She Owns It

Celebrating, Connecting, and Supporting Women Entrepreneurs

Why You Should Consider Getting Certified as a Woman Owned Business and How to Do It by @CorpNetNellie

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by Nellie Akalp

It’s 2019 and although the playing field for women-owned small businesses should be leveling out, the truth is women entrepreneurs still need some help to get a leg up on the competition. That’s where getting certified as a woman owned business can be beneficial. The federal government and large corporations are the nation’s biggest buyers of goods and services, and they often set aside contracts specifically for women-owned businesses. These contracts can be lucrative, reliable sources of income. 

If you want to go after federal contracts (either as a prime contractor or subcontractor), you’ll need to get certified through the Small Business Administration (SBA). The SBA designates two categories for certification: Women-Owned Small Businesses (WOSBs) or Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs). There are presently three nationwide organizations that the SBA has approved as third-party certifiers. They are:

  1. The Women’s Business Enterprise National Council (WBENC)
  2. The National Women Business Owners Corp. 
  3. The U.S. Women’s Chamber of Commerce

You can visit their websites to see which types of certifications they offer, check their fees for certification and find out about any other beneficial programs they offer. Once you are certified, you can be added to the organizations’ databases of women-owned businesses and attend matchmaking events and trade shows they host to help women find federal and corporate contracting opportunities.

What Do You Need to Get Certified?

Depending on what type of certification you’re seeking, some requirements may vary slightly. To qualify for a WOSB, the business needs to be:

  • At least 51% unconditionally and directly owned by women who are U.S. citizens
  • A woman must manage the day-to-day operations
  • A woman must make the long-term decisions for the business
  • A woman must the hold highest officer position in the company, and
  • This woman must work at business full-time during normal working hours

To qualify as an EDWOSB, you must meet the requirements above, plus have:

  • Personal net worth (assets minus liabilities) of less than $750,000
  • Adjusted gross income average over three years of $350,000 

For more on the specifics, see the SBA website.

To prove that a woman or women own at least 51% of the company, you must show that they have direct involvement in the daily operations of the business. This is to weed out married couples where the male owner gives 51% ownership of the business to his wife, even though she is not actually involved. 

There are no requirements regarding size of business or length of time in business to obtain certification. However, if your business is less than a year old, you might want to wait to apply for certification, because you will need to provide profit and loss statements, a balance sheet and your business’s prior year’s tax returns to help prove the business is actually women-owned and -operated. 

In addition to these financial documents, you’ll also need to provide:

  • Identification such as a birth certificate or passport
  • Business plans
  • Corporate documents
  • Business licenses and permits
  • Bank account information
  • References from key clients and customers

Depending on which organization is certifying your business, an on-site visit may be necessary. For example, the WBENC requires an on-site visit as part of your initial application and then every three years thereafter as part of the recertification process. (You won’t be taken by surprise: All site visits are scheduled with the business owner in advance.)

Although it is possible to self-certify online at Certify.SBA.gov, it can be less time-consuming to get certified by one of these third parties, since they take care of the nitty gritty details for you. 

Once you’re certified, it’s time to get busy announcing your new status to the world. Promote your certification on your website and in your marketing materials, take part in events held by your certifying organization, and register with FedBizOps.gov to get your business noticed by federal government agencies looking for certified women-owned businesses. 

The S Corp Election Deadline is March 15th. What you need to know. by @CorpNetNellie

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by Nellie Akalp

Your LLC or corporation could receive better tax benefits by electing to file as an S Corp. However, with the March 15, 2019 deadline quickly approaching, if you want to be taxed as an S Corp for the 2019 tax year, here’s what you need to know.

S Corp 101

S Corps choose to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S Corps then report the income and losses on their personal tax returns, so they’re taxed at their individual income tax rates. You would elect the S Corp structure in order to avoid double taxation on the corporate income. 

To qualify for S Corp status, your business must meet the following requirements:

  • Be a domestic corporation
  • Have only allowable shareholders
  • May be individuals, certain trusts, and estates and
  • May not be partnerships, corporations or non-resident alien shareholders
  • Have no more than 100 shareholders
  • Have only one class of stock

Because the S Corp isn’t a legal business entity type, just a special election for tax purposes, an S Corp still offers you personal protection from liabilities of debt or lawsuits.

