Yes, no, sometimes and maybe.

The answer as to what registration is required for a business depends on two things: (1) the legal entity you create to operate your business and (2) the nature of your business.

Small business owners often make the mistake of creating a corporation or LLC without completing basic steps.  Use this short checklist to review whether you formed or registered your business properly.

1. Pick the right legal structure for your business. Your options include the limited liability company (LLC), general or limited partnership, limited liability partnership or corporation. Your business lawyer and your accountant should be consulted.  You should consider such factors as the number of owners, the business plan, the capitalization plan, taxes and other factors.

2. File a Certificate of Business Name. Most businesses use a shorten name, called a trade name, for marketing purposes.  ACME Medical Products, Incorporated will be marketed as “ACME” or “ACME Medical Products.”  One of the cheapest and most important things you can do keep your limited liability “shield” in place is to file a Certificate of Assumed Business Name in order safely to use trade names.

3. Register for your business’ Federal Tax ID. All partnerships, multi-member LLC’s and corporations must have an Employer Identification Number, which can be obtained from the Internal Revenue Service.

4. Register with the State Revenue Agency and Obtain Permits/Licenses.  Depending on the nature of your business, you may be required to register with your state, especially if you sell a product and are required to collect sales tax.  In some parts of the country, you might even be required to obtain local permits or licenses.

Of course, this is the short list, and your business may be required to obtain other permits or licenses, or you may be required to register with other governmental agencies.  See your legal advisor for help.

Matthew A. Griffith is an attorney, business performance coach,mentor and entrepreneur.  He coaches, advises and guides business owners, entrepreneurs, inventors, property managers, investors and real estate professionals.  Matt has nearly two decades of experience helping businesses grow.

Starting and running a small business takes desire, passion, skills, knowledge and talent. It also takes research and planning. While many small or start-up businesses can recover from early mistakes, many cannot.  Every small business makes initial mistakes, but no small business can survive fatal missteps.  So, planning is important. 

Explore and evaluate your business and personal goals.  Using those goals, craft a comprehensive and thoughtful business plan that will help you reach these goals.  The process of creating a plan forces you to think about important issues that you might not think about without planning.

A plan is a valuable tool that can serve multiple purposes.  But like hand tools, a business tool left in the “tool box” and never used is worthless.  Again, the process of planning is most important, rather than detailing the plan in a formal written document.  I recommend that plans be written, but the written document is not more important than the planning process itself.

Let’s Get Started-

List your reasons you want to start a new business. Consider this list to start your thinking:

• Self-management or freedom
• Financial independence
• Creative freedom
• Maximize personal skills and knowledge you’ve developed over the years

Decide what type of business is right for you. Ask yourself:

• What do I enjoy doing?
• What skills have I developed?   What value can I add?
• What am I good at doing?
• How much money do I need to support myself?  My family?
• How much time do I have to run a successful business?

What’s my business niche?

• What business do i want to start?
• What services or products can I sell?
• What need, want or desire can I meet?
• Will buyers pay for it?
• Is there competition?   Competition is not always bad, as it demonstrates a market for your product or service.
• What strategic advantage do I have over the competition?
• Can I deliver a product or service with better quality, cheaper, faster?
• Do i have to create a demand for my business?   How hard will that be?

Finally, consider these tough questions:

• What skills and experience do I lack?
• What legal structure will I use?
• How will I keep business records and data?
• What insurance do I need?
• What equipment or supplies do I need?
• How will I pay myself?
• What are my resources?
• What are my cash or credit needs?
• What facilities do I need?  Is location important?
• What will I name my business?   Is my brand important?

As you can see, these lists are long but still probably not comprehension.  Small business owners must go through this process.  It’s not always fun, and the answers might suggest that starting a small business is a bad idea.  Resist the urge to accept any answer that furthers your dream but is not supported by facts.  In other words, as you answer these question, be honest with yourself.  Not every business should be started.

If your honest answers suggest that starting a new business is a good idea, use your answers to create a focused, well-researched business plan.  A good plan is a blueprint for business operations, management, and capitalization.  Review your business with your business lawyer, your CPA, friends and business associates.  Schedule a monthly review of your plan, and be prepared to change the plan frequently.  A good business plan is a flexible one that should change as you encounter obstacles and your business grows.

