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Why Does My Business Need State Unemployment Insurance? by @DeborahSweeney

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Small businesses have no shortage of items to check off their initial to-do list. The journey begins once they have incorporated or formed an LLC. Then, they must look into registering trademarks, obtaining employer identification numbers (EINs), and getting relevant business licenses. Filing for state unemployment insurance might be a little further down that list, but that doesn’t mean small businesses should put off obtaining it.

However, if you don’t understand why businesses needs state unemployment insurance you might be less inclined to prioritize its filing. Let’s take a closer look at how SUI aids to small business growth.

What Is State Unemployment Insurance (SUI)?

Do you plan to hire employees to work for your business? Have you already hired employees at your profitable startup? Then you’ll need to file for state unemployment insurance, ASAP.

State unemployment insurance (often abbreviated as SUI) is an employer-funded tax program. SUI works to protect workers that find themselves involuntarily employed. Some examples of involuntary employment include the following scenarios:

  • Being laid off.
  • Being fired for reasons other than misconduct.
  • Being let go from a position due to health or personal problems.

Generally, the worker is at no fault for this type of employment. As the worker looks for new jobs, SUI provides them with short-term benefits through unemployment compensation.

Who Pays For Unemployment Insurance?

Earlier, I mentioned profitable businesses that plan to hire or have hired employees need to file for SUI withholding. Employers that have paid an employee more than $300 in wages are responsible for paying their state unemployment insurance.

It’s also not possible to avoid making these payments. Employers must submit their tax reports or tax and wage reports on a quarterly basis. What if your business has no paid employees during that quarter? You’re still required to submit the documents, and pay unemployment taxes on the employee’s state wages.

Do Self-Employed Entrepreneurs Need SUI?

Good question! Self-employed workers that have incorporated as a corporation or formed an LLC may pay themselves as an employee of the business. Others, like sole proprietors, may consider purchasing unemployment insurance as an additional safety net.

It’s recommended that you check in with your local Secretary of State before making any snap decisions. You can ask questions and learn more about the different laws related to the program.

How Much Will This Cost?

Paying for state unemployment insurance is not a one-size-fits-all situation across every state. SUI is run on a hybrid state-federal system where rates and maximum taxable wages are subject to change yearly. What employers pay in SUI withholding this year may not be the exact same as it was last year.

However, there is generally a state maximum wage up to which employers pay unemployment insurance. While they’ll report the full amount the employee made in their tax and wage reports, they will not need to exceed payments past that mark.

Because rates do fluctuate each year, it may be difficult to calculate rates for unemployment insurance. If you find this to be the case with your business, check in with the state for more information on their rate calculation process.

Should You Do SUI Withholding Yourself?

It is possible that entrepreneurs can maintain their own SUI withholding. More often than not, however, they tend to utilize the assistance of a third party filing service. They may choose this option based on the following reasons:

  • Maintaining SUI administration is a big responsibility. If you fail to maintain paperwork or respond to unemployment claims on time, your business could face expensive penalties.
  • SUI withholding is a time consuming process to keep up with in addition to day-to-day responsibilities.
  • Businesses that have frequent unemployment claims filed and associated with their companies face an increased tax rate. This could make for more complicated paperwork — and even more time and energy spent on it.

Luckily, there are plenty of professionals that can assist entrepreneurs with SUI filing services. Best of all, when you work with a professional you maintain a bit of peace of mind. Your business has not fallen out of compliance, and is on top of it when it comes to maintaining unemployment insurance.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

As CEO of MyCorporation Business Services, Inc., Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

Angel Investors In America: 3 Facts Entrepreneurs Should Know About These Financers by @DeborahSweeney

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You may already know the definition of an angel investor. This is an individual who invests in a startup using a portion of their existing finances. Chances are you may also be familiar with an angel investor’s involvement with a business, too. Most investors, once they have provided a startup with funding, require a stake in the company in exchange. Typically, this stake translates to shares or an equity position.

