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flower smallA unique selling proposition, or USP, is the one feature of your business that makes it unique from your competitors. It is what drives customers to purchase your goods or services over your competition. It makes you stand out from the crowd. Maybe you are focused on locally sourcing handmade goods to sell in your storefront or you offer a custom design feature as part of your home organization service.

To create a USP, you first need to pinpoint the feature or unique benefit that you offer that makes your business stand apart. You can approach this from your customer's point of view. Why do they choose you over a competitor? Is it because your handmade soaps are made with coconut oil instead of palm oil? Is it because you offer a quick turnaround time or unique portrait experience in your photography business? Are you a graphic designer who offers custom illustrations on wedding invitations? All of these factors could set you apart in your industry. A USP should answer the question, what makes you different? 

There are more ways than ever to raise capital for your business venture. You could secure a traditional loan or crowdsource capital. It is important to find the right funding fit for your business. You may piece together financing from different sources depending on your needs.

Capital 02

1. Determine your financial needs. Here is a helpful guide from the SBA to help you calculate your costs:

https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs

2. Research what funding options might be right for your business.

3. Gather your information. If you don’t have a written business plan, now would be a great time to do that. Your business plan will serve as a blueprint for your business. It will include your financial needs, market research, and development projections. The Big Bad Business Series will host a Workshop, How to Write a Business Plan, in conjunction with the University of Mississippi Small Business Development Center in April. See more of our upcoming events and workshops here:

https://www.oxfordarts.com/incubator-events

4. Secure funding. Your funding source will depend on your business model, your financial needs, and how you can sell yourself and your business plan. Finding the right fit for funding will increase your chances of securing capital.

Banks & Credit Unions.

These lenders provide term loan options or a line of credit. With a traditional business loan, good personal credit and collateral are required. The loan application process may take some time. If you need funds quickly, this might not work for you. This option is great for established businesses that have a good credit profile and a strong business history. If you have a well-established relationship with a bank, I recommend speaking with them to see what they have to offer your business.

Before you apply for a loan, it is a good idea to familiarize yourself with your credit profile and your business’s credit history. Research loan and lender options to see what will work for your situation. Compare interest rates, loan restrictions, and terms. For instance, is there a penalty to pay your loan off early? How will this process affect your credit score? What collateral is needed to secure funding? It is important to select a lender that fits your financial needs.

Investors can be a great way to secure funding for your business. How do you find investors? Network, network, network. Use opportunities such as workshops, conferences, and business events to meet people. To attract investors, prove you’ve done your homework. This includes a well-written business plan, industry knowledge, and excellent market research. Show how your business stands out from the competition. When it comes to finances, make realistic projections for growth. Take your business seriously and investors will too.

Crowdfunding platforms such as Kickstarter and Indiegogo allow you to seek small funding from multiple investments instead of a single source. These investors are not typical investors as they do not share ownership or expect a financial return on their investment. Some businesses offer incentives for investing or gifts for investing, making this a fantastic financing source for a creative or product-producing business.

Would you like to stay informed about the upcoming workshops? CLICK HERE to sign up for The Big Bad Business Newsletter! 

 


 

Choosing how to form your business is one of the most important business blocks in building your business. The entity you choose will affect many factors of your business including how you name your business, what your personal liability is, how you file taxes, and where and how you secure funding. Spend the time, do your research, consult with professionals, and choose the right business structure in the beginning.

Sole Proprietorship

  • The definition of a Sole Proprietorship is “an unincorporated business that is owned by one person who reports business profits on his or her individual tax return and pays personal income tax on profits earned by the business.”

  • Sole proprietorships are considered pass-through entities, meaning the profits are passed directly to the owners.

Partnerships

  • The definition of a Partnership is “an unincorporated business shared by multiple owners.” Profits are divided among the owners and reported on their personal tax returns.

Types of Partnerships

1--General Partnership 

  • The most basic and easy to form partnership is the general partnership. This does not require registering or forming an official business entity with the state. Most general partnerships operate from a partnership agreement.

2--Limited Partnership (LPs)

Business structure

  • LPs are official business entities that require registering with the Secretary of State.

  • Limited Partnerships are used when a business has silent, or limited, partners. This happens when there is at least one general partner who takes responsibility for the business and one or more limited partners contribute money but do not actively participate in running the business.

3--Limited Liability Partnership (LLPs)

  • LLPs operate similarly to general partnerships, establishing a division of labor and responsibilities between partners. Unlike general partnerships, this business structure is considered a legal entity.

