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How Profitable Should My Startup Be?

How Profitable Should My Startup Be?

Profitability. Burn rate. Runway. All these terms get floated around when building a company. Some may think there are two options for a company: either lose as little as possible or make as much as possible. But, like many things in life, there is more complexity to the issue.

There are companies like WeWork who lost nearly $2 billion of cash between 2018 and 2019. But there are others like Juul who have increased revenue from about $200 million to nearly $1 billion in just one year. They also attained about $12 million in profit during that run. 

For any startup, there is a balance between profitability and growth. This doesn’t mean, though, that the only two options are burning billions or making a few million. A third option is making just enough profit to cover the founder’s expenses. In doing so, your company sustainable. Many call this ramen profitability.

Ramen Profitability Defined

Ramen profitability is a term that was popularized by venture capitalist and serial entrepreneur Paul Graham and since he is the man responsible for bringing this term into the lexicon of the business world, he is undoubtedly best equipped to define it.

In his words, ramen profitability “means a startup makes just enough to pay the founders’ living expenses.” This is a different form of profitability than startups have typically pursued. For entrepreneurs, profitability typically means a big bet is paying off in big ways. The main importance of ramen profitability is that you make just enough and it buys you time.

Related: List of Coworking Spaces in Omaha

Ramen Profitable Startups vs Typical Startups

guy writing on white board

During the early days of a startup, striving to achieve ramen profitability is an excellent way to ensure that a company will survive without raising a lot of capital. In Nebraska, it can be difficult to find venture capital even with a growing network of angel investors. Often, when operating in Lincoln or Omaha, founders struggle to find meaningful investment at early stages like they in larger markets on the coast.  A company that has attained enough profit to survive without growth capital can assure it will stick around long enough to find the right investors.

Traditionally, startups have sought out investors in an effort to raise capital that is then spent on building the company. This approach might mean that a business does not see profits for many, many years to come but, when profitability is reached, millions of dollars may be generated. In and around Nebraska, investors are more attracted to stability, profitability, and control. Because of this, ramen profitability is a great approach in the early days of new ventures.

With ramen profitability, a startup can achieve profitability much earlier since investment debts aren’t draining the company. With this approach, the goals are simply to eschew raising capital while focusing on achieving a high enough level of profitability to at least pay for the salary of any founders. Once that benchmark has been reached, the company is profitable.

Related: Guide to Finding Angel Investors in Omaha

Ramen Profitability Is an Excellent Indicator of Viability

money and calculator

For startups looking to delay raising capital, the time spent working with a goal of ramen profitability in mind can bring about a few benefits.

One very big advantage is the fact that reaching this goal perfectly indicates the viability of a startup. That’s because, once profitability is achieved, three things can be inferred:

  • People are happy to pay for the product, which means that the market exists;
  • The founders solved a pain point in the market;
  • The startup’s founders were able to control spending and successfully manage cash flow to achieve profitability.

All of these indicators are important benchmarks to achieve when the time does come to start talking with investors.

Related: Opportunity Zone Investment for Startups

Advantages Inherent to Ramen Profitability

Choosing to govern a startup with the goal of ramen profitability in mind can have many advantages with some being more obvious than others. 

  • One key advantage that comes from following this model is the fact that, when founders do need to approach investors, they won’t be desperate for cash and can negotiate better terms.
  • A startup’s profitability will also work to the advantage of its founders when approaching investors because profit, no matter how small, will prove the viability of the business.
  • Finally, because ramen profitability allows founders to delay the process of raising capital, they are better able to focus their time on the business instead of dealing with endless meetings and negotiations with investors.

Related: 10 Best Time Management Apps for Startup Founders

Ramen Profitability Is Not a One-Size Fits All Approach

While ramen profitability certainly has its advantages, it isn’t the perfect fit for all entrepreneurs. That’s because, for some startups, such a large infusion of cash is needed right from the beginning that raising capital is virtually unavoidable. It really depends on your end goal. If you’re more concerned with blitz scaling and are okay with burning through money quickly, then ramen profitability isn’t for you. On the contrary, if you’re more interested in long-term growth and becoming a profitable company, ramen profitability is the route for you and your business to take.

Ramen Profitability is the Solution Your Business Needs

stacks of coins

Once all of the advantages and disadvantages inherent to ramen profitably are considered, it’s easy to see why it’s such an attractive option for founder on the Silicon Prairie. In places like Nebraska, capital is difficult to find and often takes a much longer time to secure than it might in larger metro areas. Most investors in the Omaha and Lincoln area are more risk-averse, especially in the early stages of new businesses. Ramen profitability assures founders they can stay afloat while they work to secure funding. 

Office space can really chew up startup cash fast. That’s why we built Populus to be flexible and cost-effective office space for teams of 2-20. Check out our coworking spaces in Omaha and let us support you with an amazing and affordable workspace.

Related: LLC or Inc: What’s Better for a Startup?

Disclaimer: This article is intended to help business owners make more informed decisions in regards to the topic; however, please contact an attorney for legal advice and an accountant for tax advice. Populus makes no representation as a legal advisor or tax advisor.

 

10 Books Every Entrepreneur Must Read

10 Books Every Entrepreneur Must Read

Being an entrepreneur is a continuous journey of learning, applying, and iterating. Whether it’s trying to raise capital or finding the perfect coworking space, entrepreneurs have a lot on their plate – at all times. Plenty of entrepreneurs have been down the same path and, luckily for us, have jotted down their learnings and unique perspective on what makes an entrepreneur successful. 

Whether it’s inspiration or advice on how to be a better entrepreneur, we’ve compiled the ten best books worth reading. Check them out below:

Related: 10 Best Slack Apps for Your Team in 2019

1. Spin Selling 

 By Neil Rackham

For anyone looking to learn how to improve an organization’s sales strategy when it comes to high-value accounts.

Spin Selling by Neil Rackham is a classic business book focused on sales. It’s all about practice makes perfect, and Neil after going through over 35,000 sales calls in his career decided to share his most key learnings in this book. 

The book dives into helping entrepreneurs develop a differentiated sales methodology that’s appropriate for their business known as the SPIN (Situation, Problem, Implication, Need-payoff) strategy.

It elaborates on the right questions to ask when it comes to selling, and how this helps determine the right sales approach to take – all depending on the value of what is being sold. 

With deep expertise in sales, Rackham has advised organizations such as IBM and Honeywell when it comes to their sales approach and delivered dramatic increases in sales volume. All of which are explored in this book. This one’s a must-read for anyone looking into high volume sales strategies that require a differentiated approach vs. the one applied with small value consumer sales used by most businesses.