Matthew A. Griffith is an attorney, business performance coach,mentor and entrepreneur.  He coaches, advises and guides business owners, entrepreneurs, inventors, property managers, investors and real estate professionals.  Matt has nearly two decades of experience starting small businesses and helping businesses grow.

Businesses fail.  Most businesses fail, because they run out of momentum.  You’ll hear that described in various ways, like: 

• High debt service.
• Shift in markets.
• Poor cash flow.
• Insurmountable rise in costs.
• Inflation.
• Recession.
• Insufficient capital or “under-capitalization.”
• And so on.

Those are just sad excuses for a business to fail.  In the end, every business failure is the result of the owners and managers failing to identify and plan for future opportunities and threats.  I am not a big fan of SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), because it usually does not translate into action.  SWOT sessions  make management feel good that they involved the whole “team,” but concrete action steps are not often listed, assigned to personnel and followed up later.

Done well, SWOT can benefit a business.  It’s just not done well often enough.

Another approach is more akin to Kaizen theory, which is generally defined as incremental but continuous improvement.  That works well, if a business has two key things:

1.  An Operations Manual

2.  Regularly scheduled meetings to review and improve the Operations Manual.

SYSTEMS!    That is the key to operating a business well.  A system enables a business to all these things as a part of what the business itself does:

• Deliver the same quality good or service each time to every customer.
• Identify quickly the cause of any problem resulting in lower quality.
• Identify new customer needs and wants, which is often a signal for a new market opportunity.
• Identify trends suggesting that your current offering of goods or services is becoming obsolete.
• Reduce inefficiencies.
• Reduce risks and losses.
• Grow market share by effectively communicating with customers and future customers.
• Identify new vendors, alternative sources of materials, labor-saving equipment/services, and strategic partnerships.
• And so much more.

I’ve watched dozens upon dozens of businesses fail over the years.  In the final analysis, each one failed because each lacked systems.  None were fully committed to systematic business operations.  The owners and managers thought too much about making widgets and not enough about building a business enterprise.

So, what is your business doing?  Are you building widgets?  Are you simply creating or maintaining jobs for the owners or managers?

Or are you fully committed to building a business?  Are you developing the systems needed to build your business enterprise?

Shareholder disputes are time-consuming, expensive and counter-productive. Shareholders disputes are easy to avoid, if you agree on basic principles before shareholders come together as business partners. The basic principles include-

1. Who does what jobs.
2. Who gets paid what and when. (I include a provision to cover taxes.)
3. What happens if someone stops working or completing their job duties.
4. What happens if there is a buy-sell “triggering event” such as death, divorce, dissolution of the entity, disability, etc.
5. How elections are held to select company leaders.

The key to solving shareholder disputes is to AVOID them in the first place through buy-sell agreements, operating agreement and similar documents. Do NOT form your business partnership without addressing these issues IN WRITING AT THE START.

One final thought. . . pick your partners well. I have myself had to endure difficult and unreasonable business partners. So, trust me when I urge you to be cautious in selecting your partners. Assume each partner will be unreasonable at some point.

And get it in writing at the start!

I recently read Book Yourself Solid by Michael Port.  It’s a good read.  In fact, it’s a very good read.  I’ll probably buy the next book he writes.  There is already a follow-up book, but I’m not certain that it is all that different from Book Yourself Solid.

Book Yourself Solid is about generating more business for professionals, service providers and related businesses.  I’ve followed the lessons taught in Book Yourself Solid myself for some time.  Although there’s nothing revolutionary in this book, this author describes these tools and techniques in a clear and easy-to-follow method.  It’s worth buying and reading.

I then went to Book Yourself Solid website, as the book repeatedly encourages.  That was a little disappointing.  The website is one big sales pitch for other companies, books, services, authors, etc.  I felt constantly under pressure to buy something, which is the exact opposite feeling and atmosphere that the book teaches you to create in your customers.  That was ironic but still disappointing.

All in all, I recommend the book Book Yourself Solid but not the website.   There are other web-resources listed in the book.  Those other resources are worth exploring, but don’t bother going to the Book Yourself Solid website itself.  Stick to reading the book.

You think we’ve got it bad here in the United States?  You think the recession feels like the end of life as we know it?  Do you think this is as bad as it can get?

Hogwash!

