Delaware are popular states for good reason. Many larger corporations choose Delaware because it offers some of the most developed, flexible, and pro-business statutes in the country. And Nevada is increasingly becoming a popular choice for businesses due to its low filing fees, as well as the lack of state corporate income, franchise, and personal income taxes.

However, most small businesses never see the benefits from incorporating in these states, and end up with a lot more headaches and costs than they ever anticipated. As a general rule of thumb, I like to say that if a small corporation or LLC has less than 5 shareholders or members, it is best to incorporate in the state where the business has a physical presence.

In other words, unless your business has a physical office in Delaware or Nevada, it’s going to be much easier and less expensive in the long run to incorporate or form an LLC in your home state.

Here’s one example (and it explains why I mentioned the bank account up front). The other day, a small business owner from Maryland called me wanting to incorporate in Delaware. I started off with my typical questions…do you have an office in Delaware? No. Okay, will you want to open a bank account in Maryland or Delaware? Well, Maryland. That’s where I live.

As it turns out, Maryland has strong rules pertaining to bank accounts. And as an out of state business, this caller would have needed to ask permission in order to open a bank account in Maryland. Naturally, her next line of thinking was, “Well, maybe I could open my bank account in Delaware then.” But this isn’t so easy either. Without any kind of physical address in the state, opening that account will be just as hard.

And that’s just one particular (albeit very common) logistical challenge. There are countless other potential hurdles, and added fees.

For example, when a business incorporates ‘Out of State’ (aka in Delaware or Nevada), they may be responsible for additional filings and fees in both the state of incorporation (i.e. Delaware) as well as the state where they live and run their business. These can include the following items.

For the state where a business incorporates: 

• Appointing a Registered Agent in THAT state
• Paying filing fees in THAT state
• Filing annual reports in THAT state

And then, for the state of residence (or where the business is physically located):

• Appointing a Registered Agent in THIS state
• Paying filing fees in THIS state
• Filing annual reports in THIS state
• Qualifying as a Foreign Corporation in THIS state
• Paying taxes in THIS state

That last point can’t be overstated, as it can be a common misconception for the small business owner. Let’s face it, when a small business is just starting out (or really, during any point in its life), the tax burden seems overwhelming. It’s only natural for small businesses to be concerned about taxes —and those state tax laws from Nevada are incredibly appealing.

However, just because you incorporate your business in Nevada does not mean those are the only tax laws that apply to your business. In other words, while Nevada may not charge state income taxes for your corporation, the state in which your business is physically located will come after you for those taxes sooner or later. And to add insult to injury, your tax liability may actually increase because you’re viewed as a foreign entity operating in the state.

Pretty soon, any benefits from incorporating in Delaware or Nevada are quickly washed away with the added fees and added paperwork of operating out of state. There’s certainly truth behind the hype of these business-friendly states. However, those benefits are really limited to larger businesses (remember the rule: over five shareholders).

As a small business owner, you’re going to have more than enough fun with paperwork and fees as it is; there’s no reason to add more to your workload by trying to operate out of state. And while it’s common for the small business person to worry that he or she isn’t taking full advantage of all potential tax breaks, in this case, the simplest route of incorporating in your own state turns out to be best.

The post Ready to Incorporate? Why Delaware or Nevada May Not be the Answer! appeared first on CorpNet.

Five signs that it’s time to take your hobby up a notch:

1. You’re Super Busy Filling Orders – You might have started out just making products for friends and family, but now you can’t keep up with demand. If your hobby is taking over your world, it might be time to consider doing it full-time.
2. You’re Making More with Your Hobby Than Your Job – This is a fantastic sign that you’re ready for business ownership! If the profits from your “little” hobby are more than what you’re bringing home in your paycheck, it might be time to put in your notice at your job and start focusing on developing your new business.
3. You’re Investing a Significant Amount on Your Hobby – If you’re spending a lot on materials and supplies for your hobby, those are expenses you could write off if you were set up as a business. Keep track of your expenses now, because you may still be able to write them off once you launch your business.
4. You’ve Got an Etsy Page – Don’t discount your hobby just because you sell on Etsy. There are hundreds of thousands of sellers operating full fledged businesses through Etsy. While their revenue varies from one seller to another, Etsy (as well as eBay and Amazon) is a great place to test the waters with your business.
5. You’ve Got the Right Mindset – You think like an entrepreneur. You’re constantly coming up with new product ideas. You’re ready to own your own business! There’s nothing stopping you but yourself.