“Successful people ask a lot more questions during sales calls than do their less successful colleagues. We found that these less successful people tend to do most of the talking.” 

Neil Rackham, Major Account Sales Strategy

2. The Hard Thing About Hard Things

By Ben Horowitz

For anyone thinking of starting a business or currently running one. This book is packed with key real-life learnings on how to successfully build, manage, sell, and invest in businesses.

Serial entrepreneur and co-founder of VC firm Andreessen Horowitz (which has an amazing blog), Ben lays out critical advice on building and running a startup in this book. Taking a unique angle, he skips the business school advice and dives into real-world practical learnings – all the while using his favorite rap song lyrics to reinforce his insights.

Throughout the book, Ben Horowitz addresses commonly held beliefs from seasoned business builders – that there is no perfect approach to launching a business, but being prepared for the screw-ups and quickly learning from them is key.

In this book, Ben shares the many mistakes that were made while leading large billion-dollar corporations and how his team acted to turn things around. He shares the difficult decisions he’s had to make, and all the while reveals his learnings using his trademark dry humor and no bullsh*t approach.

This book is on every successful entrepreneur’s shelf as it perfectly highlights the highs and lows of startup life, the resilience one builds, and the rewards at the finish line.

“’Life is struggle.’ I believe that within that quote lies the most important lesson in entrepreneurship: Embrace the struggle.” 

Ben Horowitz, The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

    3. Daring Greatly

    By Brene Brown

    For anyone who fears the critics and the risk. Daring Greatly is a manifesto about stepping out into the unknown and trying something new, different, or hard.

    In this book, Brene Brown explores courage and vulnerability. She shows us that vulnerability is not weakness, but a key to innovation and leadership. It is by embracing our fears that we become more courageous to explore the unknown.

    Brene expertly identifies the feeling all entrepreneurs experience because of critics. She helps us understand how to deal with those that sit on the sidelines and are full opinions. There is no better book to understand the feelings of fear, uncertainty, and risk that come along with building something new.

    “Vulnerability is not weakness, and the uncertainty, risk, and emotional exposure we face every day are not optional. Our only choice is a question of engagement. Our willingness to own and engage with our vulnerability determines the depth of our courage and the clarity of our purpose; the level to which we protect ourselves from being vulnerable is a measure of our fear and disconnection.” 

    Brené Brown, Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead

    Related: 10 Best Time Management Apps for Startup Founders

      4. The High Growth Handbook

      By Elad Gil and Kevin Stilwell

      For anyone looking for advice in turning their thriving startup and navigating it’s high-growth towards becoming a unicorn.

      Tech executive and investor Elad Gil has worked with many startups that have now grown into large global organizations. With experience driving growth at Airbnb, Twitter, and the likes, Elad breaks down common growth strategies that have played out across these companies and shares a repeatable playbook.

      Focusing on providing advice for startups that have achieved product-market fit, Elad covers key topics required to successfully manage growth such as recruiting a stellar team, handling aboard, and setting up your business for a successful merger, acquisition, or IPO.

      Not only does Elad provide direct advice and insights, but he also shares interviews with successful entrepreneurs in Silicon Valley such as Reid Hoffman and Marc Andreessen to share their perspective on how to handle the high-growth startup phase.

      An insightful and highly recommended book focused on navigating the complexities of turning a startup into a thriving global brand. This one’s a must-read for anyone seeking strategies to blitz scale their business.

      “All startup advice is only useful in context, and I am a firm believer that the only good generic startup advice is that there is no good generic startup advice. So take what is written here with a grain of salt—it is very much one person’s experiences.” 

      Elad Gil, High Growth Handbook

      5. Zero to One

      By Peter Thiel

      For anyone looking to understand how to develop ideas that can change the world, and how to take those ideas from conception to real businesses. 

      Peter Thiel is considered a legend in the entrepreneurial tech space so it’s no surprise this book makes the cut on many startup founders’ bookshelves.

      In Zero to One, Thiel focuses on the tech industry and provides practical advice on tackling big challenges, and navigating the tricky road of turning an idea into a company.

      Although the book is from a tech veteran, Thiel talks about how innovation can be done in other industries, and how innovation isn’t building on other ideas but doing something entirely new that can have a huge impact on the world. Crafting new industries instead of starting businesses in existing ones. 

      Beyond sharing insights on what he deems as useful entrepreneurial ventures to take on. Thiel also reflects on American progress so far in innovation, and the questions leaders in the space asked to come up with the ideas that have changed the way we go about our lives.

      A fantastic book that opens up your perspective on what it means to be an entrepreneur and how to chase billion-dollar ideas that can make a lasting impact on the world. 

      “You’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business—no matter how good the product.” 

      Peter Thiel, Zero to One: Notes on Startups, or How to Build the Future

      6. The Messy Middle

      By Scott Belsky

      For anyone who is somewhere between the beginning and the end of any project or startup. This is a masterpiece on what is required to work through the uncertainty of entrepreneurship.

      The Messy Middle is a book that reads more like a manual. It’s a book that you’ll likely reference over and over again, turning to a specific chapter on a unique topic. It’s written in very short pieces of content which makes it very easy for entrepreneurs to engage. The Messy Middle covers optimizing your team, self-awareness, competitive advantages, embracing the long game, and other crucial topics for startup leaders.

      There is a lot of discussion about how to start something new and the success that comes at the end. There isn’t nearly as much content about all the messy work that happens in the middle of building a startup. Entrepreneurship is volatile, risky, uncertain, and unpredictable. New ideas are a rollercoaster and this book is a manual on how to deal with all that comes with the ride.

      “If we have a good quarter, it is because of the work we did three, four, five years ago, not the work we did this quarter.” 

      “You can get the important stuff right and still lose by not enduring long enough.” 

      Scott Belsky, The Messy Middle: Finding Your Way Through the Hardest and Most Crucial Part of Any Bold Venture

      Related: Guide to Finding Angel Investors in Omaha

      7. Rework

      By Jason Fried and David Hansson

      For anyone looking to start a business but is overwhelmed by the tasks involved. Rework dispels the notion that launching ideas require careful planning and lots of capital, and instead shows you how to launch ideas in a lean way.

      Rework is all about changing perspective and removing a lot of the biases in how ‘work’ should be done. Rework explains the new world we live in, where anyone can start a business over a weekend given the inexpensive tools at our disposable. It looks at the commonly held beliefs such as developing a business plan and researching the competition before beginning a business, and advocates to do the exact opposite. 

      That is, to act first, be lean, and analyze later.