Limited Liability Company (LLC)

  • A Limited Liability Company, or an LLC, is a formal partnership that requires articles of organization to be filled with the state. It is a hybrid business structure of partnership and corporation. It has the flexibility of a partnership but the protection of a corporation in that the owners are not personally liable for the company’s debts or liabilities. 

  • Unlike a corporation, an LLC is taxed as a pass-through entity, passing the profits directly through to its owners, also called members. Members can be employees. Their wages classify as operating express and are deducted from the business profits. Losses can be used to offset income, but only up to the amount invested. By default, the IRS sees LLCs as a pass-through entity, though owners can opt to classify as a corporation.

S Corporation

  • An S Corporation (S-Corp) has the benefit of incorporation with the taxes of a partnership. S Corporations have one class of stock and a limit of 100 shareholders which can consist of individuals, specific trusts and estates, or certain tax-exempt organizations. Shareholders cannot be a for-profit business, partnership, a nonresident alien, or another corporation. 

  • Like Sole Proprietorships, Partnerships, and most LLCs, S Corporations are pass-through entities and do not pay federal taxes at the corporate level. The profits and losses are passed directly to the shareholders, or owners, to report on their individual tax returns. Shareholders, or owners, have limited liability. The corporation protects their personal assets.

C Corporation

  • Unlike S Corporations, C Corporations are taxed as separate entities from their owners. Profits are taxed at a corporate level. Any dividends paid to owners are paid after profits are taxed. Shareholders, or owners, must also pay taxes on their proceeds, creating a double taxation situation.

  • C Corporations limit their shareholder’s liability, protecting personal assets above the shareholder’s initial investment.

  • Also, unlike S-Corps, C Corporations have multiple classes of stock and an unlimited number of shareholders. A C-Corp is a great fit for a startup seeking investments, a company looking for rapid growth requiring cash, or if your plans for your business include becoming a publicly-traded company.

If your business is located in Mississippi, here is a list of entities recognized by the Secretary of State:

https://www.sos.ms.gov/businessservices/documents/business%20entities%20(clean).pdf

If you have any questions regarding the setup of your business entity I encourage you to speak with an attorney or accountant. Especially when it comes to more complex LLCs and corporations. You can reference a previous blog posting where I talk with local business owner Taariq David about establishing his LLC through the Transactional Law Clinic at The University of Mississippi.

The new year is bringing a new newsletter! Do you have a topic you’d like to see on the blog or in your inbox? CLICK HERE to submit your topic and sign up for The Big Bad Business Newsletter!

 


 

apple bikeBrand building is defined as “the process by which a company creates or improves customers’ knowledge and opinions of a brand.” It creates a relationship between your business and its consumers. It establishes trust, and it entices people to buy from you. Building your brand is more than just choosing a name, colors, fonts, writing a slogan, and designing a logo. It is defining your brand’s identity, deciding who you are, and what you stand for. 

How will you present your brand visually? Think colors, font, and logo design. A logo is a symbol created to help customers identify a brand. Design a logo that matches your brand’s identity. A few rules of thumb of logo design are the logo must be appropriate for the business concept, it needs to be memorable, and it should be simple. Design a logo that matches your brand’s identity. A logo is a symbol created to help customers identify a brand. Good logo design is an art as well as a science. If your budget allows, I recommend hiring a professional to work with your brand vision to create a logo. If you are going to forge ahead and design your logo, there are a few tried and true standards in the design industry. 

DO’S & DON’TS OF LOGO DESIGN:

DO’S

  • Do keep it clean, creative, and simple. Let your logo speak for itself. Let it tell people what your brand is and what it does.

  • Do create a one-of-a-kind logo to set your business/brand apart from the competition. Be distinct. Be different.

  • Do choose the right font for your brand. Avoid chaos and limit the number of fonts to two. It is ok to play around with lowercase and capital letters. Be mindful of legibility. Is it legible when small? Does it compliment the fonts you have chosen for your website? Logos should be easy to read.

  • Do consider scalability. What will your logo look like in different sizes? Does your logo look good from a distance? Will it be legible and attention-grabbing on a business card? 

  • Do have color variations of your to make sure it stands out on any background. This will assist in eliminating printing limitations. Make sure it works in full color, black & white, in a knock out option, and as a single color print (such as one color embroidery).

  • Do use contrast in your favor. Select a background color that allows your text or icon to pop. Think about the visibility of your design.

