How To Pick a Business Structure

It seems you are moving along at a decent pace as you get your home business off the ground. You’ve created a business plan, figured out the perfect business name, and even jumped the gun to print 100 t-shirts with your new business logo. But now you realize you have avoided the official stuff for too long and need to decide what your business will be in the eyes of Uncle Sam. It’s time to decide on an official business structure!

Don’t freak out! Grab a Kleenex and wipe the perspiration beading up on your forehead. Selecting the right business identity is important and has tax and other ramifications, but reviewing your business objectives, researching your options and consulting a tax expert will make it easy to select the right business structure for your home business.

Here are some basics to think about:
How risky is your business?

How much risk am I taking with this business? That is the first and most important question you want to ask yourself. If your business is going to be involved in scooping up real estate property or buying a bunch of expensive equipment or inventory, that could hold a lot of personal liability for you. Another risky situation could be if you were planning to share ownership with different individuals and each of you contributed different amounts of investment capital or time involvement. Where relevant, you’ll want to create a structure that limits your personal liability. Only a corporation or a limited liability company (LLC) will offer you this protection.

On the other hand, a sole proprietorship or partnership is designed specifically as the name implies -- for a single individual or pair of two to do business. All the profits and losses of the business rest solely on the owner(s). These are the least formal and complicated of the business structures. If you are leaning this direction, but worry that you need the protection of a corporation or an LLC to avoid the minuscule likelihood of getting sued, consider your business. For instance, if you are selling products out of your home or offering some type of consulting service, it is rare that you would screw-up badly enough to get your pants sued off. This is why approximately 80% of home-based businesses are set-up as sole proprietors.
Tax Ramifications

If you are looking for the least amount of tax filing complications, sole proprietorships, partnerships or LLCs fall under this category. Each of these structures are set up so that the profits and losses pass through the business to the owner(s), who then report their share of the profits or losses on their personal income tax returns using a Schedule C.

A corporation is considered a distinctly separate entity and requires a separate tax return from that of its owners. Taxation of a corporation is more complicated, but corporations are often taxed at a lower rate and could result in savings based off its unique situation. Again, this is a good place to consult a tax accountant if you are interested in learning how a corporation would affect your business and personal taxes.
Read more

Today's Tip A Digital Marketing To-Do List

As consumers continue to increase the time they spend online across a proliferation of digital devices, businesses of all sizes are taking a hard look at the best ways to communicate and interact with them. Here are tips to consider in 2011:

1. Invest in digital marketing. Today’s consumers spend approximately twice as much time engaged in digital channels as businesses spend—in time, effort and money—to reach them there. A huge gap exists between this shift in consumer behavior and businesses’ investment to keep pace. However, organizations are increasingly realizing the importance of digital marketing investments. In fact, digital paid-media spending is expected to grow 14 percent to $51.9 billion in 2011, making it the biggest year yet for digital marketing. This is the year to consider how digital marketing could help your company create new dialogues and interactions with customers and prospects.

2. Move your marketing message from intrusion to service. For far too long, marketing and advertising have been viewed as intrusions in the channels consumers engage in, such as TV, print, and radio. However, as media consumption shifts to a growing number of digital platforms and devices, consumers are able to avoid many of these unwanted intrusions. This year, strive to provide tailored, relevant content that your customers will welcome as a service, rather than view as an annoyance.

3. Increase creative versions for greater impact. Although advancements in search-marketing algorithms are making search results eerily accurate, consumers are increasingly frustrated by clicking through these highly-targeted results, only to land in generic sites that don’t provide relevant content. If your business chooses to deploy search-marketing tactics this year, focus on what happens after the click by developing multiple versions of location-based, contextual, and even personally relevant creative content for the greatest impact.
For more