      Jason shares a whole new framework and system for achieving your entrepreneurial dreams. With a strong emphasis on learning by doing, he helps guide one through the thinking to start a business on the side while working their day job. To achieve traction with very little upfront capital, and use that momentum to scale side hustles into fully-fledged businesses.

      With simple language and a clear playbook, this book is full of actionable steps that can help one take their ideas to execution.

      “Workaholics aren’t heroes. They don’t save the day, they just use it up. The real hero is home because she figured out a faster way” 

      Jason Fried, Rework

      8. Die Empty

      By Todd Henry

      For those on the fence about whether or not to pursue their dreams and passions. This is a book about doing your most important work every day, because we only have so many days available. The world needs your creative work and fresh ideas. 

      Die Empty is a book by author and speaker Todd Henry. He is also the voice behind the popular creative podcast The Accidental Creative. This book is all about the importance of launching your best work right now. It urges creatives and innovators to resist the lull of comfort and familiarity to launch their ideas and build new things.

      This isn’t simply a book about following your passion. This is a book about identifying the unique value you bring to the world and then going all in on that opportunity. This book encourages you to be fiercely curious, step out of your comfort zone, wisely define goals. 

      There is no better author to help encourage you to step out and take the risk you know you must take. This world needs your best work today. You don’t know how many tomorrows there will be, so stop waiting for tomorrow.

      “Passion” has its roots in the Latin word pati, which means “to suffer or endure.” Therefore, at the root of passion is suffering. This is a far cry from the way we casually toss around the word in our day-to-day conversations. Instead of asking “What would bring me enjoyment?” which is how many people think about following their passion, we should instead ask “What work am I willing to suffer for today?”

      Todd Henry, Die Empty: Unleash Your Best Work Every Day

      Related: LLC or Inc: What’s Better for a Startup?

      9. The Lean Startup

      By Eric Ries

      For entrepreneurs looking to take ideas to launch rapidly, this book walks you through lean principles that can help you build companies that can adjust and adapt to achieve product-market fit, and beyond.

      The Lean Startup is usually the first book recommended by any startup founder to those looking to join the entrepreneurial world. In this book, Eric shares how one can apply ‘lean’ principles in rapidly testing and validating business ideas. 

      Eric shares techniques that allow companies to be flexible and pivot quickly to achieve product-market fit. With a focus on the notion of ‘adapting and adjusting’, this book teaches companies regardless of size how they can adjust to changing consumer and market needs, and as a result, adapt and thrive.

      Using lessons from ‘lean manufacturing’, the book emphasizes a scientific approach. It encourages rapid experimentation, to ignore vanity metrics and measure what matters, as well as various other counter-intuitive strategies. 

      This book is great at illustrating how to build dynamic companies that can adjust to market movements before it’s too late. 

      “Success is not delivering a feature; success is learning how to solve the customer’s problem.” 

      Eric Ries, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

      10. Measure What Matters

      By John Doerr

      For leaders and entrepreneurs looking to learn how to define clear organizational goals, and measure progress in real-time. Measure What Matters lays out the playbook on how to implement OKRs in an organization, and shares various case studies on the benefits it delivers.

      Measure What Matters is a best-selling book about OKRs, objectives and key results. Company OKRs are metrics that have gone on to help countless brands such as Google define and focus on their goals. 

      John brought this technique of applying scientific measurement to management strategies to Google in the 1970s and has since shared how this can be developed for any organization through this book. 

      Using multiple case studies, the book walks one through how to define such goals, implement ways to track progress and translate the goals into clear actions that can be executed on by pre-set timelines. 

      The book shares the various benefits this achieves from boosting employee morale, improving retention, and has chapters narrated by Bill Gates and Bono on how OKRs have helped them in leading high performing teams. 

      “Leaders must get across the why as well as the what. Their people need more than milestones for motivation. They are thirsting for meaning, to understand how their goals relate to the mission.” 

      John Doerr, Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs

      Conclusion

      These books are exactly what every entrepreneur needs in their library. They provide critical information and advice. Each one of these books mentioned will benefit you and your company. There are so many entrepreneurs that have come before you and don’t want you to make the same mistakes that they did, so take advantage of the knowledge they give and avoid unnecessary errors. If you’re a business in Omaha, Nebraska, be sure to check out our coworking spaces. Working alongside other entrepreneurs is another exceptional way to learn and grow.

      Related: Unique Benefits of Shared Office Space

      Disclaimer: This article is intended to help business owners make more informed decisions in regards to the topic; however, please contact an attorney for legal advice and an accountant for tax advice. Populus makes no representation as a legal advisor or tax advisor.

       

      10 Best Time Management Apps for Startup Founders

      10 Best Time Management Apps for Startup Founders

      Entrepreneurs are often creative and innovative individuals. With so many tasks on their daily to-do lists, it’s common for entrepreneurs to get distracted or become disorganized. When you’re just starting a business, you may not be able to afford to have an assistant to keep everything organized. Luckily, there are time management apps that can help you stay on track with all of your tasks.

      Keep in mind that for every startup founder, time is a precious resource. From scheduling meetings, fulfilling orders, and accomplishing a ton of other tasks, it just seems like there are never enough hours in the day.

      This is why it is important for startup founders to use their time effectively. There are a lot of time management apps that will help you manage your time better and ease any stress caused by disorganization.

      Related: Opportunity Zone Investment for Startups

      With these apps, you’ll be able to:

      • Free up your schedule
      • Find time for your personal life
      • Focus on getting your work done 
      • Multitask with little to no difficulty
      • Improve profitability 
      • Bill accurately
      • Calculate work rates
      • Capture tasks that often go unreported, like travel and meetings

      Here are the 10 best time management apps for startup founders:

      1. Evernote

      evernote

      Evernote allows users to create, organize, and attach notes, files, and images. The app is designed to ensure that the user can accomplish multiple tasks in a single app. Evernote can act as a digital notebook for almost anything and everything.

      It helps the user to:

      • Track their expenses
      • Manage their calendar 
      • Create slideshow presentations 
      • Plan their next trip

      Evernote also makes it easy for users to create, share, and discuss with others in the organization. Evernote also makes it possible for users to develop projects faster and allow multiple participants to work on different aspects of the project. Evernote is a necessary time management app for startup founders.

      2. Pocket

      pocket

      Pocket makes it easy for users to save interesting links and articles for later, as well as organize them however they deem fit.

      Pocket is a bookmarking app that ensures the user never loses an article they may need. Pocket allows the user to save everything in a single place ensuring they have quick and easy access to it.

      Pocket integrates with over 1,500 apps and allows offline viewing of websites and articles. Pocket is a must have time management app.

        3. Trello

        trello

        Trello is a team collaboration software. It allows users to interact through tasks and collaborate with colleagues and team members. 