S Corps have some other advantages, such as:

  • They are only required to file once a year 
  • They are not subject to the double taxation of income (once as corporate income and once as dividends)
  • They can sell shares of stock, and 
  • They have perpetual existence, meaning the business continues to exist even if the owner leaves or dies. 

The expenses and paperwork are the same as corporations, such as filing deadlines and expenses related to incorporating and annual fees. You should also consider the limitations on shareholders and stock. Since S Corps are allowed to issue only one class of stock and are limited to 100 shareholders who must be either citizens or permanent residents of the U.S., it may limit your ability to raise capital for the business.

Be forewarned, S Corps tend to attract the attention of the IRS, especially when it comes to salaries and dividend payments to shareholders. If you make any mistakes regarding the filing requirements, you could lose the status of being an S Corp. 

Deadline Approaches

March 15, 2019 is the deadline to file IRS Form 2553 with the IRS to elect S Corporation status for this tax year and future tax years. If you don’t make the March 15 deadline, your business will remain being taxed as a C Corp for the current tax year, and then your S Corp election will be effective for next tax year. 

It is possible to file an extension for S Corp status (IRS Form 7004), but that doesn’t extend shareholders tax deadline which remains April 15. Once the S Corp form has been elected, your company must continue to meet ongoing filing requirements, such as:  

  • Reporting all financial activity on Form 1120S and attaching a Schedule K-1 for each shareholder
  • Withholding federal income tax, Social Security and Medicare taxes from employees’ paychecks (if the company has employees) 
  • Filing IRS Form 941 each quarter to report these withholdings. The form is due four times a year: January 31, April 30, July 31 and October 31. 
  • Filing a Federal Unemployment Tax Return each year using IRS Form 940

Be sure not to miss any filing dates, or you’ll receive a hefty penalty. You could get a pass on paying the penalties if you can show the IRS the failure to file on time was due to a “reasonable cause.” Merely, a lack of funds is not a reasonable cause for failure to file or pay on time. However, the reasons for the lack of funds may be okay.

According to the IRS, reasonable cause is based on all the facts and circumstances in the company’s situation. If your company used all “ordinary business care and prudence” to meet your federal tax obligations, but were unable to do so, this will be considered reasonable cause. Situations such as fire, casualty, natural disasters, the inability to obtain records or death, serious illness, or incapacitation of the taxpayer or a member of the taxpayer’s immediate family would meet the criteria.

Talk to your accountant to see if the S Corp election is a smart choice for your business and then let CorpNet take care of the filing for you.

Do People Take Your Business Seriously? by @CorpNetNellie

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by Nellie Akalp

The numbers are impressive: more than 11.6 million U.S. firms are owned by women, employing nearly 9 million people and generating $1.7 trillion in sales as of 2017. Want more? According to the National Association of Women Business Owners (NAWBO) study cited earlier, one in five firms with revenue of $1 million or more is woman-owned. So why do women business owners still sometimes feel like their businesses are not always taken seriously? 

Maybe because it’s true. A recent Freshbooks study found women business owners pay themselves an average of 28% less than their male counterparts. That’s due in part to 1) having to charge less than their male counterparts in order to attract customers and 2) not being taken as seriously as their male peers.

No matter what your industry, as a woman entrepreneur you’re going to face challenges your male peers will not. A 99 Designs survey found that although men and women may approach business in the same way, the results are often not the same—especially when it comes to funding. Men are twice as likely to raise at least $100K or more in funding than women, the survey found. Less funding means less ability to hire and grow. 

Most women entrepreneurs know they have to work harder to get clients, at least at the outset. But there are other tactics I’ve used in the past to make sure my male peers know that my business and I deserve respect.

