Why Your Small Business is Just the Right Size

Why Your Small Business is Just the Right Size

Many business owners, who start small, dream of huge success and growth. However, higher profits and expansion do no mean the end of your small business status or the control you have over the product/service you set out to provide. With a broad definition and many variables, a small business may be classified as a company with under $7 million in sales and up to 500 or more employees. Basically, there is plenty of room to grow while remaining a small business. Choosing the best business structure is critical to the success of your small business regardless of your future goals. A small business attorney will help you with every aspect of your business formation and transformation. This post will discuss the benefits of being labeled “small” and review the most common types of business structure for small businesses.

3 Small Business Benefits

As a Small Business Owner, You Are in Good Company

According to the U.S. Census Bureau, there are nearly 30 million small businesses in America. In Colorado, small businesses make up 97 percent of all businesses. A Wall Street Journal article says “small business is big business,” citing that small business employs about half of the people in the workforce and accounts for 86 percent of companies with 500 or more employees. Technology has streamlined everything from bookkeeping and payroll to staffing and marketing, making it possible for small business owners to operate like big corporations. While hefty competition is viewed as a deterrent to some, others see marketplace opportunity and a culture of collaboration.

You Can Find Your Niche

The limitation in scope and reach for some small businesses lends itself to niche marketing. Your small business enables you to focus on a portion of the market that other businesses overlook. This gives you opportunities for specialization and integration into your community. As Denver has experienced an influx of migrating millennials, niche products and services are in demand more than ever. This is a generation that monitors and shares via social media on a daily basis and, in turn, shapes and influences where people shop, eat, and buy.

You are Creating Your Legacy

Perhaps this is why you started your small business – to not only provide for your family, but to leave something for them, whether it be the actual business or the values it embodied. Staying “small” can also afford you more time with the people who matter most and opportunities to engage with the community where you live and work.

Start your Small Business Right – Business Entity Formation

Each of the three most common business structures has its own characteristics and limitations, affecting your liability, taxes, and income. As these have been covered in previous blog posts, here is a brief review.

Sole Proprietorship

One of the most prevalent and simple business forms, a sole proprietorship is an unincorporated business owned by one person. This is an inexpensive and informal way to conduct a small business. A freelance photographer or someone who handcrafts jewelry, for example, would be considered sole proprietors. The main drawback is that you assume full personal liability for your business.

Partnership

When there are two or more partners who own the business, it is a partnership. This can be a husband and wife who share everything equally (general partnership), or it can be you and a friend who only contributes and receives partial profit (limited partnership). As with sole proprietorships, there is more flexibility and control than in a corporation as partners are able to define their relationship and roles. Partnerships, however, have more ability to raise capital than a proprietorship.

Corporation

A corporation is a legal entity that is independent of its owners and has its own legal rights. There are different types of corporations (C corp, S corp, B corp), and even a sole proprietor can incorporate. In a corporate limited liability, shareholders are only at risk for the amount of money or other investment they make in the corporation. Investors are willing to invest in a corporation more than any other type of business organization because of the ability to protect personal assets from the creditors of a corporation. There are restrictions associated with the different corporations, and not all small businesses qualify for each type.

Your Denver-based small business attorney will help you select the right structure for your small business today and ensure it is still working for you in the future. If you need help with your business formation, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

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Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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How to Start and Stay in the Retail Market

How to Start and Stay in the Retail Market

Starting your own retail store takes a lot of initial planning. There is so much more to it than simply choosing a place, setting up your goods, and opening your doors. After the early planning stages, it is hard work to stay at the top of the retail market. Denver has one of the most vibrant retail scenes in the nation with its lively downtown shopping district, strong regional anchors, and eclectic neighborhood businesses. So, where do you fit in and how do you stay in? A small business attorney will help you with every phase – from planning and daily operations to maintaining and expanding to helping you sell when the time is right – throughout the life of your retail business.

Start on Solid Ground

As a small business owner, you will hear again and again how crucial it is to choose the right legal structure for your retail store. Your business entity affects everything from the taxes you are required to pay to the permits and zoning laws that govern your business. Determining the right products and services as well as location are also business planning essentials. You may have a passion for your product, but you have to figure out how and where to sell it in order for it to be profitable and make sure you have the right market for the product you love. For instance, you may love meat and be the best butcher around, but a meat market in a highly vegetarian area is a recipe for disaster. Before you commit to a lease, consider if the ideal location for your product is ideal for your budget. Sometimes, second best is better. A great space that costs too much and causes you to close is a lot worse than a pretty good space that allows you to thrive. A business attorney can guide you through state and city laws as well as review and create contracts and agreements.