        Trello is fun and easy to use, it allows the user to keep track of everything that goes on in their company. It also allows the user to assign, delegate, and monitor tasks. Users are allowed to manage a project, view the progress, build roadmaps, and much more. Another great feature of Trello is that it can be synchronized across the user’s devices and it allows third-party apps integration.

        Related: LLC or Inc: What’s Better for a Startup?

          4. RescueTime

          rescuetime

          RescueTime provides users with detailed reports about websites they spend most of their time on. The app comes with a promise to maintain the work-life balance of the user. It allows a user to monitor and analyze their daily activities in regard to the time spent on each website.

          The ability to know what fills up most of your time and what really distracts you from getting things done allows you to prioritize activities and save a lot of time. RescueTime is a necessary time management app for all startup founders.

          5. Hootsuite

          hootsuite

          Hootsuite lets the user manage all their social media accounts from one single place. For business owners, it’s necessary to maintain an online presence, not just on a company blog, but on various social networks. 

          Hootsuite makes it easy for users to schedule posts, track engagement, browse newsfeed, respond to messages, and see reports and analytics.

          6. Harvest

          harvest

          Harvest allows users to easily track time, log expenses, and manage invoices on the go. Harvest is a time and expense tracking app that can help a startup founder shift their mindset and start thinking about time as a finite resource. 

          The app integrates with tons of other tools like Trello, GitHub, and others. Harvest helps a user to track billable time to ensure that every minute is properly accounted for.

          Related: Omaha Startup Press for 2019

          7. Todoist

          todoist

          Todoist allows the user to create digital to-do lists and tasks. Items can be shared with colleagues, assigned specific due dates, and flagged for priority.

          Todoist integrates with hundreds of apps so that the user can stay on top of everything they’re doing. It allows users to add daily habits and recurring tasks and deadlines to prevent them from manually inputting repetitive tasks every time.

          8. Wunderlist

          Wunderlist

          Wunderlist lets users capture, share, and complete lists on their own or with colleagues. Users can track, complete, share their own goals, and assign tasks for their team members.

          It allows users to check off their personal and professional to-do list by getting everything in sync and making it easy to share their list.

          Wunderlist is a cloud-based task-management application, it makes sharing grocery lists, working collaboratively on projects, or planning household activities a lot easier. Wunderlist also syncs with the user’s phone, tablet, and computer to ensure they can access the list from anywhere.

          Related: Why People Hate Offices and Don’t Like Their Jobs

          9. Toggl

          Toggl

          Toggl is a time management app that users can use to track time spent on tasks and manually add entries.

          It helps users track their time to improve productivity. The app provides features that can be divided by tasks, projects, and clients to determine how efficiently time and money are spent.

          With Toggl, a user can:

          • Sync Toggl across devices and track everything 
          • Find ways to optimize time spent on tasks
          • Review their week, month, and yearly productivity

          10. Slack

           slack

          Slack is the most popular internal communication tool and has extensive functionality. It allows the user to communicate with the team, exchange documents and files, set reminders, arrange calls, manages to-do lists, and have many other issues under control.

          Slack is fun, secure, and sufficient enough to be used as the main communication tool. It is an essential time management app for startups.

          Related: 10 Best Slack Apps for Your Team in 2019

          Conclusion

          Time management apps make it a lot easier for startup founders and entrepreneurs to manage their time effectively and prevent distractions. These apps ensure that you maintain a proper work-life balance and never get off track. If you’re a startup founder, you should definitely check out some of these apps. And if you’re a startup in Omaha looking for office space, contact us.

          Disclaimer: This article is intended to help business owners make more informed decisions in regards to the topic; however, please contact an attorney for legal advice and an accountant for tax advice. Populus makes no representation as a legal advisor or tax advisor.

           

           

          10 Best Slack Apps for Your Team in 2019

          10 Best Slack Apps for Your Team in 2019

          Do you remember the classic game “Telephone”? The game where one person says a sentence to the person next to them and they keep it going down the line. Often times, the phrase is completely different by the time the last person hears it. The whole point of the game was to show how easily information gets misconstrued. It’s okay if it’s just high school gossip, but when it comes to your office space, you can lose millions of dollars because of falsely spread information.

          The last thing you want is miscommunication within your organization. With this in mind, you definitely should consider a mind-blowing app like “Slack”. This app has undoubtedly become a leading team collaboration tool. With its easy configuration and smooth learning curve, Slack is a favorite for 10 million+ users.

          As a top productivity app for corporations and startups, Slack helps teams to communicate better. Whether you want to get your team’s feedback, be notified for each new task, or just keep the conversation going within your team, chances are there’s already a Slack app that can do that for you.

          Here’s a list of the 10 best Slack apps for your team in 2019:

          1. Donut – Team Building in Slack 

          Donut

          Investing in team building activities helps to bring a lot of positivity to the overall organizational culture. Donut is a social communication platform designed for building better team relationships. It does so by developing connections between the team members and reminding them to meet for collaborations.

          The Donut app for Slack lets you send your new employees any information they may need to start their new job. Or you could connect them with a team member who can introduce them to the company, its policies, and a host of other things.

          If you integrate Donut with Slack, you can:

          • Connect with new team members via direct 
          • Get reminders for meetings with team members 
          • Create Slack pairing channels for multiple teams 
          • Easy new employee on-boarding by connecting them to other team members

          Related: Unique Benefits of Shared Office Space

          2. Time Doctor – Productivity Tool

          time doctor

          Every team needs Time Doctor to improve overall team productivity. It is one of the best slack apps out there. 

          Time Doctor is a real-time tracking tool that measures the time spent on a task, it takes screenshots of your employees screens to better monitor their overall time spending patterns.

          Time Doctor allows you to:

          • Track the websites and applications being accessed by your team during a task
          • Track the time an employee spends on a task and receive reports in Slack channels
          • Receive updates when tasks are completed 
          • Receive notifications whenever a resource starts working on a task

          3. Wonder – The Ultimate Reminder Tool

          wonder

          Wonder ensures that forgetting things is no longer a problem for your team. Wonder is a reminder tool that takes the form of a live chat, and by telling the app to remember something, you or your team members can retrieve that information anytime they want.

          Here’s what Wonder does for your team:

          • Saves important team information through memories
          • Brings up the information that it was told to remember in between Slack conversations
          • Dashboard to store, update and categorize information

          4. Tettra – Best Slack App for Knowledge Management

          tettra

           

          There’s a need to introduce a common knowledge hub when teams begin to grow in size. Tettra provides a central hub for teams to store and share collective knowledge. This helps the team to access the right information at the right time without it getting lost in a sea of information.