What you may not realize — or even think about — are the angel investors themselves. Who are these people? According to the Angel Capital Association’s initiative The American Angel Campaign, angel investors invest an estimated $25 Billion in 71,000 startup deals every year. Yet we know very little about these existing angels, or emerging angels. Luckily, research has been conducted and provided through The American Angel Campaign. Their first in-depth report explores what it means to be an angel investor in the United States. Let’s take a look at some of its key findings.

30% of new angels are women.

It’s not exactly a shock to find out that the vast majority of angel investors are men. More women, however, are taking on investor roles. Today, 22.1% of angels are female. 30% of new angels are also women.

While this number may be small for now, it is mighty. Angel investors are more diverse than venture capitalists where studies have shown only 9% of decision-makers at VCs are women. Furthermore, 38% of women entrepreneurs that raised outside capital have specifically wanted to work with women investors. It’s not likely that female angel investors will explode in expansion overnight, but it is likely that as time progresses more women will assume this role and invest in businesses.

Angels are educated, and tend to come from entrepreneurial backgrounds.

Naturally, most entrepreneurs reach out to angel investors for financing purposes. It also helps that the angel has an entrepreneurial background — or at least an understanding of business. 72.8% of the angel investors surveyed in report revealed they hold more than a Bachelor’s Degree. 51% have achieved a Master’s or MBA. At a whopping 57%, business is also stated to be their primary area of study.

Beyond school, the vast majority of angels have also held prominent leadership roles. The five most common careers included CEO of a startup (55%), for-profit company executive (55%), consultant (48%), for-profit company board member (46%), and middle management roles (38%).

There is a lovely line in the report that the angels surveyed are, essentially, “founders funding founders.” They might hail from various industries, but they understand the fundamentals of business and have held leadership roles. This makes them all the more valuable to work alongside bright-eyed startup business owners. Over time, they may even be able to build up a mentor-mentee relationship with their investor. For now, startups have the peace of mind in knowing they are working with accomplished individuals.

Many angels do not live in major cities.

We often assume that in order to get an angel investor’s attention, one needs to live or have a business in New York or California. However, 63% of angels surveyed in the study don’t live in New York City, San Francisco, or Boston. The greatest percentage of angel investors, 16.2% surveyed, reside in one of the Great Lakes states. These include Illinois, Wisconsin, Indiana, Ohio, and Michigan, as noted in their infographic.

Location may play a role in the size of checks written, too. The report reveals that angels outside of New York, California, and New England actually write larger checks compared to angels residing in these states. The median size check for New York, California, and New England is $32,432. Other geographic areas enjoy a bit of a bump — $36,920 — with their checks.

What does this mean for entrepreneurs? The report suggests that it may be beneficial to startups to seek funding beyond states traditionally associated with angel investments. However, it also states that the median check size is $25,000 across the United States. Angel investors, unlike venture capitalists, cannot invest millions into a small business. It’s important that you determine your financing needs and thoroughly understand where the money will go before approaching an angel investor. If you know you need more than what they can provide, a venture capitalist, or perhaps even a small business loan, may be a better fit.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

As CEO of MyCorporation Business Services, Inc., Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

What “The Four Agreements” Can Teach Entrepreneurs About Running a Business by @DeborahSweeney

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What book would you make required reading for everyone on Earth? That’s the question posed by the July/August 2018 issue of The Atlantic, which drew on answers from a wide variety of sources including literary critics, film directors, and published authors. One author, Imbolo Mbue, recommended “The Four Agreements” by Don Miguel Ruiz.

Published in 1997, Ruiz drew upon the personal conduct codes learned from his Toltec ancestors in his book that serves as a practical guide to personal freedom. There are four specific agreements that, once followed, allow us to obtain personal freedom from beliefs we make with ourselves. These agreements can resonate with anyone reading this book, but I’d like to think it would hit home for entrepreneurs especially and provide a little extra insight into how to run a small business.

1. “Be impeccable with your word.”

More often than not we are messy, not impeccable, with our words. Entrepreneurs don’t always have the luxury of treating every word with care. They must be responsive to emails, text messages, and phone calls, and meetings and attend to the needs of everyone surrounding them from employees to customers at all times. Sometimes words are too much and we are left with only consonants — replying to an employee text with “K.”