Establish Good Vendor/Wholesale Relationships

Once you have settled on the right product(s), it is time to find the right vendors. In order for your retail store to offer products at a price and time that suits your customers, you have to partner with vendors who understand your needs and vision. Communicate your goals and expectations at the start of the relationship. If your vendor knows that timing, cost, and consistency are important to your business, then they are likely to focus on those areas. Other areas to keep in mind when selecting a vendor include returns, defective items, credit, and payment terms among others.

Recruit the Best Employees

Hiring the best sales staff is just as essential to the success of your retail store as having the right product. With the influx of millennials who have migrated to Colorado in recent years, it may be more important to hire someone who fits the culture rather than someone with the highest qualifications. Cultural fit covers a variety of characteristics, including alignment of values, work-life balance, company mission, and customer relations. You may think a college degree is necessary, but someone who lives and breaths your products may put someone who doesn’t love your products but has a degree to shame. Once you have found the ideal staff, be sure to train them beyond their daily roles. You can avoid many costly mistakes and lost customers by ensuring your employees are well versed in your store’s policies and procedures. The better equipped they are to handle the unexpected or uncommon situation (and feel empowered to do so), the better customer service they will deliver. You may let them know that for repeat customers, they can offer an occasional small discount. Not only does this make your employee feel that you trust them, it allows your customers to feel your business appreciates them. Whether you need help hiring employees, drawing up their contracts, or [if things take a negative turn] letting them go, your small business attorney will be there.

Fine-Tune Your Marketing

Your marketing plan should be in place before you open your retail store. This should incorporate promotional, branding, and advertising ideas. Determining not only how your customers shop, but also where they dwell (e.g. social media), will point to where your marketing budget should be spent. Since retail has become an omnichannel business model, you would be remiss not to consider each way your potential customers like to do business – brick and mortar shops, mobile applications, catalogues, FAQ webpages, social media, live web chats, telephone communication, and more. Expanding your channels with a consistent brand and message will expand your reach.

If you need help starting a retail store, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Colorado Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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How to Startup, Popup, and Get a Leg Up in Retail

How to Startup, Popup, and Get a Leg Up in Retail

Despite the closings and bankruptcies of long-established stores and corporations over the past few years, Denver continues to attract national and international retailers. Big names like IKEA, Uniqlo, H&M, Whole Foods, Trader Joe’s, and Alamo Drafthouse Cinema have moved in, creating an even tighter real estate market for new or expanding businesses hoping to enter the city’s thriving retail market.

While you may not be looking for a huge warehouse to set up your small retail store, you would certainly benefit from being a part of the larger scene. If you are not already an established brand, then a startup business may be a great option for you. If you want to expand, then a popup shop may be a great alternative to a traditional storefront. Just as online consumerism has changed the landscape of commerce, startups and popups are transforming traditional retail.

Small Business Attorney E.C. Lewis, P.C. can help with every aspect of starting or expanding your retail store, from contract review and creation to daily business operations. This post will explore these types of stores and what they can do for your retail store.

What Constitutes a Startup?

One definition of a startup company is a fast-growing small business that aims to meet a marketplace need by developing a viable business model around an innovative product, service, process, or platform. Startups typically enter the market quickly by finding new or less costly ways of operating, e.g. food trucks, booth rentals, and popup shops. This model creates experiences that draw customers to a social scene, which is very appealing to Denver’s growing millennial population.

While e-commerce continues to push retail to evolve, there is a trend in today’s retail concept, going from online only to actual establishments. This movement from click to brick can be seen with Fabletics, Omaha Steaks, and Amazon whose newest offering is grocery delivery. With an increasingly innovative retail atmosphere, Denver’s hottest districts – Larimer Square, Union Station, Dairy Block, Denver Central Market, and more – are responding with more unique and versatile spaces.

No longer exclusively associated with techie communal space working, tennis table playing employees, startup businesses have many determinants. Years in business, annual revenue, and number of employees are just some of the ways people measure whether a small business is a startup or not. So, what if you have successfully started a startup and want to expand? A Forbes article points out that the key attribute of a startup is its ability to grow and scale very quickly. And, one way to do this is by opening a popup location.

What are the Benefits of a Popup Shop?

Popup shops are a great way for a fledgling or expanding business to enter the market. These types of stores require less capital investment to introduce or test a new product or service, and they provide instant customer feedback. A Shopify article describes a popup shop as a short-term retail event that creates a frenzy with its “get it before it’s gone” message. The temporary nature of this type of store enables you to plan around an occasion or a holiday that may suit what you are selling perfectly. You can also go to your customers by choosing the district, kiosk, or gallery space where your product or service matches the personality of the neighborhood.