          The tool provides an easy, efficient, and ideal means for storing team information in one place. Doing so minimizes the hassle of having information stored in multiple locations.

          Related: Opportunity Zone Investment for Startups

          5. Monday – Team and Project Management

          monday

           

          Monday offers a collaborative workspace for you to plan and manage teams and tasks. 

          It allows you to sync conversations across the two platforms, get updates in your Slack channels based on a set of rules you establish, and monitor each change as soon as it happens in real time.

          6. Paymo – Task Management and Time Tracking

          paymo

           

          Paymo is a work and project management solution that brings everyone in your team on the same page. Besides the clean and modern interface, the app also offers a strong set of features for planning, scheduling, and invoicing your work.

          The Paymo for Slack app comes in handy when you want to track work time, create tasks, add files to your projects, or get notified about your Paymo tasks. 

          7. Asana – Manage and Track Your Team’s Work

          asana

           

          The Asana-Slack integration lets you turn conversations into tasks, change the status of an activity, receive notifications to a channel of your choice, link a project to a channel, or just create a new task with a simple asana create command.

          Related: Why People Hate Offices and Don’t Like Their Jobs 

          8. nTask – Best Slack Project Management Integration

          nTask

           

          This is one of the best slack apps for your team. nTask is an intuitive tool that lets you manage your projects through its intelligently designed feature set.

          nTask helps to create multiple workspaces for different teams, executing professional meetings, and facilitate project management from multiple dimensions, such as managing issues and risks.

          nTask allows you to:

          • Post project updates to channels in Slack
          • Create a meeting in nTask and your team members can review all the details through Slack messages

          Get this Slack add-on to make team collaboration even more effective while achieving streamlined project management.

          9. MeisterTask

          MeisterTask

          Creating shared project plans can be difficult and managing them across teams can be downright challenging. MeisterTask helps to keep things hyper-organized by allowing teams to create streamlined, automated workflows and get more work done together.

          The app lets users share work details with team members, upload files, set due dates and add checklist items in real time.

          10. InVision

          invision

          Many creative individuals do some of their best work when they can have real-time feedback at hand. InVision provides this and more right within Slack.

          InVision is dedicated to helping users deliver the best possible digital product experience. It provides intuitive tools for ideation, design, and prototyping all in one place. The platform gives you and your team everything that will be needed for digital product design.

          InVision also allows multiple project files to be stored, viewed, reviewed, and commented on simultaneously. Designed prototypes can be connected to channels, making changes visible to team members, and individual screens can be shared for instant collaboration.

          Conclusion

          We’ve discussed the ten best slack apps that your organization needs in 2019. Whether your company is a startup or a large corporation, these integrations will make communication between you and your team efficient. Even if your team is in a shared office space, communication will be better enhanced with these great apps, so check them out! You won’t regret it.

          Related: LLC or Inc: What’s Better for a Startup?

          Disclaimer: This article is intended to help business owners make more informed decisions in regards to the topic; however, please contact an attorney for legal advice and an accountant for tax advice. Populus makes no representation as a legal advisor or tax advisor.

           

           

           

          Guide to Finding Angel Investors in Omaha

          Guide to Finding Angel Investors in Omaha

          Raising capital isn’t easy. Raising your first round of capital can easily be the most difficult, especially for those who haven’t raised with previous companies. For many founders, raising money can become a full-time job. It takes time to build the pitch, format spreadsheets, and then attend meetings upon meetings. This is, of course, on top of actually running your company. Sound exhausting? It can be. But for most founders, that’s how the game is played.

          This guide should help if you’re struggling to find angel investors in Omaha or around Nebraska.  A word of caution, though, before we begin. Never lose focus on business development. Every hour spent hunting for investors is an hour you could’ve spent acquiring more business which makes finding investment a lot easier. The more traction you have, the more success you’ll have with investors.

          If you have traction, monthly recovering revenue, and a clear acquisition channel identified then finding an investor to take you to the next step is a great idea. This article is written to help guide founders looking for investors in Omaha. This doesn’t mean that the strategies we show in this article can’t be applied to other cities, states, or even countries.

          What is an Angel Investor?

          An angel investor is a wealthy individual who invests in startups typically in the seed, Series A and Series B funding.

          Wait, What is Seed or Series Funding?

          Seed stage funding is generally considered to be your first official round of investment. It typically comes after the initial investment by the founder(s) and their friends or family. Series A funding would come after your Seed funding and is typically reserved for companies with clear products, marketings, and paths forward.

          In Omaha, and around Nebraska, things work a bit different than on the coast. A Seed round of funding in Omaha might be as little as $50,000 and typically not more than $1.5 million. This can often be done with local accredited investors. In Nebraska, a series A is often over $1 million but less than $5 million. Investment rounds of this size typically require the involvement of regional and national investors.

          What is an accredited investor and the requirements?

          An accredited investor is an individual or business who can engage in securities that are not registered with the SEC.

          Securities need to be registered with the SEC in order to be offered for investment. However, there are exemptions under Rule 506 of Regulation D. Accredited individuals can invest in opportunities like a startup if they meet certain criteria.

          Accredited Investment Requirements

          • $200,000 in annual income for the past 2 years
          • $300,000 in annual joint income for the past 2 years
          • Net worth or joint net worth over $1,000,000
            • Primary residence does not count

          Other unique exemptions for Accredited Investors

          • Trusts with total assets over $5,000,000
          • Any entity in which all of the equity owners are accredited investors.

          When should you look for an Angel investor?

          Once the founders are heavily invested and you’ve identified product-market fit, you’re probably ready for Angel investors.

          Here’s our checklist for when you should raise money:

          • Found a potential acquisition strategy and channel
          • Acquiring customers faster than you can deliver product or features
          • Have a solid customer foundation with little churn
          • Achieved product-market fit
          • You need capital for a large purchase i.e office space/building

          Remember, raising money can also be framed as selling pieces of your company at a discount to a future value. That is, your plan is for your company to be worth more someday and you’re selling it now for less money. You should raise capital when you need capital, but not before and only if the need is beyond your capacity. You want to keep as much of your company as possible for as long as possible, don’t be too eager to give it away.

          Essentially, the only reason you should get investment money is to scale your business to the next point faster. For example, if you’ve proven to have a low customer acquisition cost within a certain channel and it has a healthy profit margin, then it’s a great idea to raise capital to capitalize on the opportunity. Capital should help you turn the flywheel faster, not build the flywheel.