Entrepreneurs are always encouraged to be the best version of their selves and bring their A game to their small business, so why not push to be better with our words? Whether spoken aloud or written down, the key is to pause and think before you express anything. By being impeccable with your word, which should be optimistic and thoughtful, you are able to create a domino effect where your words are able to positively impact others.

2. “Don’t take anything personally.”

This is a difficult agreement to follow because everyone, entrepreneur or not, has had a moment in their life where they have taken an insult (whether direct or indirect) too personally. Maybe someone tweeted a rude comment to the company Twitter account, a customer complaint was posted on Yelp, or you overheard someone gossiping about you.

However, Ruiz argues that no matter what happens around you or seems to be about you, it really has nothing to do with you. By taking something personally, Ruiz says, we are superimposing our worlds onto others and assuming that everyone else knows what’s happening in our world. The reality is that they don’t. Nobody does! It’s hard to do, but when entrepreneurs don’t take things personally we are unable to become prey to predatory thoughts that want us to become vulnerable. We learn to trust ourselves instead and that trust developed within allows us to go the extra mile forward.

3. “Don’t make assumptions.”

When has making an assumption been a good thing for anyone? The trouble with assumptions, as Ruiz points out, is that we think they are the truth. Rather than ask for somebody to better clarify it for us, we just assume that it’s true because if someone says it is then it must be… right? Rather than make an assumption about anything, entrepreneurs should go straight to the source and clarify the answer from the beginning. The sooner this is done, the better, to avoid any confusion later on down the line.

4. “Always do your best.”

One of the most fascinating aspects to “doing our best” that Ruiz expresses is that it changes from moment to moment. Entrepreneurs tend to look at what they did when they first started their business and often wish they could go back. They might have done things a little bit better, if they knew what they know now.

Or would things really have been done “better” in the past, if you knew what you do now? Wouldn’t going back and redoing things to be perfect mean that we missed out on opportunities for trial and error? To make mistakes, take risks, and learn from those things that did not go according to plan? Truthfully speaking, sometimes all we have this is moment and our existing circumstances to work with in order to do our best. If we do great work in the here and now, we can be content with knowing later on that we did do well with what we had and where we were in our entrepreneurial journey.

How to Properly Hire Your First Employee by @DeborahSweeney

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The United States economy is currently enjoying “a hiring spree,” according to a recent report from The Washington Post. 223,000 jobs were added in May 2018, allowing the unemployment rate to fall to 3.8 percent which is the lowest it has been since 2000.

As more jobs continue to be added and businesses make the decision to bring on full-time employees, entrepreneurs that have never hired before may be curious about the legal requirements necessary for hiring new team members. If you’re planning to hire your first employee, here’s a look at the documents and records you’ll need to ensure a smooth — and compliant — process.

1. File for an Employer Identification Number.

An Employer Identification Number, or EIN, is a federal tax ID issued by the IRS to uniquely identify employer tax accounts. If your business wants to hire employees, you’ll need to file for an EIN first. Outside of hiring employees, you’ll also need to file for an EIN if you plan to open a business bank account, change your organization type, or establish a credit profile.

2. File Form I-9.

According to the U.S. Citizenship and Immigration Services, Form I-9 is used to verify the identity and  employment authorization of your employee’s eligibility to work in the United States. U.S. employers are required to complete this form, along with employees (including citizens and noncitizens), for each hired individual. Once the form has been completed, employers must keep it on file for each person on their payroll who was required to complete it. It is not to be filed with the U.S. Citizenship and Immigration Services (USCIS).

3. Begin withholding taxes.

Once you, the employer, have decided to hire an employee with the intention of paying them, you are required by the IRS to withhold their income, Social Security, and Medicare taxes. New employees must complete and return to their employer Form W-4 Employee’s Withholding Allowance Certificate in order to have federal income taxes withheld. Form W-2 withholds federal Social Security and Medicare taxes and is completed by the employer. There may be additional state forms to complete as well, which may differ depending on your state’s tax regulations. During this time, you may consider whether you will administer payroll in-house or by using an external service.

