The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
If you are already a successful entrepreneur, you’re a planner. So you’ve already done a lot of thinking about surviving and succeeding in 2012. How do you plan for your business to survive and succeed in 2012?
At this time last year I told the whole team here at HBS, that I could not argue with the economic facts that point to a massive global economic train-wreck in our future, but I was not convinced that it will happen in 2011, and would not, therefore, use the doom-and-gloom scenario as an excuse to freeze salaries or benefits, as we were forced to do in 2009 when sales fell 25% when the economy “contracted.”
In fact, we had had a good year in 2010 and I wanted to reward each of them, whom I consider my best friends, for their performance, expertise, dedication and customer friendliness, which largely accounted for our success.
So I gave everybody a raise, and told them, if times get tough, we will all be on the same train and we will all ride it uphill and downhill together. And that’s the way it will be.
That’s how I planned to be successful in 2011. It worked. That set the tone for 2011. Instead of concentrating on the negative, like the news did, we all pitched in to make the company and our service more perfect, so we could better serve our current clients and win a greater share of the potential customers out there. We also concentrated on outperforming our competitors in terms of the client experience by improving on hundreds of details on all levels of the business. We weren’t trying to re-invent ourselves, just improve upon what we already do well, to set the bar higher for excellence in our tiny industry of Company Formation Services.
Every year, for 30 years, I’ve done this. I plan for greater success every year by consistently improving every aspect of the company, and getting everyone involved in the details.
We invested in making our information and services available across the whole spectrum of the web including social media, mobile devices and notebooks. We set up an active Facebook page, and a Twitter account, and produced 13 videos to walk clients through every question and quandary when it comes to forming a Delaware LLC or Corporation. We will soon be QR coding your invoices so you can access your account, and pay your Franchise Tax and Registered Agent fee in less than a minute! Poof! If compliance can be made simple, we will make it so simple for you.
If you have a smart phone, try our mobile site. Just go to the same url, www.delawareinc.com, and it will recognize your phone and give you the “Wham Bam Thank You Mama” version of our info.
But I have to admit, in 2011, we were very lucky. Despite the economic reality we all faced, more people wanted to form new companies and when we asked them why they wanted to start fresh at a time like this, many of them totally dismissed the notion that times are tough and said, ”because this is the time.” And they are right.
I started Harvard Business Services, Inc. in 1981 when the economy was equally depressed. But the U.S.A is not a depressed nation and we always prevail over economic challenges. Americans love a challenge. Americans love to work and to be the best at what they do. Americans are also innovative, and free to innovate, which is our big advantage.
2012 is an election year. What policies will govern the country in 2013 and beyond? The voters will decide that. This year, it is more important than ever, that you vote. In the U.S.A, voters determine the future, not the politicians.
What Our Clients Want: When I talk to our clients, nobody cares what the dollar will be worth, or what gold will be worth or what the interest rate will be on treasury bills. Really, they don’t care. Do you?
What people we talk to care about is activity in the marketplace. When are the buyers going to make a comeback and start calling again? Let’s get the phones ringing, let’s get the sales folks showing people properties, let’s get the customers making offers, and deals, and buying things. Let’s get the banks making swift and easy loans again. Let’s get this economy rockin’! That’s what we’re they’re saying.
So, my advice for 2012, which is free advice and worth every penny of what you pay for it, but no more, is to invest in yourself. Invest in your company no matter how small or how large it is. Pour your money back into your own company’s infrastructure and environment and security. Invest in your people. Raise their level of education and their standard of living and challenge them to do more. And they will. Build an emergency operation center to avoid shutting down if one strikes. Plan for the train wreck, even if it doesn’t happen.
Plan ahead and Go Ahead: By all means, if you’re just starting out, you should know that you’ve picked the very best time in recent history, in my opinion, to start your own company. Survival will determine the fittest but in these uncertain times, start-up companies with dedicated sensible owners often have the advantage over established companies with good balance sheets.
Opportunity is alive and well here in America. Go for it! Make 2012 your year to form a company.
Recently, little black and white squares have been popping up everywhere! These tiny blocks are called QR (quick reference) codes, which can imbed a great deal of information.
QR codes have thousands of uses, and creative business owners are coming up with new ways to use them in marketing their businesses.
QR codes engage customers! Using a smart phone and a free QR Reader app, your customers simply scan the QR code into their phone and it takes you right to the web page you specify. This turns a once-boring print ad into an interactive experience, because the computer-generated codes contain all kinds of information that you specify, including print, pictures, web links, email addresses, Facebook links, coupons, and other promotions.