  • Do explore conceptual designs and metaphors. Essentially a logo is a simplified icon that captures the identity of your brand. It does not need to be a literal image depicting what your business does.

  • Do think about colors. Do you have a brand color palette? Here is the perfect place to use it. Consider the emotions tied to colors.

  • Do make sure your design is balanced. Maybe this is aligning the elements to the center. It might be making sure the icon is properly sized in proportion to the text.  

  • Do be consistent. Choose your logo and stick to it. While your marketing strategy might change your logo shouldn’t. You may have multiple variations of your logo to fit different sizes/orientations. Make sure they are cohesive and retain the look of your branding.

  • Do ask for opinions. Do include your target customers in your opinion group. Show them multiple logo designs and be open to suggestions for improvement.

  • Do make sure you have your logo saved in multiple formats including vector (.ai/.eps/.svg) and raster (.jpg/.png) for all of your variations.

DON’TS

  • Don’t make your logo overly complicated or too detailed. A complex logo will lose scalability. Do not try to force a bunch of information into a tiny space. Don’t use drop shadows. It can create visibility problems or make your logo look messy.

  • Don’t use clip art. It’s essentially free, which means someone else might be using the same thing for their design. Consider having a professional create your logo. It is an investment in your brand. Think of all the places your logo will be visible!

  • Don’t use unnecessary wording. A logo should be an icon for your business. If you do add a tagline to your logo, make sure it is balanced. The tagline should be secondary. Or simplify it and save the words for your slogan.

  • Don’t crowd your logo. Allow breathing room in your design. Pay attention to spacing, composition, and negative space. Use them to your advantage.

  • Don’t forget about your target audience. Will your logo look appealing to your customer base? What is your ideal customer attracted to? Your logo should appeal to the tastes of your potential clients.

  • Don’t copy or imitate an existing logo. You want to stand out, not stand behind. Plus, it's plagiarism. Your logo should be unique and represent you, not something you pulled off of Pinterest.

  • Don’t follow trends. They are constantly changing and evolving. If your logo is trendy it might be outdated in a blink.

  • Don’t forget--your logo should make you happy. Keep your target market in mind when designing your logo, but you need to be happy with it as well.

Interview with Karla Merritt Gates

For a little more insight into the challenges of branding and logo design, I reached out to Karla Merritt Gates, graphic designer and visual strategist. Karla is also a small business owner and a founding member of creativeMERRITT, a creative design and business development team. You see her work (including logos) at creativemerritt.com

As a designer, creative director, and business owner what tips can you pass along to entrepreneurs who are building their brands and creating their “look”? 

Be calm. Don’t overthink it in the beginning. You may not even understand what a “brand look” is, and that’s ok. Developing a brand look or personality takes time. Just as you have to learn and understand payroll and processes — branding, marketing and advertising are learned skills. Try not to be overly intimidated by the creative process. There is no secret code that you're missing; again, it takes time. Start by reaching out to someone you trust that owns a company and ask them how they handle their branding and marketing. If you do decide to hire a creative professional, and they make you feel intimidated in any way — find another one asap. A creative director or graphic designer should be a partnership not a dictatorship. Never feel guilty if you don’t mesh well with a marketing professional — the professional’s job is to educate and mentor you in creating success for your business. 

Visualize your business as a person: What kind of person would they be? What kind of style would they have? How would they talk or interact with others... that is the basis of your brand. Think back to the first time you thought of the idea that is now your business and build on those initial thoughts. As your business grows and evolves, so does your brand identity. 

Be curious. Take note of things that are visually interesting to you, as well as, other businesses that you think are visually appealing. You can learn a lot of what not to do by paying close attention to the world around you. Pick up business cards, mailers or anything that is an advertisement for someone else’s business, then think of yourself and how would you handle your message, your colors, your images, your logo. Begin to formulate your own advertisement as you consider your preferences and your planned target audience. 

surfBe consistent: Pick 2 colors and stick with them in all instances. Repeat the same colors on everything you print, mail or email. Never change your colors until you know for sure you should — if you're unsure — don't. A simple repeated color palette can take you a long way as your business grows. The idea is that potential customers, over time, will see your name and associate it with your colors and graphics. The colors you choose should clearly represent the nature of your business. A quick google of the meaning of colors will help you understand basic color theory. If you are still unsure, stick with black. You can always add a secondary color as your business grows. Fonts should be treated the same way. Avoid complicated or hard to read fonts for your logo and branding. Choose a simple font and stick with it. Looking at business cards can be a great way to understand how your logo should work. If you shrink your logo to fit on a 2" card, you will see that “simple” is the best way to go.