Making the mental shift to turn your hobby into a business is the first step. Now you’ve got more work to do:

• First, search for your preferred business name to see if anyone’s using the name you want. If it’s available, file a DBA under that name.
• Next, choose your business structure. The S Corporation is popular for small business owners.
• Then, register for a Federal Tax ID number. It’s free!
• After that, open a business checking account. This will keep your finances separate.
• Next, apply for any business licenses you’ll need. Check with your city and state to find out what’s required.
• Then, create your business plan. Include how you’ll market your business and what you’ll spend to launch it.

Now you’re ready! You’ll find that running a business based on a hobby you love is satisfying!

The post 5 Signs That Your Hobby is Ready to Be a Business appeared first on CorpNet.

Thumbtack Journal recently released its 10 Best Cities for Millennial Entrepreneurs list, which ranks cities and states based on their friendliness to small businesses, as well as identifies the cities that are welcoming Millennial entrepreneurs with open arms.

Where to Start Your Next Business

If you’re a Millennial (born between 1980 and 1999), consider one of these cities when you launch your business.

1. Birmingham, Alabama
2. Boise, Ohio
3. Boulder, Colorado
4. Nashville, Tennessee
5. Manchester, New Hampshire
6. Charleston, South Carolina
7. Knoxville, Tennessee
8. Austin, Texas
9. Durham, North Carolina
10. Richmond, Virginia

What’s interesting is that these are all mid-sized cities. No metropolises for those Millennials. And I wonder what’s going on in Tennessee, with two cities on the list!

Prioritizing What You Look for in a City

No matter what generation you fit into, you want to find a city that is small business-friendly with a thriving economy. If you’re in the market for a new city for your business, assess what you want in a city and prioritize your list. If you plan to start a retail business, you might want a city that is walkable with “Main Street”-style shopping areas. If you plan to start a tech business, you might prefer to launch in a city that has a large tech community.

Once you’ve prioritized, do some research to find cities that fit the bill for your preferences. Then, visit your top choices to get a sense of what they’re like. Connect with local business owners in each city and ask them if they like running a business there.

It’s important that you feel like the city you select has plenty of growth opportunity. It helps if it’s an affordable place to live, and if you can get cheap labor as well!

Once you decide where you want to launch your business, let CorpNet help you with your business structure. Get a free business consultation to explore your options.

The post Where to Start a Business if You’re a Millennial appeared first on CorpNet.

What Exactly is a Nonprofit?

A nonprofit is created for charitable, educational, or other purposes – basically anything that doesn’t benefit the owners directly. The huge perk for nonprofits is that they are able to operate tax-free.

Nonprofit businesses can make profits (referred to as ‘surpluses’) but all money above operating costs must be used to further the goals of the nonprofit, like investing in equipment or resources to help it grow. Nonprofits can accept donations and grants.

Understanding the Nonprofit Business Structure

The most common nonprofit business type is the 501(c)3. Once a business is classified as a 501(c)3, it is eligible to become a nonprofit corporation. A nonprofit corporation has the same initial paperwork that a corporation has, with one difference. Nonprofits have a mission statement that clearly defines the organization. The purpose of the nonprofit must be laid out clearly in this mission statement.

Legal Protection for the Nonprofit Corporation

Just like with a corporation or LLC, nonprofit corporations have a corporate shield. If your nonprofit is ever sued, as long as your legal structure is compliant with state and federal requirements, you and other stakeholders will be immune from individual liability, and your assets can’t be touched.