We’ve got it made in the USA!

Hard work and intelligence go a long, long way in this country.  This is truly, absolutely and without doubt THE land of opportunity.  Unfortunately, it’s also the land of complainers and whiners.  We’re spoiled.  We have an extremely high standard of living, ready credit (even now!), free primary education, tons of governmental services, social safety nets, and opportunities every where.  Yet, most of what you hear these days is doom and gloom.

I just got back from the Caribbean, Panama and Costa Rice.  I can tell you from personal observation that we are very, very lucky to be in the USA.  The fine folks living in Central America do not have the infrastructure, markets, education, credit or opportunities we enjoy here in the USA.   It’s not even a comparison!

Yet, all I hear these days is how bad things are, and how people are suffering.  We’re suffering?  Really?  Tell that to 90% of the World’s people.  THEY are suffering.  WE are just feeling sorry for ourselves.  I know people have lost jobs and income in this country, but we have it GREAT here compared to what the rest of the World has to endure.

If you want to end the recession, then GET MOVING.  Stop waiting for Congress (which helped to screw this up in the first place!) to solve our problems.  If you own your own business, grow it faster.  Hire more workers.  Order more materials and parts.  If you manage business operations, get better at it.  Do something to make your operations better and better and better.  Get better every day, and your business will grow.  You’ll have to hire more workers.  You’ll create more jobs.  And, you’ll make more profits.

If we all stop listening to the bad news, the media will stop reporting it.  So, turn off the TV and stop reading Yahoo’s news on line.  Instead, get busy!

92% of us are employed.   Interest rates are still incredibly low.  Credit is hard to find, but you can still find credit or credit substitutes.  Try building strategic partnerships and alliances in lieu of financing.  Consider trades and exchanges with other businesses.  Talk to your customers, clients, vendors, suppliers, employees and even your competitors.  You never know where you’ll find opportunities. . .  especially if you’re not looking.

So, stop worrying.  Stop complaining.  And start making it happen.  The sooner we all get busy, the sooner the recession will end.

Stay out of court, because courts often make bad decisions that can have enormous impact on your business, your personal life and your finances.  If you stay out of court, you increase your chances of controlling your own fate.  If you let a judge decide, you have no control.

One of my law partners has a great expression about clients who get themselves entangled in lawsuits:

“When a client has to file a lawsuit or gets sued, he has already lost.”

What’s that mean?

It means lawsuits cost.  They cost you or your business:

• Time spent in the courtroom, in depositions, reading documents, talking to your lawyer, in mediation, reading court documents, searching for evidence, etc.
• Money for attorneys’ fees, expert witness fees, photocopies, travel, etc.
• Opportunities to make money elsewhere doing other things, to grow your business, or to take personal time to be with family and friends.
• Your health.  Lawsuits are stressful.  The only thing more stressful than getting sued is having to file a lawsuit.  Lawsuits are fun for lawyers.  I love them, from a professional vantage point.  I get to exhibit and sharpen my advocacy and strategy skills, but lawsuits are no fun for my clients.
• Goodwill or reputation.  Getting sued can hurt the image people have of your business or you.  The newspapers rarely report stories accurately.  Allegations and even rumors are often reported as facts.  People who really, truly know you and your ethos will be unaffected.  Everyone else,  including your customers, vendors and potential customers, will develop doubt in you to some degree.

A good lawyer-friend of mine just got a horrible ruling from a judge in a divorce case.  The judge was wrong and should be appealed, but at what cost to the client?  The judge robbed a father of all time with his children in a visitation ruling.  The father in the case is not a bad guy at all, but the judge, for whatever reason, decided that the man should no longer see his own children. 

Amazing isn’t it?  How can one human being exercise that much power over another human being.  This father is dying inside, because he no longer can see the children he loves so much.  It’s very sad, and that judge should be ashamed of himself.

In a divorce case, there is not much you can do in advance to avoid a divorce lawsuit.  Save your marriage, if you can.  Or, don’t marry THAT woman in the first place.  Ladies, don’t marry THAT man!  That is the only lawsuit prevention available in a divorce context.

But what about your business affairs?