After you have vacated the popup location, the idea is that customers will remember your product or service and follow you. This is a fantastic segue to having an omnichannel presence – you entice your prospective customers with an in-store experience, then lead them to your other location(s), website, and social media accounts where they can find you and become loyal customers.

Like setting up an actual, more permanent retail store, you must consider many factors when planning for your popup location. Rent, utilities, insurance, Internet, point of sale (POS), furniture, repairs, inventory, displays, marketing, duration are some of these considerations. A small business attorney can help you with choosing the right location and entity, reviewing and drafting contracts, keeping compliant with taxes and licensing, and expanding your retail store.

If you need help with your retail store, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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What’s in a Name for Your Home Business?

What’s in a Name for Your Home Business?

Your home-based business may be something you have been dreaming about for a long time, or it may be the result of a lay-off or need to supplement your existing income. Being your own boss, making your own hours, and having endless possibilities for growth are just some of the many perks. Whether you are a designer making custom jewelry or a freelance programmer looking to expand your business, you will need to consider all of the legal, technical, creative, and minute details of starting, protecting, and broadening your home business. Small Business Attorney Elizabeth Lewis will not only help keep your business legally upright, but she will also help with the things you may not have considered. This post will cover three often overlooked areas of home business planning:

  1. Choosing a Name
  2. Choosing a Legal Structure
  3. Choosing an Address

1. Choosing A Name For Your Home Business

Coming up with a name can be the easiest and most fun start to your home business. Testing out names on your family and friends and drafting logos are an exciting part of the creative process, but there are important steps to take before you settle on a name or establish a brand. Your name should identify your products/services, be memorable, and stand out. If it is too generic – Denver Jewelry – it may be difficult to register or trademark. If it is too narrow – Carla’s Breakfast Cupcakes – it may inhibit or restrict the growth of the business. The name should match the spirit and purpose of your business and inspire your logo and marketing. But first… make sure it is available. Before you do a national trademark search, check with the Colorado Secretary of State’s Office. You can register or reserve your trade name online on the Secretary of State’s website. The Denver Public Library also has resources, like trade name searches, for small business. It is also important to secure a domain name for your website. Your small business attorney will help with both the legal aspects of your home business name as well as your online marketing presence and, if needed, refer you to a trademark attorney to help secure your name.

2. Choosing A Legal Structure For Your Home Business

The structure of your business impacts many other decisions, affecting your liability, taxes, permits, and licenses. You might start doing business as a sole practitioner, but later decide to become a limited liability corporation (LLC) or an a corporation. Operating as a corporation can give you legitimacy that you may not have as “some guy who works out of his house.” With an LLC or Corp, you may be able to protect your personal assets from creditors, avoid paying both personal and corporate taxes, and deduct pre-tax expenses (e.g. travel, computers, phone bills, advertising, and health care premiums). Here are some pros and cons for LLC versus a corp.

Pro LLC

  • easy to set up
  • inexpensive to start
  • less red tape than forming an S corp

Con LLC

  • required to pay self-employment tax on income generated in the LLC
  • must operate the LLC distinctly and separately from personal affairs

Pro Corp

  • profits after payroll expenses, federal taxes, and FICA can be distributed to owner and are taxed at a lower rate than income if s-corp status is chosen

Con Corp

  • stricter tax code guidelines than LLCs
  • costs more to form a Corp
  • can have additional state taxes

Make sure you know the difference between the tax status and legal status of your entity though. For example, a LLC or a corporation can be an “s-corporation” as s-corporation just means you have elected to be taxed under subchapter s of the internal revenue code. If you are an LLC taxed as an s-corp, you may have many of the restrictions (and costs) of a corporation.

Because each state has its own rules, a small business attorney will help you choose both the best legal and tax structure for your home business and, with the help of a CPA, make sure you remain compliant with Colorado’s tax, licensing, and permit laws.

3.

Choosing An Address That Isn’t Your Home Address (And Why It Matters)

There are so many wonderful benefits of working from home – having clients or customers know where you live might not be one of them. For LLCs or Corps, a registered agent’s address can be substituted for your own. However, if you are not incorporating, you can get a P.O. Box or use a “Doing Business As (DBA)” mailing address. These are options if you would like your personal residence to remain private or if you live somewhere, like an apartment complex, you fear will come off as unprofessional. There are home address alternatives. A mail-receiving service can provide a street address and a suite number rather than your actual address or a P.O. Box. These mail service companies will also pack, ship, and track your packages. An email account will further reduce the volume of mail and phone calls you receive. Whichever address you choose for your home business, remember to respond to all inquiries promptly and establish an efficient system. This will keep your operations running smoothly and your customers satisfied.