The biggest legal issues for nonprofits involve losing that tax-exempt status due to misuse of the nonprofit, either through inappropriate gain or improper distribution of surpluses. Should you be found guilty of either of these violations, your nonprofit will lose its 501(c)3 status, and you will be treated as a for-profit business.

How to Start a Nonprofit

Starting a nonprofit is similar to starting any kind of business in some ways. You should conduct a name search and register the nonprofit paperwork with your Secretary of State and the IRS.

Once those tasks are complete, you’ll need to decide where to incorporate as a nonprofit, choose your directors, and create articles of incorporation. You will also need to secure any nonprofit business license required by your city, county, or state.

What You Need to Know About Nonprofit Taxes

Even though a nonprofit corporation doesn’t have to pay taxes, you still have to file your taxes annually with the IRS. Because losing your nonprofit status has so many tax consequences, it’s important to keep financial records current and accurate.

Tax-exempt status is not automatic and can be denied. Application for tax-exempt status has to be made with both Federal and State authorities.

For your annual taxes, you will need to file Form 990.

Need to establish a nonprofit for a charitable, educational, religious, or public purpose? Let CorpNet take care of establishing your non-profit for you in any state so you can get back to serving your cause. Simply visit us online or call us toll-free at 1-888-449-2638!

The post Nonprofits: Making Your Mission Into Your Job appeared first on CorpNet.

Both have their advantages and challenges, so how do you choose? I wish there were an easy answer, but I’m afraid you’ll need to do some research and put some serious thought into your decision. As you explore your options, consider the following pros and cons of starting a business from scratch and buying an established one.

Pros Of Starting From Scratch

• You begin with a squeaky clean slate, establishing and building your brand reputation from Day 1.
• You build your team fresh and new, selecting the right people for the right positions.
• You create your workflows to maximize productivity, without having any inefficient past processes to “fix.”
• You choose and develop the products, services, and packages you’ll offer to your customers.
• You establish your pricing to ensure profitability from the start.
• You choose your business’s legal structure to ensure the degree of liability protection you need and the most favorable tax situation.

Pros Of Buying A Business

• You have customers and incoming revenue immediately.
• You have employees who already know how to do their jobs and don’t need training.
• You have built-in processes and systems to operate your business efficiently.
• Your services and products are already to market, and you have established sales channels to get them into customers’ hands.
• Your business is already registered and has the necessary permits and licenses to operate legally in your state.

Cons Of Starting From Scratch

• You do all the legwork, including researching the registration requirements to form an LLC or incorporate your business and filing your state, federal, and local paperwork to operate legally.
• You don’t know for certain that your business idea will be viable and sustainable.
• You have to develop and put into place all the internal systems and processes needed to operate your business.

Cons Of Buying A Business

• Existing employees may be resistant to accept your leadership.
• If you find processes aren’t working efficiently, it may be difficult to initiate change because everyone is used to doing things a certain way.
• You may discover the legal business structure the former owners selected isn’t ideal.
• You may find your brand’s reputation isn’t as positive as you’d like it to be—that might be difficult to turn around.

As you can see, there’s a lot to think about as you weigh the options of starting your own business or purchasing one that is already up and running. I advise you to do your homework before deciding which route to travel. And consider seeking the guidance of respected and reputable professionals (attorneys, accountants, business consultants, etc.) who can help you understand the financial and legal aspects of what’s involved.

The post Should You Buy A Business Or Start One From Scratch? appeared first on CorpNet.

And every day, I see Phil—my husband and co-founder of CorpNet—encourage self-assurance within our four children, laying the foundation for their future successes.

I imagine many of you have had similar life experiences.

Fathers, regardless of whether or not they’re entrepreneurs themselves, influence and shape who we are as business owners.

Their values, fearlessness, empathy, and other qualities have taught us valuable lessons that we’ve used in starting a businesses and running a businesses each and every day.