Do you take these preventative measures:

• Meet with your lawyer when you are unsure of your rights?
• Meet with your CPA, lawyer and insurance agent at least once every year?
• Have your lawyer draft or review all your contracts?
• Have your lawyer develop an asset protection plan?
• Use limited liability entities properly to create a “corporate shield?”
• Train your staff on a regular basis?
• Have processes and procedures developed into an operations manual?
• Properly use insurance to transfer liability risks away from you or your business?
• Etc.

If you answered “no” to any of these questions, then it’s time to go see your lawyer.

Two weeks ago, I was sitting on a beach, looking out across crystal clear blue Caribbean waters with the sun about three hours from setting.  That’s when I noticed this pelican fishing.  Pelicans are large birds, so it takes some effort to lift off, clear the ocean’s surface and fly nearly straight up 50 feet or so.

The pelican slowly drifted in flight a few yards, searching for fish just below the surface, 50 feet in the air, and then the pelican folded in its wings to its sides, and would dive straight down to the ocean.  It torpedoed into the water, using its beak to stab at and capture a meal of fresh fish.

Amazing.  I watched that bird for nearly an hour.  It must have made 15 dives while I was watching.

What in the World does this story have to do with business?

You need to be “pelican like” in your business operations.  I know, I know. . .  we’re in a recession.  You have to watch cash flow.  You can’t afford to make mistakes.   Blah, blah, blah.

What was your excuse when we weren’t in a recession?  Frankly, you can’t afford NOT to take risks.

Too many businesses are too passive in exploring growth opportunities or bettering existing operations.  In a recession or in good times, you’ve got to be calculating, smart and aggressive.  Sometimes, you’ve got to go for it, just like a pelican diving for a meal!

You can be smart and aggressive.  You can take calculated risks.  Sometimes, a pelican dives but misses the fish.   Sometimes, businesses take chances that don’t work out well.  However, doing the same thing over and over without innovation, calculated risk taking and determination leads to slow deaths, for pelicans and businesses both.

Virtually every successful entrepreneur had several failures before their first success.  Then again, successful entrepreneurs understand the art of being “pelican like.”

What are you doing this week to catch more fish?

I am a huge fan of visuals!  I’m talking about concepts and ideas presented in a visual format of some type.

Why?

Because we are visual creatures.  Most people learn faster and better by seeing it first.  Then, after they can “see” the concept, we are more likely to grasp/understand the details and nuances that are best explained through words in sentences, paragraphs, articles or books.

I believe in visuals in my teaching.  I use charts, graphs, diagrams, etc. when I coach, counsel, lecture or teach.  I even use role playing, chair positioning, etc. as a way for my clients to learn and remember the lessons I teach them.  Years ago, I bought a book called “The Great Big Book of Process Visuals (or Give Me a Double Axis Chart And I Can Rule the World)” by one of my learning mentors, Alan Weiss, Ph.D.  I don’t use all the visuals in Doctor Weiss’ book, but I did learn a great deal from reading and studying it.  Mostly, I learned that I need to use visuals as often as possible to help my clients learn faster, learn better and retain more of that learning.

Here’s a great example of a visual from John Janash, of Ducttape Marketing:

Can you imagine trying to teach this concept by words alone?  Better yet, can you imagine that your listener would better understand the words alone?

I think not.  I think this chart shows and reveals and teaches a great deal about marketing, without any explanation at all.

However, I’m a lawyer by training.  And lawyers love to use lots of words.  So, I am going to dedicate several blog posts to exploring the concepts presented in this chart.  Until then, take 5 to 45 minutes simply to read and read again this chart.  Consider how it was outlined and structured.  Consider the color scheme.  What do the words mean to you?  Are there other words you’d use instead.  What is missing?  What is unnecessary?

Most importantly, what does this chart make you think about when considering your company or organization?

How can you use visuals to educate clients or customers?

How can visuals help you in management?

On the subject of what’s missing, read this:  http://www.roundpeg.biz/2009/03/marketing-organization-chart-revisited/.

SPECIAL THANKS TO LORRAINE BALL.  I got this chart from Lorraine Ball at Round Peg.  I follow Lorraine on Twitter and through my blog reader, and you should too!

If you run a business, you need a vacation.  In fact, you need to take a vacation regularly.  And NOT just a vacation to “recharge your batteries.”  I’m talking about a great vacation that makes both your personal life and your business life better.

Here’s what I did on my recent vacation and how my experience can help you as a business person.