4. Report new hires to the state.

Once an employer has hired a new employee, they must report that information to the state. Each state will vary in their reporting requirements, but don’t worry — it’s not meant to be an intimidating process.

Let’s use the state of California where my business is an employer, for example. If I hired any new employees who work in California, I would need to report that information to the New Employee Registry within 20 days of their start-of-work date. I can send the report electronically or through the mail. The only situation where I would not need to submit a report is if I did not hire any new employees.

5. Create compensation plans and obtain workers’ compensation insurance.

There are several compensation plans every business will need to create for its team. Let’s take a moment to explore the required ones.

  • Workers’ compensation insurance is required in the event that an employee suffers an injury or unforeseen circumstance on the job. Employers can obtain this insurance through their state’s workers’ compensation program or through a third party provider.
  • Disability insurance, which is required in California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico.
  • You may register for unemployment insurance with your state workforce agency.
  • Leave benefits, outside of the Family and Medical Leave Act (FMLA), may be optional, but are worth discussing additional options with your employees.

For brick and mortar storefronts or offices, remember that you will be required to post OSHA workplace posters in a conspicuous place where all workers are able to see it. If you don’t already have one, you may order a print copy online or on the phone or download it from the OSHA website.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney HeadshotAs CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

Self-Employed or in the Gig Economy? Why the Difference Matters for Taxes by @DeborahSweeney

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Unless you happen to fall into one of the two categories, you may not know the difference between self-employed professionals and gig economy workers. According to the Second Annual Self-Employment Report released by accounting software company FreshBooks, these two groups are often categorized as a single entity despite their differences. Self-employed professionals are defined as having a primary income that comes from independent, client based work. Members of the gig economy, on the other hand, work side gigs such as rideshare driving or freelance writing in addition to maintaining a traditional full-time job. Their primary source of income is the paycheck from their full-time position, with side hustles bringing in a little extra money.

With 27 million Americans estimated to exit traditional employment for self-employment by 2020, defining the difference between the two groups has become crucial for tax purposes. As you work on filing tax returns, here are the key areas for both self-employed professionals and gig economy workers to keep in mind.

Make sure you have been properly classified

Both self-employed and gig economy professionals must be properly classified for the services that they provided. The IRS states that business owners must correctly determine if these individuals are employees or independent contractors (AKA self-employed).

Self-employed individuals are in business for their own self and therefore do not have businesses that withhold or pay their taxes. Businesses that work with gig economy professionals use common law rules to determine if these workers are employees or independent contractors. The major three factors are behavioral (control, or not, as to how the worker does their job), financial (if there are business aspects of the worker’s job controlled by the payer), and their relationship type (such as written contracts).

Once these three factors have been examined, businesses will have contractors complete and file the appropriate forms like Form W-9 or Form 1099-MISC to pay their associated taxes.

Determine if you will need to pay estimated taxes

Paying estimated taxes is a tax strategy that self-employed professionals and members of the gig economy may consider doing, if they haven’t started already. Estimated tax payments are used by taxpayers to pay income and self-employment taxes. These quarterly payments are due on the 15th of April, June, September, and January.

If you do decide to start making estimated tax payments, remember that your payments must be made in full and on time. Failure to do so may result in being charged a penalty for underpaid taxes.

How are your records looking?

One of the most strategic moves that anyone, self-employed, in the gig economy, or an employee, can do when filing their tax returns is to keep their paperwork organized. Who did you work for or complete work throughout the year? Did you receive all of your necessary tax forms or are you still waiting on a few? What about deductions? Do you have your receipts handy for business expenses you can deduct? Establish a solid recordkeeping system for every year that you are self-employed or a member of the gig economy and keep it as up-to-date as possible. Doing this allows you to document and track your income and expenses and can come in quite handy if you need to provide proof of your professional activities within a specified timespan.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney HeadshotAs CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

3 Traits to Look For in a Great Business Partner by @DeborahSweeney

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The business world was rocked to the core on January 30th when three corporations — Amazon, Berkshire Hathaway, and JPMorgan Chase — announced they were partnering together to form an independent health care company for their U.S. employees. While the initiative is still in its early stages (so early that nobody knows exactly what it will disrupt just yet), the announcement from the trio caused stocks to tumble for major health care companies with the world breathlessly watching. Change is coming — and if it’s successful, it could forever alter traditional health care business models.