  1. Change the language. Have you ever been overlooked or ignored in a meeting? In any group discussion, there are social dynamics determining who is being listened to and who is being shut out. Men have no problem being overbearing and loud to get attention, but if a woman acts the same way, she’s perceived as bossy and presumptuous. Try changing the way you speak to be more assertive. Use phrases such as “I strongly recommend…” and “My plan is …” to get noticed for what you say and not how you say it.
  2. Create valuable connections. It’s always been true in business: It’s not what you know but who you know. Making the right connections and turning those connections into referrals is a great way to overcome any barriers to being taken seriously. Having others vouch for your work can have a huge influence on getting new clients. Actively seek out valuable connections by joining trade groups, attending networking events and asking for introductions. Join women’s groups like NAWBO and Women’s Business Enterprise (WBENC). Chances are you’ll meet someone who knows the buyer you want to meet with. The more connections you make in your industry, the better chance you have of finding the people who can help you succeed.
  3. Own your accomplishments. In general, men and women start businesses in the same industries (with the exception of the arts and healthcare, which are primarily women-owned and run). Therefore, there’s no reason you shouldn’t shout your successes every chance you get. Besides marketing your business to the hilt, it’s important to become a prominent name in your field. Today it’s crucial to be knowledgeable about and visible on social media. Figure out which platforms most of your customers are on and get in their feeds. You can also reach out to social media influencers (people with a large number of followers) and offer to share your expertise with their audience. Market yourself to podcasters as an interview subject or panel guest; record webinars for your website and other websites. 

Remember, you are your business’s best spokesperson. Getting your face, your ideas and your knowledge out in public will go a long way to help your business be taken seriously.

Why Hiring Working Mothers Benefits Your Business by @CorpNetNellie

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by Nellie Akalp

Being a working mom myself, I understand the highs and lows of trying to balance a career and a family. I have four children and own a business with my husband, so I know how hard it is to do your best at work and do your best at home and still have time left over for a little “me” time. I also know the rewards I get being able to have both family and work in my life and how being a mom actually benefits my business, so I have no problem offering the same opportunity to other working moms. Here’s why hiring mothers benefits your business:

Moms are Motivated

If a mom is applying for a position in your company, you can infer a few possible scenarios: 

  1. She is passionate about your company and/or her field of work.
  2. She wants to be part of a team.
  3. She prefers working to being a stay-at-home mom or is ready to go back to work after her stay-at-home phase has ended.
  4. She needs or wants the salary.
  5. She needs or wants the benefits.

It could be something completely different, but if she’s applying to work for your company you know she’s ready to add more to her plate—which brings me to my next point. 

Moms are Organized Multitaskers

Raising children is a challenge on its own. Add a job into the mix and you have a potential superwoman coming to work for you. Kids’ schedules vary, from school drop off and pickup to sports practices to homework help, not to mention household duties such as cooking, cleaning, paying bills, etc. To get it all done, any mom—whether she works outside the home or not—has to be an efficient, well-organized master of multitasking. You can feel confident a mom can handle anything you throw at her.

Moms Have “Mom Brain”

Mom brain is real and according to a scientific study reported by the Greater Good Science Center at UC Berkeley, that’s good news for your business. The study found pregnant women experience a loss of gray matter in the brain which causes the brain to become “more efficient and refined, in a process associated with healthy cognitive and emotional development.” In other words, a mother’s brain is especially adept at figuring out what other people need and feel. That makes moms a great fit for positions in sales, customer service, management or any role that requires people skills. 

What Working Moms Want

In case you’re worried about time restraints of hiring a working mom, you need to remember she will be concerned as well. More than anything else, the biggest benefit you can offer to a working mom employee is flex time. Flex time could mean flexible hours or flexible work environments (meaning the ability to work from home). Every working mother needs to balance caregiving and work responsibilities. Giving a mom some flexibility shows you trust her to get her work done—even if it’s on a different schedule than the standard 9-to-5. 

If the job has set deadlines or schedules that change, give working moms as much notice as you can so they can adjust accordingly. Does your company have childcare on site? If you don’t there are still ways you can ensure a working mother gets the help she needs. You can offer flex spending accounts for child care expenses, later start times for moms who need to make school drop offs, or early outs for school pickup. If you have other working moms on your staff, you can put together a list of other helpful resources in the area such as after-school daycare facilities.

