The Wealth Spa

Ep #65 Turn Your Ideas Into a Money Making Brand

Posted on 05. Nov, 2008 by Elizabeth Potts Weinstein in Marketing, Radio Show

Elizabeth invites Kim Castle, Co-Creator of BrandU and Co-Author of Why BrandU; Big Business Success No Matter Your Size, who speaks about turning your business ideas into a marketable, money making brand. 

Kim shares what branding means to a small business owner, how branding applies to solo entrepreneurs and when to begin the process as well as where to draw the line between your personal and business brands. 

Elizabeth answers a listener question about the different business entities you could choose for your business, then shares her Entrepreneur’s Success Tip of the Week: Should you Participate in the Recession?

For more information about Kim and to receive her free reports including 15 Mistakes That Kill Business Success visit BrandU.

Click Here to Download the Show!

Transcript: Elizabeth Potts Weinstein welcomes small business owners, entrepreneurs and anyone who dreams of opening a business someday to this empowering hour of the Wealth Spa Radio Show where you’ll find answers to your most pressing financial and legal questions.  Now here is your host, Elizabeth.

Elizabeth:      Welcome everyone.  This is Elizabeth Potts Weinstein your host for the Wealth Spa Radio Show and today we are doing episode 65.  So we got a couple of different things going on like usual.  First our guest expert is Kim Castle of BrandU.  We’re going to be talking about how to turn your business ideas into a marketable money making brand.  Second, I’ll be answering the Question of the Week and this is actually something I was a guest on someone’s teleclass and they had a lot of questions about being a sole proprietor versus incorporating and also when should you still be a sole proprietor and what are the kind of admin headaches of incorporating.  So I wanted to talk a little bit about that practical side of what business entity you choose.  And then third as we get close to the top of the hour, I’ll be sharing the Entrepreneur’s Success Tip of the Week.  And this tip is about should you participate in the recession.  Of course, you know my answer is no.  But the idea is what strategies can you used so you don’t end up participating in the recession when you don’t want to.  Now before we get into today’s content, I want to remind you that if you’re going to miss any part of the show, you miss a link that we talked about the during the show or if want to not to remember when and where to listen to next week shows or future shows, you can always go to thewealthspa.com, that’s thewealthspa.com where you can sign up to get future shows deliver to you automatically by email, by rss, or via iTunes.  You can also listen to past shows right there on the website, read transcript of past shows right there for free.  We don’t have every show up there but we’re kind of rolling them out as time goes on and thewealthspa.com has an online magazine that has tons of resources about law, finance, marketing, mindset, business management, life balance, all kind of stuff, so it’s a great place to go if you’re a small business owner who’s really interested both in the business side of things as well as in your lifestyle that goes with it.  Okay so let me get to introducing today’s guest.  Now I have to flip over my paper and my sheet.  Okay so today we have Kim Castle who is the co-creator of BrandU and she has helped thousands of entrepreneurs around the world turn their business ideas into marketable money making brand taking it from idea to brand to market.  So she’s had tons of really big business clients like IBM, like Direct TV, M&M, Disney all of this big client but also she’s really helped small business owner too and small little solo entrepreneur with their branding also.  So she’s a co-author of “Why BrandU: Big Business Success No Matter Your Size”, a bunch of other stuff going on.  She does a lot of speaking engagement.  So let me welcome today Kim Castle to the call today.

Kim:                Elizabeth it’s a joy to be here on the Wealth Spa.

Elizabeth:      Thank you.  Yes, so Kim and I are both, well I know Kim is very much personally friend with Ally Brown and we’ve both been students of Ally Brown over the years.  So we have a lot of people in common.  So we’re talking about branding.  I want to get to the idea of, you know, you got a really big clients that do branding and we all know about, you know, like someone like a Direct TV of course they’re going to do gigantic branding of their name and we kind of have an idea about that.

Kim:                Yeah.

Elizabeth:      But what really is branding and especially to small business owners cause we’re not thinking of doing you know big brand advertising on TV, why is that applicable to us? 

Kim:                Well that’s a great question.  Because very often it’s easy as a consumer to look out side of yourself and look at all the things that we buy, you know, without thinking and thinking oh that’s a brand, my business has nothing to do with that.  So instead of putting the power of a brand to work for you, you don’t have the power of the brand to work on you.  Well you have to think if you stop for a moment and think that that business at one point started in the very same place that you’re business started from an idea and they just took the step to create it as a whole entity.  And so a great definition that I’d love to share with you in terms of really defining what a brand is because so often people confuse it.  They think, you know, there’s some people out there that will say brand is marketing.  You know your brand is your marketing and they’ll create a marketing brand or a brand is your logo and your collateral or your website or some people will go so far as to call your brand, your name on a Frisbee or a pen, right?  And so it’s confusing.  People don’t know exactly what it means.  So we have those two things going on.  It’s something big outside of them and then you don’t quite understand what it really is.  So a great understanding or a definition of a brand is the precise and pinpointed communication of your company, division, product or service, the value that it stands for and the feeling your customer consistently gets from it.  Its really about that creating that ongoing feeling that you want your customers to feel and come back to you again and again and pay you for the opportunity to feel it and take a piece of that home with them.  It’s really about every single touch point that you have on your business.