Many businesses are finding that QR codes offer an effective way of bridging the gap between print and online. For example, while tried and true business cards still work in paper format, including a QR code on them will provide a quick link to your company’s web site. Including your company’s QR code in newspaper and magazine ads will expand marketing potential. QR codes combine offline information to online content, thus linking a multimedia experience to print advertisements.
QR codes are easily scanned by any modern mobile phone. As smart phones become increasingly more popular, people want faster and more direct lines of communication between products and services they use. Customers using QR codes don’t have to type or remember anything. At this rate, it won’t be long before most people will recognize and use QR codes, so small businesses should consider being ready to take advantage of this emerging and very low cost technology.
We are only scratching the surface of how they can be used, but here are a few ideas to put QR codes to work for your business:
· Link to social media tools such as Facebook and Twitter, turning foot traffic into web traffic.
· Use QR codes on receipts to send customers to a testimonial page for your business.
· In storefront windows – when your business can’t be open 24/7, customers can still access your information and even shop online.
· On business cards – help new contacts find your business faster.
· Include on product tags and customer feedback forms.
· Alternate special offers by linking your QR codes to new or updated landing pages.
· Create unique QR codes to include on invoices that take clients to a specific payment page
There are a number of sites for generating QR codes, and they are free. An internet search for “QR code generator” will offer many choices. There can be a certain amount of fun and surprise with QR codes and with creativity your business may find them a valuable marketing tool.
Are you already using QR codes in your marketing? If so, feel free to share in the comments how you are using them and the results you are seeing.
On October 5, 2011, the world lost a legendary entrepreneur, Steve Jobs. We all know Steve Jobs as co-founder of Apple, but in this article I wanted to write a short biography about his life and remember a person who inspired and motivated us all to become more technologically-savvy and better entrepreneurs.
Steve Jobs was born on February 24, 1955 to Joanne Simpson and Abdulfattah "John" Jandali, two University of Wisconsin graduate students who gave their unnamed son up for adoption. Steve was adopted by Clara and Paul Jobs and grew up in Mountain View, a town within California’s Silicon Valley. Steve first became interested and involved in electronics when he and his father Paul worked on cars in their garage.
Steve was not your average student. He was so smart that at one point in school he tested so well that administrators wanted to skip him ahead two years to high school, which his parents declined, although they let him skip one grade. During high school, Steve spent most of his free time at Hewlett-Packard (aka HP), where he met and worked with Steve Wozniak. After high school, Jobs enrolled in Reed College in Portland, Oregon. Lacking a sense of direction, Jobs dropped out of college after 6 months and spent the next eighteen months auditing a variety of creative classes.
In 1976, at the age of 21, Jobs and Wozniak started Apple Computer out of the Jobs family garage; they funded their entrepreneurial venture after Jobs sold his VW bus and Wozniak sold his beloved scientific calculator. Jobs and Wozniak are credited with revolutionizing the computer industry by democratizing the technology and making the machines smaller, cheaper, more intuitive and more accessible to every day consumers.The two men conceived a series of user-friendly personal computers that they initially marketed for $666.66 each. Their first model, the Apple I, earned them $774,000. Three years after the release of their second model, the Apple II, sales increased 700 percent to $139 million dollars. In 1980, Apple Computer became a publically traded company with a market value of $1.2 billion on the first day of trading.
In 1984, Apple started to suffer significantly from design flaws, and IBM's sales suddenly surpassed Apple's sales. That same year, Apple released the Macintosh; despite positive sales, the Macintosh was not IBM-compatible. About this time, John Scully, Apple’s president, thought Steve Jobs was hurting Apple, and he began to plot against him.
In 1985, Jobs resigned as Apple’s Chairman to begin a new hardware and software company called NeXT, Inc. The following year, Jobs purchased an animation company from George Lucas, which later became Pixar Animation Studios, in which Steve invested $50 million of his own money. Pixar produced such films as Toy Story, Finding Nemo and The Incredibles. Pixar has since netted more than $4 Billion. The studio merged with Walt Disney Studios in 2006, making Steve Jobs Disney’s largest shareholder.
NeXT, Inc floundered and was eventually bought by Apple in 1997 for $429 million; that same year, Jobs returned to his post as Apple’s CEO and immediately revitalized Apple.
Most people are famliar with what happened next: Apple became an extraordinary company, with a new management team and new products, such as the Macbook, the iPod, the iPhone and, ultimately, the iPad. Jobs received stock options but worked for a self-imposed annual salary of $1.00. Jobs put Apple back on track and we are all aware of the recent innovations that cannot and will not be matched by any other software company in the world.
Unfortunately, Jobs' life took a tragic turn in 2003 when he was diagnosed with pancreatic cancer. Jobs did his best to fight the cancer but it eventually took his life on October 5, 2011. He was 55.