Rule #1-   Do NOT try to “get away from it all.” 

DO take your cell phone.  Do check your email.  Do call into the office.

It’s hard to relax on vacation when you’re stressed out about your office, missed calls, office emergencies, clients or customers looking for you, etc.  The notion that we have to separate our business life from our personal life with a “Chinese Wall” is completely ridiculous and completely unrealistic.  If you feel better while on vacation by checking in with your secretary, assistant or manager a few times, then do so.  Don’t WORK, but do check in a few times.  You’ll have a better, more relaxed and fun vacation, if you know that you’ll return home and not have to face a catastrophe.

Rule #2-   Eat well.  Exercise.

Vacations are  a time to replenish, refocus, re-establish and renew.   That applies to our minds, bodies and souls.  Our hectic lives at home wear us down and wear us out.  We fall into bad eating habits and exercise routines.  You can stop those bad habits and establish new ones during vacations.  In fact, establishing good habits is really the best thing you can do on vacation.

I just returned from sailing through the Caribbean, and time in Panama and Costa Rica.  I always wanted to sail through the Panama Canal.  Now I have!  It was fun, adventurous and relaxing.  And, I ate well.  There are no fast food or drive-thru restaurants in the mountains of Costa Rica or along the Panama Canal.  I ate locally cooked rice, beans, chicken, plantains, etc.  Normally, I try to cut out caffeine during vacations, but I wasn’t going to pass up fresh coffee served at the haciendas in Costa Rica.  I did refrain from processed foods almost entirely, and I exercised.  Now my job is to get past the difficult first week back and stay on track to eat well and keep exercising.

Rule #3-    Read.  Something fun.  Something educational.

I read often at home and every day at the office, but there is always a growing stack of books and magazines by my bedside table.  Vacations allow me to read important business books and books of leisure.  I also read those magazines that have stacked up.  I read the magazines first, usually in the airport and in the plane.  I cut out the articles I want keep or read again.  Then, to lighten my suitcase, I throw away the other parts of the magazines.  I save the books for the beach!

Rule #4-   Come Home With Ideas.

Take some paper and a pen.  This is a time to reenergize and become motivated to be a better person and businessman (businesswoman).  You should outline ideas, hopes, concepts, aspirations, etc. that you’d like to accomplish when you return home.  Do NOT rewrite your business plan.  DO think about larger, exciting and interesting ways to come back from vacation and become better than ever.  Consider a few new ideas that you could implement when you’re back at it next week.  If you took the right books and magazines, you’ll have new ideas that excite you about the future of your company, firm or career.

And this Rule #4 applies to your roles as a father, husband, wife, daughter, girlfriend, friend, partner, etc.  This is not just about business.  I came home with ideas about being a better friend, father, son, brother, etc.

My financee and I spent hours on vacation talking about her law immigration law practice, our pending nuptials, and our future together.  We took a very fun “marriage workbook” with us, and had a blast going through it.  We talked about a wide range of topics, both personal and professional, and we came back ready to take on the World together.

Rule #5-    Make It Memorable

Have a great time.  Try doing something you’ve always wanted to try.  Maybe try white water rafting.  Or deep sea fishing.  Or, sailing through the Panama Canal.  Whatever it is, give yourself reason to remember how good it felt to reward yourself with time away from your routine and sources of stress.  Take a few vacation photos and tape them to your PC or desktop.  If you can remember your positive vacation experiences, you’ll remember that the routine stuff is worth it.  And, you’ll be more likely to take another vacation sooner than later.

Rule #6-   Follow Up When You Get Home

Now that you’re back, make the most of your vacation.  Schedule time on your calendar, or in your PDA or planner to follow up with things planned on your vacation.  Do these things:

• Do eat better.
• Do get better sleep.
• Do exercise.
• Do implement those business concepts, plans and goals.
• Review your notes and the magazine sections you kept.
• Do make changes in your personal life to feel more successful as a father, daughter, wife, etc. . .  and businessperson.

Here’s a final idea. . .  print a copy of this blog today, and put that copy in your favorite suitcase.  Tomorrow, schedule your next vacation.  Then, when it’s time to pack the suitcase, pull out and read this blog again.  Pack your magazines and books.  Get on the plane and start at the top with Rule #1.

Do these things, and your business will benefit tremendously.