Elizabeth:      Yes, it’s very much a holistic view of your business and every little bits and pieces where yes marketing is part of that in your logo and all these things are a part of it but they’re just little pieces.

Kim:                Absolutely.  And it really does start from within the very reason of why you started the business.  It goes in to the very core.

Elizabeth:      So you know I think we can all see how this applies to a big business, but if someone is a solo entrepreneur and they’re not marketing some product that they’re going to take big, you know, they provide a service or something like that.  How does this apply to them?

Kim:                Good question.  Well you want to stand out, don’t you?  That means you have – there’s one that I read recently, there’s on average a person sees about 3,000 marketing messages every single day now.  3,000, think about that.  3,000 marketing messages bam bam bam.  It’s like raining down on us.  It’s like acid rain, right?  Just on top of that all the information.  So our brains were closing down.  We’re protecting ourselves on the inside so that we’re not overwhelmed.  On the other side of that wall, we’re craving a deeper reason to buy something because we want to buy right?

Elizabeth:      Yeah.  We have things that need to be solved. 

Kim:                We have things that need to be solved and we want to buy something that we believed in that we feel connected to.  So a great way to think about developing your brand is a way to communicate what it is you’re offering, what is your business is all about in such a precise and laser way that it pierces through that wall, jumps ahead of all that other noise that’s raining down on them and firmly sets hold on the mind and the heart and then the wallet of your customer.  So its and what’s also great Elizabeth about really developing your brand is you got to get really clear.  You got to get really really really clear about what it is and what you want people to feel and how you want them to experience it.  It’s not just about a logo.  It’s about the ongoing experience.  So when you craft it, they feel it.

Elizabeth:      Well what if somebody says well you know I just do this thing that I do.  I don’t know what it is, the feeling that I want people to have or this message.  You know maybe someone who just started out and they haven’t done enough.  So what are you suggesting – is it something that you do kind of in bits and pieces as time goes on or is this something you do before you start your business?

Kim:                Well I mean there’s two schools of thoughts.  Some people like to hit their head.  You know ops don’t work that way, ops that hurts and they hit their head for awhile and then they go oh okay now I feel strong I don’t want to hit my head anymore.  I don’t think – that takes slow for me.  It’s painful and it cost a lot of more money.  You know you’re making mistakes.  I think its far more powerful right out the get go to know exactly what it is and it really comes down to making decisions, deciding.  Yeah there’s an inspiration.  Everybody business starts from that you know like I have an idea.  I have an idea for a business.  Nobody knows the end of that point but it’s the decisions that you make from the very beginning that actually yields you the bigger box of front end in a long time.  So you know you can’t go about and guess your way through and its one of the mistakes that we see.  All the time we actually broke down.  There’s the 15 mistakes that kill business success which is why 44% make to it to 4 years.  You know million of businesses started every year, 44% survived to year 4 cause they’re guessing.  And actually I’d love to share a resources if your listeners go to www.brandu.com/wealthspa there’s a report there called the 15 mistakes that kill business success.  And guessing your way each step is one of them.

Elizabeth:      Yeah.  And I think and there’s one easy so many businesses and we all hear the statistics of how many percent of businesses failed in the first x number of years and I think a lot of the businesses that fail are doing something rights.  They are trying to deliver a good business, they’re trying to deliver a good product but they say, oh well there’s too much competition.

Kim:                Right.

Elizabeth:      And I think a lot of that is, you know, its all about perception.  Like I view myself as not having any competition because what I’m doing is so different, of course, I still do market research and stuff.  But what I’m doing is doing something so different that there’s no one who really competes directly with me and making that different really changes your perspective.

Kim:                Absolutely.  Well you were sharing in the beginning Ally Brown, one of the major thing that she experienced when she went through one of our program was – and she went through a couple of times, the first time she went through she realized she was trying to compare herself to all the other people that did what she did and was trying to be like them and all that kind of, you know those patterns that its easy to fall into.  By going through the process, she realized at the very core of what really made unique and she no longer compare herself to anyone else.  And it is challenging today with all the competition and more and more people leaving the workspace and you know developing their own business and wanting to stand out, wanting to feel that sense of freedom and creation through business and you know on top of that with all the tools and information that actually makes it even harder to focus.  But it is hard to really get clear in what it is that you do.  But you know I have to say when you have a process at your fingertip, it’s easy.  You just have to follow step 1, step 2, step 3. 