From a personal standpoint, I believe that these three companies and their CEOs — Jeff Bezos, Warren E. Buffett, and Jamie Dimon, respectively — have all of the right characteristics necessary for a strong business partnership. If your own business is looking to partner with another like-minded company this year, look to their example for the following traits to ensure a mutually beneficial partnership.

1. Look for the ones that get things done.

Could there be any bigger power players in the game right now than these three companies? Each CEO runs a major corporation that employs hundreds of thousands of employees in the United States. Moreover, none of them have never been content to sit on their laurels and coast when it comes to business. They’re natural born disruptors. Each business has taken on various initiatives over the decades to expand, grow, and evolve to fit into the changing times and further benefit the lives of consumers.

When partnering with another company or entrepreneur, seek out those that let their work speak for them. Look for great work ethics that consistently show signs of innovation. Whatever you have a slight weakness in, make sure that area is a strength for them and vice versa so you can help build one another up.

2. Seek out partners that are on the same page as you.

You don’t have to come from the same industry background in order to partner together. Amazon is rooted in logistics and technology with Berkshire Hathaway focused on insurance and JPMorgan Chase in finance. Despite their industry differences, Bezos, Buffett, and Dimon all share the same interests. They are motivated to take on healthcare and its existing challenges to establish a more efficient system, benefit employees, and aid to the overall economy.

In order for a partnership to be successful, it’s key that each partner shares the same values. That sense of equal engagement can be used to create a strong balance. You run across businesses that want to partner together but are unwilling to do their share of the work, which doesn’t make it fair for everyone else. The best partnerships have partners on the same page as one another and balance out responsibilities for each individual.

3. Work with partners that have a positive attitude.

I mulled over several other traits for my third bullet point, but at the end of the day positivity wins. It’s okay not to have a paved road ahead in your partnership. Bezos, Buffett, and Dimon have all acknowledged that what they are doing is not easy and that none of them have all of the answers. But, they are also not willing to accept the existing system either and are putting their resources to work in working together to create a new solution.

This sounds like optimism to me! I firmly believe that change begins with your attitude and that positive behavior is contagious. It will reflect on you, your personality, team, and the company you own as well as attract partners with a like-minded mindset. Look for optimistic partners — you’re in this partnership for the long run and a great attitude will help get you (and your partners) everywhere.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney HeadshotAs CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

Why Entrepreneurs Should Form a B Corp in 2018 by @DeborahSweeney

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This year, I started a series on my company’s blog where I interviewed proud owners of B Corporations. If you’re not familiar with the entity, B Corps are for-profit companies. They are certified by B Lab and encourage entrepreneurs to give back to business and society. They must also meet standards of social and environmental performance, accountability, and transparency in order to be a part of the B Corp community.

All throughout 2017, these small business owners shared why they believe that B Corps are the future of business. Some said that by being a B Corp, they were helping to inspire the next generation to keep paying it forward and make a difference. Others noted that not everyone runs a business just to make money, but rather to build something that leaves the world in a better place. The growing realization was that it’s impossible to expect everyone else to solve the world’s problems. What matters are our own everyday actions and how entrepreneurs take action to “B the Change.”

Warming up to the idea of forming a B Corp in 2018? Here’s a look at even more benefits this business structure offers entrepreneurs.

The certification process is not meant to be intimidating  

Incorporating a business as an LLC or Corporation is a process that requires time, energy, and paperwork. B Corporations operate a bit differently. The B Corp entity is a bit of a hybrid between a standard corporation and nonprofit. Before you can file as one, you must first meet performance requirements that show how you will commit to benefitting the public. Otherwise, the legal structure won’t be able to stay in compliance.