          Another reason to raise capital is if you’re adding revenue at a rapid rate and you can’t hire fast enough. There are a few options, either slow down or raise capital to buy all the extra infrastructure you need to support this rapid growth. If you don’t then your company will spiral out of control and crash. Too much too fast will break things. But don’t overlook the opportunity to slow down and finance with cash from sales.

          “It may seem premature, but you need to be thinking of your exit from the moment you accept capital, because at that moment, you’ve made an explicit agreement with an investor that he or she will eventually be able to gain liquidity.” – Neil Blumenthal

          Only take money when you’re on the offense.

          Seed capital isn’t typically enough money to pay the founders a salary. If you’re looking for seed capital to extend your runway, you’re headed straight for burned bridges. If you’re a brand new founder with little to no experience then don’t get funding until you’ve completed the following checklist.

          Related: Omaha Startup Press for 2019

          Checklist for Startups Raising Money

          Before you go out and apply for investment it’s best that you are prepared. Too many first time founders attempt to raise capital when they’re not ready. Here is an investor checklist for new startup founders trying to raise funding:

          • Pitch Deck (Keep it under 20 slides)
          • Cap Table
          • Team
          • Key Performance Indicators (KPI’s)
          • Exit Strategy
          • Type of funding (Equity, Convertible Notes, Venture Debt, etc)
          • Acquisition Strategy

          Helpful KPI’s for raising money

          Startups that track these KPI’s will have a significantly easier time securing capital. Even better, you’ll get genuine feedback from investors on how to improve certain KPI’s.

          • Customer Acquisition Cost
          • Cost Per Lead
          • Daily Active Users
          • Weekly Active Users
          • Monthly Active Users
          • Customer Lifetime Value
          • Operating Margin
          • Burn Rate
          • Churn

          Apply to Angel Groups in Omaha

          One of the best ways to secure capital for your early-stage startup is through Angel Groups.

          Nebraska Angels

          Nebraska Angels is a group of 60 active angel investors. They’ve invested over 26 million into startups. The angel group also has great resources throughout their site to help prepare founders for raising capital. Nebraska Angels typically invest in startups that need funding between $100,000 to $1,000,000. The funding should provide 12 to 24 months of runway. Check out Nebraska Angels “before applying” page to get more information.

          Treetop Ventures

          Treetop Ventures has a track record of companies of great early investments including a top Omaha startup Sojern. Sojern has brought investment players now alongside Treetop Ventures like the $7.5 billion powerhouse Northwest Venture Partners. One of the best things about Treetop is its transparency. They show you their bad bets, missed bets, and overall success.

          Related: Why People Hate Offices and Don’t Like Their Jobs

          Prairie Ventures

          Prairie Ventures is a diverse investment fund based in Omaha with interests in a number of verticals. The fund has a few success exits already, and a number of unique equity investments like United Republic Bank, which was acquired. They’ve also found a number of successes in healthcare. You can read more about their investment criteria on their website here.

          Invest Nebraska

          Invest Nebraska is active in the Omaha market, and across the state. Their mission is to build a better future by investing in companies, developing high growth infrastructure, and attracting out-of-state capital to Nebraska. They’ve invested in over 50 companies including some of Omaha’s rising early-stage startups. Their portfolio includes Omaha Leverage RX, TAGG, OpsCompass, and Crumb. You can read all about their investment criteria, including FAQ’s and what to expect, on their website.

          Find Accredited Angel Investors using LinkedIn Sales Navigator

          Sometimes, the best route to raising early money is working directly with individual accredited investors. Raising new capital should be viewed like prospecting new business. If you’re unable to get new business then there’s a high chance that you will not be able to close a funding round. The same sales principles will be applied to prospecting accredited investors. The prospecting channel that we will use will be LinkedIn. In order to do this a subscription to Sales Navigator will be needed. Luckily, there is a 30-day free trial so this is the perfect use of building out your investor network. Here is our step by step guide:

          Step 1: Identify your search criteria

          The most important step in finding investors is knowing who to look for. Angel Investors are typically very wealthy individuals, so connecting with folks who aren’t wealthy is a waste of time for this specific exercise. Before you proceed, you should write down as much information as possible about the ideal person you’re trying to target. Build a persona of your ideal investor.

          Here is an example:

          LocationOmaha, Nebraska
          TitleOwner
          IndustryTelecommunications
          Previous ExperienceManaging Director
          Key WordsInvestor, Angel, Marketing

          Let’s say I run a telecommunications startup. Then I would want the person or firm investing in me to also have experience inside telecommunications. This would increase the value of the investment tremendously. Treat the investor as a strategic partner and not so much as someone who gives you money. The right investor should provide you introductions, guidance, and help you solve or prevent problems in your space before they become critical.

          Step 2: Find Individuals in your Criteria with Sales Navigator

          In Sales Navigator, click on search by keyword or phrase. For the first try, search by the keyword “Angel Investor” and then filter by location “Omaha Nebraska.”

          Here are the results:

          There are a total of 262 results for people who live in Omaha and have the word Angel Investor. Now, this doesn’t mean that every person in that criteria is an Angel Investor, but this is a great start.

          When saving these leads, always start off with those who have posted on their LinkedIn within the last 30 days. Those are the most responsive people in the industry. Here is a checklist of prioritizing which potential angel investors to prioritize.

          1. Shared Connections
          2. Years in Role and Company
          3. Activity on LinkedIn

          The next step of the guide is to save potential angel investor profiles to your “lead list”.

          Step 3: Save Angel Investor Profiles to Lead List

          If you haven’t created a lead list then you should do that now. It takes less than two seconds. Just click on the save button next to the person’s profile.

          Step 4: Contact shared connections

          Once you’ve successfully saved everyone you want to reach out to it’s time to go through the list and contact the shared connections. The reason you want to start off with shared contacts first is that they’re the ones who most likely have had some sort of contact with the angel investor. A warm introduction almost always works better than a cold intro.

          Step 5: Cold Connections

          Maybe your shared connections don’t actually know a potential investor well and can’t provide you with an intro. If this is the case, then I recommend reaching out cold. If you don’t ask, it’s always a “no”. Also, remember you have about 50 words to get your point across, so take the time to write and rewrite your message. This cold intro message matters. It should be brief, practical, straight forward, and actionable. Here’s an example of a cold message, or email to use.

          Hey {FirstName}! My name is {name} and I’m the Founder of {Company}. We’re currently raising capital for an Angel round and I’m specifically looking for potential investors with experience in the {industry or market you share}. Do you have an interest in Angel opportunities?  Below, you’ll find a link to your pitch deck and website. If you’d like to explore things in more detail, please let me know and we’ll schedule a call or meeting.