Dads teach us that…

1. There’s no substitute for hard work.
2. It’s possible to be both strong and sensitive.
3. The only way to fix mistakes is to first own up to them.
4. A little healthy competition strengthens your character and skills.
5. Forgiveness frees you to move forward.
6. Laughter can heal.
7. Patience pays off.
8. It’s important to think before you speak.
9. Earning something is always more gratifying than having it handed to you.
10. Picking your battles saves your energy for what’s really worth fighting for.
11. You can’t please everyone all the time.
12. Leading by example is the key to earning respect.
13. Long-term goals cannot be accomplished without action in the short term.
14. Saying “no” isn’t easy, but sometimes it’s the best answer.
15. Taking yourself too seriously will weigh you down.
16. A positive outlook will make any task less difficult.
17. It’s OK to take a break now and then.
18. Showing appreciation of those around you strengthens relationships.
19. Fear of the unknown is normal—and it can be overcome with determination to achieve a goal worth pursuing.
20. Motivation needs to come from within.
21. Going beyond your comfort zone is the best way to test your limits and discover what you’re capable of.

Of course, everyone’s experience with his or her own father is unique, so what you’ve learned and have taken with you into entrepreneurship may be a bit different. But I think it’s accurate to say that we’ve all learned something from our dads that has helped us in launching and managing our businesses. We’ve all taken away advice and insight that has made us the strong, resilient, and determined professionals we are today.

The post 21 Things Our Dads Teach Us That Make Us Better Entrepreneurs appeared first on CorpNet.

Let’s take a look at the available types of small business funding, and for which entities they are most appropriate.

SBA Loans, Microloans, Grants

The U.S. Small Business Administration provides a variety of loans to businesses that fit the government’s definition of “small.” The most common loan program, the 7(a) loan program, stipulates certain other criteria: the business must also be for-profit, operate in the United States, and have reasonable invested equity; in addition, the proprietor must have already used personal financial resources before seeking SBA assistance.

The SBA’s microloan program is another option for qualified borrowers. Microloans, which must be administered through intermediary lenders, provide loans up to $50,000, although the average microloan is closer to $13,000.

While the Small Business Administration does not provide grants, some state and local programs, as well as non-profit organizations, do offer grants to small business owners. Usually, these grants require either a matching contribution or a concurrent loan; they are not necessarily “free money.”

These financing options are appropriate for all types of business structures. It doesn’t matter whether your company will be a sole proprietorship, a PLLC or LLC, or a corporation.

Crowdsourcing and Kabbage

The rise of online funding opportunities, like Kabbage, OnDeck, or crowdfunding sites, means that entrepreneurs have more options for funding than ever before. These may be good choices for sole proprietorships DBA (doing business as), since they represent a path to funding that doesn’t involve one’s personal savings.

Kabbage and OnDeck are both considered short-term business lenders — the terms range from one to 12 months for Kabbage and three to 36 months for OnDeck — but can be easier to secure than a bank loan. If you are starting a business that simply needs a quick infusion of capital, an online lender can be a good choice, but make sure you read up on the conditions. Kabbage, in particular, comes with a fairly high-interest rate.

Crowdfunding is another way to go. Sites like Indiegogo, RocketHub, peerbacker, and a whole host of other, niche-focused crowdfunding platforms make it easy to get the word out about your business as you raise capital. Of course, hitting up friends and family members to help get your venture off the ground is nothing new — but the proliferation of social networks (and the sharing they make possible) helps entrepreneurs cast an even wider net.

As with SBA loans, crowdfunding and online lending can be viable options for all business structures. They are also particularly useful ways to drum up some cash for a business that is already established, but that has faced financial hardship (such as a storefront fire, a theft, or another unexpected occurrence). Without the money, the business might not be able to keep running, but once it gets back on its feet, it will be able to funnel profits into paying off the short-term debt.

Equity Financing

This type of small business funding, which entails selling shares of the business to raise capital, comes with distinct advantages and disadvantages.

With equity funding, there’s no worry about personal credit issues, and no debt to repay. Furthermore, by establishing a partnership (either limited or general) — for which equity funding is the most common and popular type of financing, you will reap intangible rewards, too. Partners who are experts in your industry, or more experienced as business people, can serve as mentors and advisors, even if they are technically considered limited or silent partners (meaning that they bear no liability).