The one thing nobody tells you about this formation? It only takes three steps to become a B Corp.

  • Meet performance requirement. This means completing the B Impact Assessment with a minimum of 80 out of 200 points required as a passing grade.
  • Meet legal requirement. This works to legally protect your mission and bake sustainability into the DNA of your company as it grows. There is a process before certification and after — here’s what to expect in the “before” part.
  • In order to meet the legal certification requirement for your state of incorporation and corporate structure, decide if it’s necessary to adopt a benefit corporation status or amend governing documents.
  • For legal changes made, communicate with board members and legal counsel about how this shift is useful and if there will be any implications for adopting said changes. If you struggle to answer questions, B Corporation put together a helpful FAQ sheet for investors and directors of potential B Corps to download and review.

After certification, everything becomes more streamlined. Entrepreneurs will need to obtain the board approval of their planned amendment as well as shareholder approval of the board-approved amendment. If a corporation, it is recommended that amended articles are filed with your Secretary of State within one year.

You’re surrounded by a like-minded community

B Corps may be a global force disrupting the industry for social good, but sometimes it can feel like your business is all alone. Where’s your B Corp tribe at, anyway?

If you’re ever curious about the B Corps in your city or state, you can find a B Corp through B Corporation’s search engine tool. There is also a special event called the B Corp Champions Retreat which encourages attendees to come together and meet with those in the B Corp community. Held every year, this getaway celebrates the movement’s growth and success of those that have made significant strides. The retreat also goes global too, hosted by a different city every year from Toronto to Philadelphia.

B Corps attract talented employees

As reported by the 2017 American Express OPEN Small Business Monitor, one of the biggest challenges small business owners faced this year was finding and hiring talent.

Here’s where B Corps get to flex their social good muscle to draw in experienced team members. According to the Harvard Business Review, millennials seek out work that connects to a larger purpose. This same age group makes up 50% of the existing workforce. Enter the certified B Corporation, which is transparent and driven by its mission and values to do good, all of which attracts talent to reach out, connect, and apply for jobs there.

For the business, this gives them talented employees all passionate about the company and for employees it provides an invaluable opportunity to make a difference within their career. It’s a win-win for everyone involved.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney HeadshotAs CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

The Best Business Advice for College Entrepreneurs by @DeborahSweeney

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When I think back to my college years, I had no way of knowing that I was ultimately bound for entrepreneurship. Back then, I was a cheerleader who studied law. My dream was to be a lawyer — and a Laker girl if I could pull off dual careers. Little did I know that years after I graduated, I would be presented with the opportunity to buy a business and become my own boss. I’m an entrepreneur now and I love it!

That being said, there are certain pieces of business advice I wish I had heard in college. If I could go back in time, I would sit my younger self down and share some of this wisdom with her. Although I may not have a time machine handy for that kind of thing, I can at least pass along these valuable tips to the next generation of millennial college entrepreneurs.

Think it over before responding to anything significant

I know that you’re thinking. We live in a world where we’re expected to be “on” and responsive at all times with email, text messages, and tweets. Why should anyone take a moment to think it over before hitting reply?

As an entrepreneur, you’ll need to make significant decisions both good and bad which can range from anything to a potential partnership to an interview feature on a major website. Instead of making hasty decisions, think for at least an hour before responding back. If it’s really significant, you might even want to sleep on it. Think things through first and remember that nothing needs to be answered right away. The opportunity can wait and with a clearer mind, you’ll have a better outcome.

“Lead from within, not from out front”

This has long been one of my favorite pieces of advice on how to control a business without being controlling. There’s a reason why startups are initially referred to as babies. You spend all of your time with them and can’t imagine allowing anyone else to take over.

Eventually though, babies grow up. And when they do, there are more responsibilities added to the mix. If you try to continue doing everything by yourself, you’ll eventually burn out. Whenever the time comes for you to hire your first employee, think strategically and take the process seriously. Surround yourself with a strong team that empowers your business and that you trust to keep the ship smoothly sailing without you at the helm.