          {Link to pitch deck via something like Dropbox}
          {Link to website}

          An important note, if you have investors already that you think this person may know you should also include this in your message. For example, “we’re raising $250k and we’ve closed $100k with Amy Smith and Sally Sue.”

          The more personalized the connection request and or the email the higher the chance that they will accept and respond.

          At the end of the day, it is a numbers game and the more you practice, test, and optimize the better the results you’ll get. There’s nothing special about getting meetings whether its for sales or raising capital. The prospecting, pitch, and the close process is very similar.

          Step 6: Follow-up

          People are busy, especially if they run their own company or advise others. Just like sales, follow-ups are extremely critical for success. Here’s a list of reasons why someone didn’t respond.

          • Email got buried in email inbox
          • Accidentally deleted email
          • Forgot to respond back to you
          • Email received wasn’t compelling enough

          When you follow up, always bring new information or value. Never simply “circle back” on a message. Follow up with a new pitch piece, an announcement of a new investor, or inclusion of additional information that other investors have asked you to share. For example, “Hi, John, other investors have been asking me to include more detail on our cap table so I wanted to be sure you had that as well.”

          Use Angellist to find active Angel Investors in Omaha

          Angellist is a startups best friend. It’s a hub where you can go to find competitors, jobs, employees, investors, and potential prospects. We will be focusing on finding investors through Angellist. You can find a link to Omaha’s investor page here. You may want to find some of these investors on LinkedIn and work the investor prospecting process above.

          Investors out of state interested in Omaha

          There are many reasons why you should go outside of the city to look for capital. The Omaha investment community is not nearly as robust or mature as other larger markets. Local investors are great, if not ideal, for early rounds but you may need to pursue other options. If your business venture has a valuable model and a clear customer acquisition strategy there is no reason to avoid investors from outside the city or even the state. Once the investment is successfully secured, you could always explore state-sponsored grant options as a way to extend your runway.

          Nebraska Innovation Fund Prototype Grants

          Another overlooked way to get funding is through grants. The Nebraska Prototype Grant matches investments up to $150,000. The payout is done in disbursements so it’s not a lump sum of cash. The funds can only be used to cover certain eligible categories such as employees. For more information on the Nebraska Prototype fund or if you want to apply then you can go here.

          Conclusion

          In our guide to finding angel investors in Omaha, we covered when you should raise capital, what angel investors are, when you should raise capital, and some investor prospecting strategies that will help you secure funding or at least find new business in the process! Check out our office spaces in Omaha for teams of 2-20 if you’re ready to have a space to call your own. Populus is built for growing companies like yours.

          Related: List of Coworking Spaces in Omaha

          LLC or Inc: What’s Better for a Startup?

          LLC or Inc: What’s Better for a Startup?

          One of the most common questions about starting a business is which legal entity a startup should form. If you’d like to know how to decide what kind of business to form, you’re in the right place.

          A handful of different business structures exist in the United States. While tax laws may be different from state to state, all states will recognize whichever legal structure you choose. Small business founders essentially have two options when working through how to choose a corporate structure; LLC or Inc. LLC stands for Limited Liability Company. Inc stands for Incorporated or corporation. These are both legal entities and both LLC and Inc. have their advantages and disadvantages for entrepreneurs. These will be explained in more detail in this article. You should also be aware that the legal entity and tax entity can be handled differently. For example, you can decide to have your LLC taxed like a corporation. Thus, you may decide one structure is best for legal purposes but you’d like to be taxed under another.

          Startup founders and small business entrepreneurs have a lot of important decisions to tackle as they build their businesses. One of those questions is whether you should start an LLC or an Inc for your business. In this article, we will tell you everything that you need to know about LLCs and Incs., to help you make an informed decision.

          What is an LLC?

          LLC stands for Limited Liability Company. It can be managed by a single owner, or by multiple owners, who are known as LLC “members.” If an LLC has one owner, it is referred to as a “single-member LLC.” An LLC with two or more owners is known as a “multi-member LLC.” An LLC has the ability to provide limited liability (thus the name) to its owner or members in a number of situations, though it is not as protective as a corporation or inc.

          A good number of founders often choose the option of forming an LLC as a way of creating a wall between their company’s financial liabilities and their personal assets. Forming an LLC is the simplest and most flexible way of structuring your business for protection from things like lawsuits. An option like a sole proprietorship or a simple partnership will not be able to guarantee this form of protection to the business owners and members. The LLC grants business owners flexibility to elect corporate tax rules, direct pass-through rules, or even not-for-profit status.

          In essence, forming a limited liability company structure for your business is the most flexible and approachable option of creating some legal protections for the founders. An LLC also provides your company credibility while preventing your business from getting taxed more than once. We will dive into more detail concerning the benefits than an LLC offers in our later section, “benefits of an LLC.”

          If you are looking into forming an LLC in Omaha, or Nebraska, you must submit a certificate of organization for filing, and must choose a registered agent who is “designated as the entity’s agent for service of process and official government communications.”
          LLCs are also required to file biennial occupation tax reports in odd number years, which is due on April 1st and delinquent June 2nd of the reporting year.

          What is an Inc.?

          Inc. is the abbreviation for an incorporated company, also known as a corporation. A corporation is a legal entity that is separate from the individuals or the group of people who are forming it. A corporation is formed according to State law. If you are looking to form a corporation in the state of Nebraska, owners must submit articles of incorporation for filing. Many startup founders and entrepreneurs will choose from their corporation in states that are business-friendly. For example, many businesses find Delaware to be the best state to form a corporation. Today, around half of the Fortune 500 companies have formed their corporations in Delaware.

          A corporate structure has many benefits when it comes to legal protections for owners, but it requires rigorous reporting mechanisms. It requires a board of directors who are responsible for managing the corporation’s officers and leadership. The company board is responsible for issuing stocks, handling corporate meetings, recording the time of meetings, electing directors, and conducting business by resolution. The structure of a corporation works by having corporate officers (CEO, CFO, COO, etc.) responsible for operations by purchasing shares within the business. For example, a founder may become CEO and chairman of the board for a corporation but must have other board members now involved in the guidance of the company.

          A corporation will typically offer more personal liability from debts or lawsuits than an LLC might. It is a separate taxpaying entity, which means that a corporation is responsible for paying corporate income taxes on its earnings and is responsible for its own debts. Essentially, a corporation stands alone and wholly separate from its founders. Corporations are more complicated and less flexible than an LLC, but can also be more protective and be viewed as more robust and professional.

          Related: Omaha Startup Press for 2019

          Benefits of an LLC

          There are several benefits than an LLC provides its members. Some of these benefits are described in more detail below.