Is there anything you wish you had known before you started your business? 

Not really. I was older when I went out on my own, so I had plenty of time to learn and plan. However, a better understanding of paying taxes for a self-owned business would have been helpful.


That’s where this blog and subsequent book come into the picture. Along with the Big Bad Business Series, I hope to bring business knowledge to those starting and growing their business. Self-employment taxes will be covered in an upcoming blog. If there are any other business related questions you have please email me at This email address is being protected from spambots. You need JavaScript enabled to view it.. Thank you for following along -Andrea


 

 

create

If you’re anything like me, you might want to do as much as possible yourself. I wanted to know as much as I could about the processes and ins-and-outs of my business. Also, my budget was tight and doing what I could on my own allowed me to focus money in other places where I felt it was necessary to hire a professional. One way to ensure your business succeeds is to hire well and give your team the leadership and skills needed to advance your vision.

A JOB POSTING is an advertisement to attract applicants. It should include the job title, a brief job description including responsibilities and work to be performed, location, and a list or summary of qualifications. It should also include important business details such as benefits provided, company culture, and mission. You may also want to include the rate of pay though it isn’t necessary.

  • Make your job title-specific for the role you need to be filled. 

  • Start with an attention-grabbing summary. Why is it exciting to work at your company? What makes your business unique? Include the job position expectations and the location of the job. 

  • Outline the responsibilities and day to day activities of the position.

  • Next, you will want to list the qualifications and skills required-include any education requirements, wanted experience, hard skills, and soft skills

  • Include a list of perks or a “what’s in it for them” section. Mention flexible hours, any PTO offered, dog-friendly workplace, educational opportunities, and any other perks your business had to offer. You may or may not disclose the rate of pay in your job posting, if you choose to you should do so here.

  • Does the applicant apply directly to the posting or should they email you directly? Include any necessary contact info.

I recently had the opportunity to sit down with Taariq David, a restaurant industry consultant, on his front porch one beautiful fall day. We discussed creating culture in the workplace, leading a team, and the excitement (and challenges) of starting a new business. Taariq talked about forging ahead with his new ventures David Hospitality and Hospitality Bruhs. 

ME: Tell me about Hospitality Bruhs: how big is the team, how it got started, and the goals of the business.

TAARIQ: After 20 plus years in the restaurant industry it seemed that the next natural step for me would be to open a restaurant. However, I felt like I had already done that with Saint Leo. Hospitality Bruhs came about organically talking to my boy Paul in Detroit. He said “My boy Sam's a chef, he's going to put a recipe together for us to cook. Can you recommend a cocktail for it?” From that it was “Let’s do an interview on zoom. I see this as a tv thing, a podcast…” then brainstorming and boom-Hospitality Bruhs. 

Our next step is to set up a Patreon account where we will post quick videos like “How to Set up Your Bar” and “5 Tools Every Kitchen Should Have” along with instructional sessions, food and cocktail demos, interviews, and discussions surrounding the hospitality industry. We will also offer live stream cooking events.

ME: David Hospitality Services is a consulting firm for bars and restaurants. They can lean on your industry expertise to build a team and expand upon existing skills. How did you decide to branch out from a hands-on team leader to a consultant who helps restaurants to improve their service and elevate their team?

TAARIQ: Restaurant Consulting is essentially everything that I’ve been doing for the past decade for others as a General Manager. Now I’ll be doing it for myself, for David Hospitality. For over half of my life I’ve been creating training programs. I’ve been watching the service, the culture, and the systems that are in place, and seeing what needs to be tweaked in restaurants. I definitely envision the consulting being a hands-on type of process as well. 

With David Hospitality I have the knowledge to get clients where they want to go and give them the tools to be successful. I’m going to start by cold calling, networking, building, and see what happens. David Hospitality will offer tiers of service, a one-time training program, once a month refreshers, contract for twice a month, whatever the budget and needs of the company are. As you know, this is a tricky time for restaurants. 

I set up the business as an LLC then I was like, now what. I’ve been working with the Transactional Law Clinic at the University of Mississippi. They’ve answered questions that I couldn’t figure out. We’ve been working on an operating agreement for a single-member LLC and a contract template for new clients. They have been extremely helpful. 

ME: You were the general manager at a handful of restaurants in Oxford, recruiting and leading staff along the way. You reached out to me to join the team at Saint Leo because of our experience working together. What is it like to build a team from scratch vs. adding to existing staff?