Some entrepreneurs may have to think long and hard before diving into a partnership – particularly a general partnership, in which they will share responsibilities and decision-making. Giving up full control over one’s business can be a difficult pill to swallow, and tensions can arise if the partners differ too widely in their management style or vision for the company.

Additionally, an equity funding or partnership arrangement means that when the profits start to roll in, you’ll be sharing the rewards as well as the responsibilities. Most small business owners are comfortable with the profit-sharing aspect of equity financing. They realize that without the initial investment and business acumen provided by the partners, they might not have made a profit — or as much of one — at all.

For obvious reasons, your company can’t be a sole proprietorship and a partnership. As a corporation, however, it is certainly feasible, not to mention desirable, to attract investors.

Angel Investors & Venture Capital

Some types of funding require that your company be incorporated, as either an S or a C corp. These are angel investors and venture capital investors.

Venture capital (VC) and angel investor financing options are usually only available to corporations. These savvy investors invest in your business in exchange for stocks in the firm. As with equity funding, one advantage of both angel financing and VC is that you won’t be expected to pay any money back, as you would with a loan. Instead, you are “paying back” the investors with shares.

It can be difficult to secure this kind of funding, however. Shows like Shark Tank may be giving would-be entrepreneurs the false notion that you can easily catch the eye of an angel investor or VC firm. While angel investors offer their contributions at the seed stage, they don’t tend to do so until the business owner herself has already pitched in her own capital. At that point, the investor may feel the risk is worth taking.

Venture capital firms tend to step in later, once seed funding has been established; they don’t tend to invest in startups, either, but rather in businesses that, while still too small to raise capital in public markets, are nevertheless poised to disrupt their industry and offer profitable payouts.

Choosing your legal business structure and getting business financing are two large aspects of starting a business. When you get these ducks in a row you will be well on your way to a successful new venture!

The post How to Legally Structure Your Business To Secure Financing appeared first on CorpNet.

​CorpNet Can Help You Create Your New LLC

If you’ve determined forming an LLC is right for your real estate business, we can help! From serving as your registered agent to filing your Articles of Organization to obtaining your EIN, and keeping you in compliance, we make the process simple and ensure your paperwork is completed accurately and promptly.

Get Started

The post Does a Real Estate Agent Need an LLC? appeared first on CorpNet.

And while you can’t completely get rid of that risk, there are at least a few measures you can take to lower it.

Trademark a Business Name

You want your business to be the only one with its name. But without the proper precautions, it’s simply vulnerable. That’s why it’s a good idea to trademark a business name to legally protect it from being used by anyone else.

Keep Money in Reserve

Don’t wait until you have a cash crunch to make a plan on how to keep cash flowing. Sometimes clients don’t pay you on time, and you don’t want that to disrupt your ability to pay your own bills. Set aside a portion of every payment you receive in a savings account that will be available should you have a costly emergency and need to access funds quickly.

Protect Your Personal Assets

There’s no bigger risk in running a small business than putting your personal assets on the line, but that’s exactly what happens when you operate as a sole proprietor. Instead, become an LLC or corporation so that your personal assets are completely separate from that of your business. Then, should you ever be sued, the court can’t come after your home, car, boat or anything else to cover your business debts.

Appoint a Mini-Me

What happens if you get sick for weeks or even months? How will your business run without you? You need to appoint a co-captain to take over the helm in case of emergency. This should be a member of your team that you trust implicitly to act on your behalf. Train her in everything she would be responsible for in your absence. And hey, this comes in handy if you want to take a vacation too!

Market When Business is Booming

Don’t wait until you’ve lost clients and are scrambling to find where your next business is coming from to market your brand. Marketing is essential all the time, in times of feast and famine. Slacking off can cost you down the road.

Corpnet can help you minimize your business risk. Let us help you incorporate online to instantly protect your personal assets!

The post 5 Ways to Lower Your Risk When Starting a Business appeared first on CorpNet.