          LLCs Require Less Paperwork and Documentation

          Firstly, an LLC offers members the option of forming a legitimate business, without all of the paperwork that is required for a corporation. An LLC offers limited liability, similar to the way that corporations do; however, corporations require far more documentation.

          LLCs Require Less Record Keeping

          Part of the paperwork reduction that LLCs enjoy, in contrast to corporations, is the record-keeping of annual reports. Corporations must typically make annual reports and have a substantial amount of recordkeeping requirements. LLCs, on the other hand, do not have to keep extensive records or file any annual reports. LLCs also do not have to keep records of annual meetings and do not require minute books the way that corporations do.

          LLC Tax Advantages

          One of the greatest advantages to an LLC is that they offer a good number of tax advantages. First of all, the business itself is not responsible for taxes on company profits. Instead, the LLC members report their share of business profits and losses on their personal tax returns, similar to the way that taxes are reported for a general partnership, also known as “pass-through taxation.” What this typically means is a lower tax rate on company profits because personal tax rates are often lower for founders than corporate rates. Traditional corporations, on the other hand, are taxed twice on distributions to shareholders, both corporately and individually. The tax flexibility that LLCs offer is a huge advantage and an incentive for forming a Limited Liability Company.

          LLCs Can Protect Personal Assets- Limited Personal Liability

          A true benefit to forming an LLC is that the members’ personal assets are protected. This is because the LLC is divided from its members into legal terms. An LLC is able to limit your personal liability in the case in which you, an employee, or a business partner is accused of negligence; your own personal assets cannot typically be touched in such circumstances. In the case of traditional partnerships, your personal debts and your business-related debts are ultimately the same. An LLC is able to protect your personal assets within your business to create limited personal liability for all members.

          LLCs Offer Ownership Flexibility

          Another great benefit that LLCs offer is member flexibility. There is no limit on the number of members that a Limited Liability Company is able to have, and additional members are able to purchase equity within the company. Not only do LLCs offer pass-through taxation, but they are able to do so without restricting the number or even the type of members that a specific LLC may have. It’s important to remember that an LLC can pass-through losses and profits. For some, sharing in the loss of a company can actually be beneficial to reducing their personal tax liability.

          LLCs Offer a Flexible Management Structure

          Typical corporations are structured in a hierarchical way. For example, a corporation’s board of directors will inspect those who run the everyday business, as well as company policies, and the corporation’s shareholders must conduct annual elections for potential directors. This is not the case for Limited Liability Companies, however. In LLCs, the members are able to have greater flexibility in the way that they make decisions and in the way that their business is run overall. An LLC is typically a much more efficient structure to use for a small business or startup.

          LLCs Offer Flexible Profit Distributions

          In Limited Liability Companies, it is not required for members to distribute company profits equally, or through specific ownership percentages. If a certain member contributes more time, labor and money for the company, then he or she is able to receive a larger profit share. In the case of a corporation, company profits must be shared equally depending on the types and the number of shares that each member holds. The flexibility that LLCs offer in the way that profits are distributed through members makes it a desirable company structure for many. One important application here is the separation of ownership and profit distributions. One LLC member may own a controlling share of the company, but another may receive a majority of the profits. This type of structure can allow startup founders to retain control of a company while giving investors rights to larger portions of the profit distributions.

          Related: Unique Benefits of Shared Office Space

          Benefits of a Corporation

          Corporations Offer Limited Personal Liability

          Similar to LLCs, corporations are able to provide their shareholders with limited liability protection. The shareholders of a corporation are able to protect their personal assets because the business is a separate entity. Both a Limited Liability Company and an Incorporated Company offer this benefit. Corporations typically have a wall of legal protection that is more difficult to “pierce” than that of an LLC. If you’re looking for the greatest amount of separation between personal and business assets or liabilities, a corporation is likely the best choice.

          Corporations Tax Advantages

          Forming a corporation also comes with having tax advantages, though these advantages are different from an LLC. Tax advantages for corporations include self-employment tax savings and the deductibility of expenses such as health insurance and life insurance. If you want to know more about the specific tax-related benefits that come with forming a corporation, please consult a tax advisor or an accountant in your state. These advantages can vary by state, and there are a handful of states that present very attractive tax environments for corporations. The best states to form a corporation include Delaware, Nevada, South Dakota, and Wyoming. California, New York, and New Jersey are often considered some of the worst states for corporations. For example, at the time of this article, the corporate tax rate in Delaware is 0%, while the corporate tax rate in New Jersey is 9%.

          Corporations Have a Perpetual Existence

          A corporation will not cease to exist if a business owner leaves the company, or passes away. A corporation will continue to exist and continue to do business, regardless of what happens to shareholders, managers, officers, of individual corporate directors. Corporations are known to be the most enduring legal business structure, as they continue to exist perpetually. This is a great benefit when it comes to avoiding any potential legal entanglements, that can prove to be troublesome within other types of businesses. For startups founders, this can be seen favorably by outside investors who to be sure the company can continue even if the founder were to leave.

          Corporations Offer Retirement Plans

          It is easier to establish retirement plans and retirement funds (such as 401 K) for corporations than it is for other business structures. It is important to know, however, that the taxation for corporations is generally quite complex, as different corporations will offer different tax advantages. The benefits that corporations are able to provide in terms of retirement plans may not be of the highest priority for certain businesses, for example.

          Corporations Have Easier Access to Capital

          With corporations, it is much easier to raise capital through the sale of stock. Additionally, banks are more likely to provide small business loans to incorporated businesses. Another benefit is that corporations have greater access to alternative sources of capital, which they can use to their advantage to pay off business debts. Corporations are seen more favorably by venture capital investors, specifically after the early rounds of funding are in place.

          Conclusion

          It is generally advised that you start off by forming a Limited Liability Company (LLC), as larger corporate structures can be more of a burden than a benefit, as they are more costly and more legally complex. A corporation has formal requirements that can be troublesome for small companies. When your company is ready to raise capital, you could then choose to convert your business into a corporation. This is a common scenario when companies are ready to raise significant rounds of investment.

          Corporations offer many benefits as a business form; however, if you are a small or medium-sized business, then an LLC is probably a better option for you. While both an LLC and a corporation provide limited personal liability, with an LLC, members can take advantage of the benefits that a corporation is not able to offer in the same way. These benefits include a more flexible management structure, flexible profit distributions, less paperwork and documentation, and great tax benefits.

          Related: Why People Hate Offices and Don’t Like Their Jobs

          Disclaimer: This article is intended to help business owners make more informed decisions in regards to the topic; however, please contact an attorney for legal advice and an accountant for tax advice. Populus makes no representation as a legal advisor or tax advisor.

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