TAARIQ: Both have their own unique set of challenges. The training process is easier when you are building it from the ground up. Implementing culture is easier right off the top, rather than trying to shift a culture. With a new business, you can build your team based on the culture and training program you created, check out the vibes of the staff, and see how they mesh.

If you already have a staff that is used to doing things a particular way, they have to unlearn and relearn. That’s more of a process when implementing menu knowledge or a new bar program. It takes more time than building fresh. You don't have to battle the “this is the way we’ve always done it” when starting fresh.

Established daily, monthly, and yearly sales history to date make it easier to project sales so it’s easier to plan and staff an established restaurant. You can’t do that with a new place, especially the first year out. A normal pattern hasn’t been established.

______________________________________________________________________

Business Resources:

The Transactional Law Clinic

University of Mississippi Law School

Marie Cope (Co-director):mscope@olemiss.edu

Cameron Abel (Co-director: This email address is being protected from spambots. You need JavaScript enabled to view it.

https://law.olemiss.edu/academics-programs/clinics/transactional-law-clinic/

I found this article from Square on hiring employees to be a quick read and full of information:https://squareup.com/us/en/townsquare/basic-labor-laws-how-to-hire-employees-correctly


 

For most of us, the financial side of things can feel a bit daunting. It feels overwhelming to balance a checkbook. Who even knows how to properly reconcile an account? And then comes tax time-I dread tax time. Pulling out receipts, trying to organize bank statements, figuring out what I can write off, and getting it all organized before the looming April 15th deadline is anxiety-inducing. If you are an entrepreneur, that task can double. 

bankingBank reconciliation ensures payments have been processed and cash collections have been deposited into the bank. The reconciliation statement helps identify differences between the bank balance and general ledger balance, and to process necessary adjustments or corrections. A general ledger is the main accounting record of a company or organization.

https://www.fool.com/the-blueprint/account-reconciliation/

Big thanks to Miriam Hobson and Tina Tidwell at FNB Oxford, who were kind enough to answer my questions. Tina walked me through the process of setting up a business bank account. How your business is structured depends on the paperwork you will need to open the account. For example, when creating an account for an LLC (Limited Liability Company), you will need the business' tax ID number. You may need organizational documents, business licenses, or personal information for the business owner. Check with the bank of your choice for the documents they require when opening an account.

Tina also walked me through the types of business bank accounts available. Checking accounts are the most common form of business bank accounts. Depending on your business needs you may also want a savings account, credit card, or merchant services account for credit card processing. FNB offers all of these options. Check with the bank of your choice to see what they offer that fits your business's account needs.

When deciding on a bank for your business consider a few factors:

  • Do you have an established relationship with a particular bank? 

  • Is the bank convenient for you? 

  • Does it offer the services you require?

  • How does the online banking system work with your bookkeeping software (if you are using one)?

It is best to keep your business accounts separate from your personal ones. It will improve your ability for expense tracking and reconciling your statement. Deductible expenses will vary from business to business; however, a few remain standard across the board. You can deduct office expenses including office supplies (printer ink, paper, rubber bands, etc.) and a home office. 

  • Business Expenses are the cost of operating a trade or business. These expenses are usually deductible if the business operates to make a profit. General business expenses include things like office expenses, home office, and business-related travel expenses. If you use your personal vehicle for business you should track your mileage and gas expenses. You will be able to claim a business mileage deduction

  • Capital Expenses depreciate-you can deduct them on a depreciation or amortization schedule over time. These assets include business start-up costs, business improvements, and vehicles.

  • Cost of Goods Sold-If you create or purchase products for resale you must value the costs of goods sold, or inventory, at the beginning and end of each tax year. These expenses can also include the cost of raw materials, storage, labor costs for production, and certain overhead such as studio space.

Track your expenses-know your costs in life and business. Track your materials used, supplies, time, and any operating costs. When I assisted in bookkeeping for a local photographer we used a spreadsheet with various columns to keep tabs on expenses. There was a column for travel, office supplies, utilities, and freelance contracts. You don’t necessarily need fancy accounting software to track expenses. 

If you need more detailed information about business expenses or banking please reach out. I have more information than I could fit into two paragraphs. In the future, I will look into various bookkeeping software to help with banking and expense tracking. If you have a system that you use and love I definitely want to hear about it. Shoot me an email at This email address is being protected from spambots. You need JavaScript enabled to view it., I look forward to hearing from you!

Andrea Drummond
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