Interviewing Mothers

Interviews are a two-way street. You want to know if being a mother will hamper the employee in doing their job; the potential employee wants to know if you’re running a family-friendly company. She may ask you about your company culture or how people get promoted. 

On your end, you are limited by the U.S. Equal Employment Opportunity Commission (EEOC) laws on what you can and can’t ask during a job interview. This prohibits asking job candidates about their marital status, if they’re pregnant or plan to get pregnant, or how many children they have. Stay away from any questions about childcare or spouses, too. Instead, you can ask if the candidate has any time limitations (for example, “Would you be able to work weekends?”), whether she would be able to travel for work on short notice, and other questions that are relevant to the job duties.  

Most likely the job applicant will offer information about her family during the interview. You might even find out she’s looking forward to spending time in an office or the opportunity to travel for work. Most working moms I know (myself included) treasure any kid-free hours spent away from home. 

By making an effort to hire moms and make them happy working at your business, you’ll earn their gratitude and loyalty. Working mothers are motivated to succeed in everything they do, including making your company the best it can be.

My Biggest Startup Mistake by @CorpNetNellie

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by Nellie Akalp

All small business owners make mistakes—and that’s a good thing. It means we’re taking risks, and that’s how we grow our businesses. But making too many mistakes during the startup phase could lead to business failure. The key to small business survival is to learn from your mistakes as well as those you see other businesses making. 

After selling my first business, my entrepreneurial synapses were firing a mile a minute with new ideas, and I was eager to start another business. My biggest startup mistake in starting my second company was thinking that if I approached the new business in the same manner I did my first company, I would hit the jackpot again. After all, I had been successful once, so I figured I could make it happen again by taking the same steps. 

Boy, was I wrong.

I quickly learned that in the years between my two startups, times had changed and the business landscape was different. The way I started my first company wouldn’t work for the second. For one thing, consumers were much more experienced about online purchases. Expectations for what you could achieve online were higher; you couldn’t just create a website and watch the business flow in. I had so much to learn about website development, SEO and more. Plus, clients were more knowledgeable about what they needed, so I had to step up our game.

The competition had changed, too. More and more companies were pulling in traffic using bait-and-switch techniques such as offering free services and then upselling. I knew I needed to change my business model immediately. I started from the ground up, improved the product, and marketed both digitally and face-to-face. By taking a different approach, I found success once again—but it required a new road map. 

Common Startup Mistakes

Here are a few more startup mistakes that other entrepreneurs I know have made and learned from:

  • Pricing: When it comes to pricing, service businesses have it a little tougher. They don’t have a clear-cut cost of goods sold, and it’s easy to underestimate the time a job will take. Your industry association can help you determine average prices for your type of business, clientele and location. 
  • Contracts: Contracts or letters of agreement (LOAs) are there to protect you. Never start work for a customer before you spell out each side’s expectations, establish deadlines and payment schedules, decide how you’ll handle disputes and more. 
  • Social media: Are you checking all your social networking platforms to establish relationships and answer customers’ questions? According to Social Media Today, 84 percent of consumers expect companies to respond to their posts on social media within 24 hours, while 72 percent of Twitter complainants expect a response within an hour. (One hour!)
  • Business entity: Choosing the wrong business structure for your company can affect the amount of taxes you pay, how much paperwork you need to deal with, and whether your personal assets are protected in case of a lawsuit. The three most common types of business structures are the sole proprietorship, the LLC (Limited Liability Company), and the C corporation. 
  • Hiring: Are you waiting to hire until business picks up, or do you have issues delegating? Either way, waiting too long to hire can prevent your startup from growing. Try outsourcing to a freelancer/independent contractor when starting, or investigate internship programs in your community. If you can use a virtual worker, check out resources like Upwork and Internships.com to get started finding good candidates.

As always, starting a second business was quite the learning experience and one of the crucial lessons I learned was how to be flexible. When the market changed, my old business plan had to be thrown out the window and rewritten to reflect the new landscape. I might be on Plan B (or C) but I’m still running my business—and it’s successful.

What are some startup mistakes you’ve had to overcome? I’d love to hear about them. Please share below.