The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
When you’re developing a new business or growing an existing one, it can be beneficial to gain access to as much data as possible relating to your business strategy, whether you’re looking at factors such as average product or service pricing, average salaries for a region or the most lucrative prospects to approach as investors, to name a few. While there are many premium services that can provide you with this information for a fee, there are ways you can find this information free of charge. Here are some free sources of data that can help your business:
Bureau of Labor Statistics wage data – The Bureau of Labor Statistics (BLS) is a useful resource for helping you set fair, competitive wages in your market. You can view wage data according to industry or occupation, and group the data by region, state, or metropolitan area. There may be a large difference in average salary for a computer programmer in Maine and one in California, for instance. Researching the BLS data can help you set a fair price for your given area to help you set an appropriate budget for your staffing needs.
State and County Quickfacts – This free resource available from the United States Census can provide you with a detailed overview of the demographics of a particular state, county, city, or town. This information can be especially useful if you are considering opening a store in a particular city, or marketing heavily to consumers in a particular region. By getting a town-by-town overview of the most common age ranges and household make-ups, for instance, you’ll be able to get a better sense of whether a product or shop that appeals to families with young children is likely to find a suitable audience in a given area.
Monthly and Annual Retail Trade – The retail trade chart is updated monthly with the latest available data on sales of all types of retail products and goods, broken down into categories including food service, furniture and home furnishings, automotive purchases, clothing stores, and a number of other verticals. If you are opening a retail or e-commerce store or a restaurant, these charts can help you get a good sense of current sales trends for particular categories, and help you estimate seasonal fluctuation in item sales. Annual and quarterly reports are also available, providing a deeper dive into each industry’s annual sales, inventory, operating expenses, and other factors. The annual report is only available up until 2011, so for a more current look at the retail climate, the monthly and quarterly reports will likely prove more helpful.
Many more free sources of government data are available to help you with your business. In order to find the sources that are most relevant to you, visit the USA’s business page here: www.usa.gov/business/business-data, which offers links to dozens of additional business data resources.
One of the most important first steps you can take for your new business is establishing a good line of business credit. This is vital in the early stages but continue to be important throughout the life of your company. Here are a few helpful tips for establishing and maintaining good business credit.
Forming a corporation or LLC will be the cornerstone of establishing your company's solid credit. It has become extremely difficult for sole proprietors to establish business credit separate from their personal credit. By simply creating this separate legal entity, you will lay the groundwork for building your business credit.
In most cases, the next step is obtaining a Federal Employer Identification Number or Tax ID Number (or EIN) for your newly-formed corporation or LLC. The Tax ID number is essentially the business world's equivalent of an individual’s Social Security Number. Tax ID Numbers are most often used for banking, hiring employees and paying taxes. When you obtaining an EIN, you help separate your personal credit history from your business credit history.
Another key element as a business credit builder is acquiring one or more credit cards for the business. Utililizing business credit cards is a necessity for obvious reasons, and most major credit cards report to all three credit bureaus, TransUnion, Experian and Equifax. This reporting is essential in order to strengthen your company's credit history. Of course, you should pay your bills on time, since not only good payment history but also bad payment history is reported to the credit bureaus. The better your payment history, the better your overall business credit becomes.
It may take some time to establish your business credit, but you will see a significant difference in the long run. Try some of these business credit builders; establishing good credit will open doors and opportunities for your business.
After you have formed a Delaware entity, there are numerous in-house tasks to tackle. Establishing a budget and determining the annual expenses for the entity could be at the top of your To Do list. By determining the yearly costs associated with the business early on, you can avoid the surprise of discovering unknown fees later.
It is pretty simple for entities formed in the state of Delaware, because there are only two fees that are required to be paid each year.
The first fee is the annual Franchise Tax, which is imposed upon every Delaware company by the state of Delaware. The amount that is due and when it is due is dependent on the type of entity you have formed.
The second fee is the annual Registered Agent Fee, which is our fee for acting as the Registered Agent for your entity in the state of Delaware. We are the lowest priced Registered Agent in the state, and only charge $50 per year for this service. We also give you a full year of Registered Agent service, and invoice on the 28th day of the anniversary month of the entity. For example, if the entity is formed on April 1, then the $50 fee is due by April 28 every year. Once you have made the payment, the fee will not be due again until April 28 of the following year. Some agents only extend the service through December and then bill you a second time. Again, we will provide you with notification a couple of months prior to the due date via regular mail and email regarding this annual fee.
When the time comes, both of these annual fees can be paid via our Client Center.
Now you know what annual expenses will be payable in Delaware for your entity. Best of luck!
CNBC recently released "America’s Top States for Business 2013”. Delaware Governor Jack Markell wrote a column as a guest contributor for the news piece. In his post, “The First State Aims to be First in Business,” he explains numerous steps that have been taken to make Delaware a busines-friendly state. Some of the details include over 100 state regulations that were amended or removed to make it easier to conduct business in the state of Delaware. In addition, a new program comprised of several different communities was created to help entrepreneurs get their businesses up and running effectively. Markell also says that the small community of leaders that represents Delaware gives the state an advantage of establishing and setting legal precedent.
Governor Markell further explains how he strives to keep Delaware ahead of other states in the competitive business market. Delaware has been at the top of the business ladder when it comes to entity formations, with more than 64% of all Fortune 500 companies formed in this state. This success is due, in part, to the corporate-friendly legal system, the well-respected Court of Chancery and an efficiently-administered Division of Corporations office.
To learn more about incorporating in Delaware, visit our website at www.delawareinc.com.
Here's a sneak peek at our ad in the 2014 Farmers' Almanac featuring Rick Bell's grandson!
On sale August 27, 2013.