From all the entrepreneurs in the world, I would like to say thank you to Steve Jobs. He was an inspirational man who will always be remembered for his resiliency and passion to succeed, and for making technology not only better but also accessible.
R.I.P. Steve Jobs.
You can read a full biography of Steve Jobs at biography.com.
Recently, Delaware’s governor Jack Markell joined a delegation of Israeli and American chief executive officers in ringing the opening bell to celebrate the fifth annual Israel Day at the New York Stock Exchange. This event kicked off a full day program highlighting business innovations that can lead to new partnerships and mutual investments, creating business opportunities in both the U.S. and Israel. Many of these businesses are and will be incorporated in Delaware. More than 55% of corporations listed on the New York Stock Exchange are already incorporated in The First State.
The conference highlighted the innovative businesses, from leading global companies to smaller startups. It was an opportunity for keynote speaker Governor Markell to present the many advantages of Delaware as a center for business startups, research and development, as well as finance. Because of Delaware’s modern and flexible corporate laws and friendly business environment, it has an important role in enabling modern business partnerships that were the focus of the conference.
“Israel and Delaware businesses share a great potential for partnership,” said Governor Markell. “Israel has led the world in finding ways to successfully commercialize research. Delaware businesses and our universities have focused increasingly on finding ways to commercialize academic research. We are becoming a strong national leader in bio-technology, alternative energy, composites, and electrical engineering. Delaware welcomes innovation and we want more innovative businesses to call Delaware home.”
Further highlighting the business advantages of Delaware he added, “Though Delaware is a small state, we have the highest per capita concentration of patent holders and Ph.D. researchers in the United States.”
This event and many others continue to showcase Delaware as the highly favored state of incorporation for US as well as innovative world-wide businesses.
Forbes.com has published an interesting and valuable article, "10 Mistakes Growing Companies Routinely Make." Check out the excerpt below:
1. Wait until your company is up and growing before you formalize it. Some entrepreneurs can’t decide if they want to be a Limited Liability Corporation (LLC) or a C-corporation, or they don’t have the money, so they put off doing anything until the first venture capital round, or until the first lawsuit occurs. The simple answer is to do something, and start simple. In almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. This step shows everyone you are serious, and limits your liability on any mistakes. It also forces you to pick a name for your company and put other intellectual property stakes in the ground. It’s not that hard to change later to a C-Corp. Company and product naming may also seem simple, but should be a key early effort, because mistakes can be very costly. You may recall the Chevy Nova, a compact car from GM. Pundits in Latino countries quickly pointed out that the name, ‘no va’ means ‘does not go’ in Spanish. Professional advice in this area is highly advised. Cultural and religious implications must be very carefully considered.
2. Rely on informal agreements with partners. You may all be friends, or spouses, today, but things do change quickly in the stress of a growing company. The same principles apply to strategic partners. Early co-founders often drop out of the picture due to disagreements, and you forget about them, but they don’t forget about the verbal promises you made. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to all founders. I know two former friends who are still killing each other financially years later over an unwritten agreement, remembered differently by each.
3. Quick to hire and slow to fire. If you are growing quickly and desperate for help, you may skip on the homework of a proper job description, or validating applicant credentials are a fit before you proceed to interview. The message here is that if you don’t know exactly what help you need, you probably won’t get it. Hiring after one interview is like hopping a red-eye to Vegas to get married after one date. Equally bad, you may know what you want, but you are trying to force-fit the candidate into the position. Maybe she’s related to the boss, or you are confident that the candidate will be a good helper, and can learn a lot from you. Helpers are expensive, since it often takes longer to jointly do a job than it would take one qualified person to do it alone. On the other end of the process, don’t hesitate to pull the trigger fast when a new hire isn’t working, but don’t forget to be human and follow all the steps. Carrying a non-performing employee probably triples the costs, since you are paying two people to do the job, and at least one other is de-motivated by the inequity.
4. Only hire people who like you or think like you. Flattery feels good, but it doesn’t pay the bills. Look for the thoughtful challenge to your ideas, and practice active listening, when you are selling your vision. High three-digit intelligence has value. Some executives think they can mix business with pleasure, with inter-office relationships. We all have our favorite story on this one. Make it a rule to not fraternize with your employees, and choose your partners wisely.
5. Be super-conservative on your cash needs. Double-check both the money you need before funding, and the size of investor funding requests. You will be amazed at how many items you forgot to cover, and how fast the cash disappears. You should buffer the first by 50%, and the second by 25%. Severe cash flow problems are a big mistake, and may not be recoverable. When you have people and their families depending on you for their paychecks, and you are strapped for money, there certainly won’t be any money for growth. Even if you can find someone willing to help, it may be a very expensive proposition. Cash is more important than profit.