Another issue relevant to your home address and your home business is how your address appears to listing services such as Google My Business. If you don’t want you home address with a map to your front door being displayed, make sure you double check and correct how your listing is shown.

If you need help setting up or keeping up your home business,
contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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Setting Up Your Home Business in Denver

Setting Up Your Home Business in Denver

A home business is characterized by its location, size, and number of employees. Typically, it is a small business operated out of a residence with one or very few employees who are often family members. You may work from a home office with an outside product or service, or you may have a designated space to showcase your product and accommodate clients. Regardless of your model or vision, running a home business takes a lot of time, patience, and research. There are federal, state, city, and even neighborhood guidelines to consider as well as specific tax rules. And, when you think you have a handle on the intricacies of operating a home business, there can be surprises or issues you never knew existed. A small business attorney will assess your home business structure and help you stay compliant with zoning and tax regulations, minimize your liability, and maintain a clear and competitive identity. This post will cover four major areas for small home business owners.

  1. Managing Operations From Your Home
  2. Regulations for Establishing a Home Business
  3. Taxes Rules and Deductions as a Home-based Business Owner
  4. Validate Your Home Business from the Start

1. Managing Operations From Your Home

Despite the many challenges and pitfalls of owning a home business, you are in very good company. According to the U.S. Small Business Administration, more than half of all U.S. businesses are based out of an owner’s home. Well-known brands like Apple, Hershey’s, Mary Kay, and Ford Motor Company all started out as home-based businesses. But, before you daydream about your empire or try to decipher all of the zoning and tax laws, you must consider some basics of running a home-based business. Can you see yourself managing your operations from your home? Do you have the right space? What will it cost to reconfigure the space? Is your family on board? Will work-life balance be a problem? It is important to have a designated area for your business operations so that your entire home does not become a constant reminder of work to be done. A small business attorney will help with your home business formation from R&D to optimizing your success and work-life balance.

2. Regulations for Establishing a Home Business

Once you have determined that a home setting will support your business, there are numerous legal guidelines you must follow. Denver has specific ordinances, limiting the type of business that can be operated from a home as well as the impact it has on surrounding residences. The permitting process for establishing a home business includes a zoning permit. Even if you are a one-person day care, if you are doing business from your home and use your home address as a business address, you need to obtain a zoning permit. These set the standards for size and location of structures and appropriate uses for your property. Be sure your intended business is in compliance with the Denver Zoning Code. In the event construction is required to convert your home work space, Denver requires inspection and permitting for building code standards to protect and ensure public welfare. This is conducted after zoning permits have been issued. Some home businesses may require additional permits, licenses, or inspections. Child care and food preparation businesses, for example, require a business license. Your attorney will keep you in compliance with local regulations, including home-owners association regulations, as well as ensure you have the right insurance coverage.

3. Taxes Rules and Deductions as a Home-based Business Owner

In addition to zoning requirements, you are subject to intricate tax rules and deductions as a home-based business owner. You are allowed to deduct part of your real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, and certain other expenses. These deductions only pertain to the portion of your home designated as a place of business. If you want to maximize your deductions, it is essential to maintain accurate records of how and where you conduct business in the home. A small business attorney will determine if you should change the way you do business in order to save money on your taxes and decrease your liability in the case of accidents.

4. Validate Your Home Business from the Start

There are many perks to having a home business. Working from home affords you more versatility and flexible schedules, which also helps to entice the right employee(s) if you are looking to expand your business. A home office can add thousands to the price point of your home – a great asset in Denver’s housing market. So, with all of the plans, permits, forms, insurance, and licenses in place, your home business will be up and running. How, then, do you instill confidence in your customers? There are a few easy ways to help validate your home business from the start. Use a physical street address instead of a P.O. Box; this will also increase your search engine rankings. Do not underestimate the impact of printed marketing materials. Something as simple as a business card can serve as a physical reminder of your business. Your online presence is, of course, extremely important. Engaging new and current customers via social media or blog post on your website will legitimize your business further. These are great tools for you and your customers to share success stories and great experiences. Finally, collaborate with the right people who may have expertise where you do not. A small business attorney will partner with you to create the best possible business formation and see you through the process and growth of your home business.

If you need help with your home business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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