Be positive

“All I ask of you is one thing: please don’t be cynical. I hate cynicism — it’s my least favorite quality and it doesn’t lead anywhere. Nobody in life gets exactly what they thought they were going to get. But if you work really hard, and you’re kind, amazing things will happen.”

I’ve always loved this quote from Conan O’Brien and believe that it sums up the journey of life so well, whether your own path is entrepreneurial or not. Small business is full of ups and downs and learning how to weather the many storms you might be ready (or not) for. Keep working hard and maintaining a positive, can-do attitude in everything you approach. Trust me — it will pay off.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney HeadshotAs CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

4 Great Investments Small Business Owners Can Make With Their Tax Returns by @DeborahSweeney

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It’s the question on every entrepreneur’s mind when they receive their tax returns — what should you do with it and where do you spend the money? While this may be the fun upside to doing taxes, spending your return is a thoughtful process. Some small business owners may want to do it while others won’t or will consider going 50/50 on spending. If you haven’t decided what to do with your own yet, here are a few great investments entrepreneurs can make with their hard-earned chunk of change.

Put it in savings

We’re kicking off this listicle with the most responsible decision — and interestingly enough, the most popular one with taxpayers. According to the National Retail Federation’s Tax Returns Survey, 48% of Americans plan to tuck their returns into their savings in 2017, the second-highest number on record.

Why the push to save as opposed to spend? While this rise may be attributed to the millennial generation opting to be financially savvy, it’s also because only 66% of taxpayers profiled expected to receive a refund this year. And while saving isn’t as fun as spending, it’s actually incredibly beneficial for small business. A 2016 JPMorgan Chase Institute study revealed that most small businesses only have about a month’s worth of money on hand to cover expenses if inflows stop — and adding in a tax return is a great way to rebuild savings so your business isn’t living month to month.

Pay off debt

The second most popular spending option, 35.5% of Americans plan on using their tax returns to pay down debt. When you own a small business, eliminating debt is the best possible thing you can do for the company. Earlier this year, I shared some tips for paying off business debt including hanging on to receipts, cutting costs on everyday expenses like recycling and electric bills, and paying off debt using the Snowball and Stack Methods. The Snowball Method opts to pay off debt with the smallest balance first, gradually moving up the ladder, while the Stack Method starts with the biggest interest rate first and moves down to debt with smaller interest rates. Determine what the best method for your business is and begin paying down, and eventually off, debt accordingly.

Take a vacation

Alright, let’s get into some of the fun ways to treat yourself! 10.7% of Americans surveyed by NRF will be going on a vacation with their tax return this year. For small business owners especially, this is a great way to take some much-needed me time to rest and recharge. It’s also helpful for combating any possible burnout you feel might be on the horizon. All work and no play makes just about everyone very dull humans and getting the chance to get away allows entrepreneurs to come back stronger with a fresh perspective and better ideas.

Splurge on your work family and office

Can’t schedule a vacation right away? You might want to consider refreshing the workplace and treating your team instead. 7.6% of Americans will spend their return on a “splurge” purchase and you can do the same at the office too. Give your team small bonuses, invest in marketing or another department initiative that you have had on the back burner for a while, refresh the office with new furniture or computers, or throw a party to celebrate your team and all of their hard work!

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney HeadshotAs CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

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3 Myths About Outsourcing Payroll by @DeborahSweeney

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3 Myths About Outsourcing Payroll

by Deborah Sweeney | Featured Contributor

“I’m ready to outsource my payroll! Now what?”

If you recently made this statement, congratulations! As USA Today columnist Rhonda Abrams once famously put it, if you have one employee it’s time to get a payroll service. The benefits of outsourcing payroll are seemingly endless — no more bouncing the books around to employees to tackle, worrying that you might forget to file a quarterly report, or wasting time or energy figuring out finances when you could be focusing on growing your business.

However, not everyone is so quick to delegate these duties elsewhere. For as much good as a third-party service can do, there are still certain misconceptions that may make businesses wary about outsourcing this kind of confidential information, even to a trusted provider. Let’s debunk three of the most common ones.

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