Elizabeth:      Well and the idea is once you have that, you know, here’s the message that’s your cause, it makes easy to make all the other decision.  So when you have someone doing your graphics or your logo it’s like that doesn’t go with it, you know.  It maybe pretty or whatever but it doesn’t go with it.  And everything that you do it becomes easier cause you have this core message to always touch back to.      

Kim:                Actually we even go further just like – have you ever heard TV shows, before they ever write a show they create what is called a show bible.  So that the hundreds of people that write on that show all write basically with the same set of rules.  And so what we do is we go through the process for the business where a person can do it themselves, they go through this steps, this eight steps, and they developed what we called your brand bible which is the definitive set of rules that you follow to make every decision to keep you focus, to keep consistent and to make sure your message is all pointing to the same experience.

Elizabeth:      Right.  And if you have staff, they can have it too.

Kim:                Yeah to give everybody.  You’re the leader of your business with your bible.

Elizabeth:      Right.  Yeah so it makes it more efficient.  They can do much better job the first time around.  Alright we’re ready to go to our first break.  Everyone stay in tune cause after this break we’ll still have Kim on with us talking more about all this branding stuff.  So stay in tune for that after the break.

Elizabeth:      Welcome back everyone.  Again this is Elizabeth Potts Weinstein your host for the Wealth Spa Radio and we have Kim Castle on with us today from BrandU and by the way that’s Brand with the letter U just so you don’t get confuse, kind of think of it like university.  So if you’re typing that in your computer, you don’t get lost.  Kim is on with us talking about branding.  We’re talking a lot about you know what branding is, how its different than marketing, why you are more than marketing, why its useful for us even as small business owner and maybe even more important.  You know we are talking a little bit about Ally Brown and I know this is also true for me.  A lot of us have goals of business and then we also do have kind of a personal brand too and I know Ally does that, it’s actually in a lot of cases for her.  Her branding is her personal branding.  So you know if someone as a small business owner or solo entrepreneur or who were the head of that business a very visible head, where do you draw the line between your business branding and then you as your own personal brand?    

Kim:                Great question and if you recall, if you’ve been following Ally for a few years you realize a few years ago it wasn’t that way. 

Elizabeth:      Right.

Kim:                And we distinctively made a decision and a switch based of where she’s heading in her business.  It really comes down first and foremost and I get this question a lot, how do I know whether to brand it as me or my business.  Well really there’s no separation between who you are and what you bring to your business.  However, because you’re creating this revenue source, you really want to make sure that you are first and foremost creating a business.  What you name it is second.  And I find that people get confused a little bit especially from an entrepreneurial sense, you put your heart and your soul and your blood, sweat, tears, right?  So I would guide people to first think about what the business is and you know, you view it with qualities with yourself and things that you learned in the world and things that you’ve solved in the world through your business or product or service.  And then we go through very specific languaging and impression where you develop your first impression, your lasting impression, all of that then at the very end we go, okay what are we going to name this.  And then we might say you know what its more powerful because you’re going what I would call a straight media play would be like do you see where this business is going media.  Like in your case radio or television or you know that kind of thing and you have the personality to hold that.  Then I say lets cap it off with your name because there’s going to be all this different divisions underneath it like Martha Steward.  However, don’t think about that piece first.  I mean you want to know the vehicle where you intent to in 5 years or 10 years or where you see you standing on top of the empire, you know.  But it’s more important to get clear about what the structure of the business is.  Because you’re really making a business one that we would call deeply personal. 

Elizabeth:      So someone who has been in business for a while and they have a website and a logo and they’ve been doing marketing and stuff.  They know it’s a little bit all over the place, and they don’t feel like they have a piece of brand, you know, when they start working on branding, are they going to have to change every single thing and is that going to be a problem or how does that fit into the established business owner?

Kim:                That’s a great question.  I often called that an entity crisis.  People don’t know, you know, they wonder why their customers can’t find them.  They can’t find themselves.  So the answer is I would not be the one to tell you that you have to change everything especially if you have any kind of cue in the marketplace.  What I would do is let’s developed the rules and then check again.  Okay so if this is the impression that you want to make, does your current messaging, name, tagline, logo, image, feel, does it really represent that?  If not, then let’s make tweaks and let’s grow it up.  I find sometimes that somebody with guided intuitively to design something like a logo or a message but they didn’t really know why, they just kind of guess at it.  And then when they build the infrastructure of decision underneath it, they go now I know why I chose this and it has so much more power and they didn’t have to change it.  So it really depends but very often I find that things have to change a little bit just to hold the space of where the business is growing.  So it doesn’t necessarily have to change.  Just be open to defining the rules and the guiding yourself by those brand rules.

Elizabeth:      So if someone has a business and they already have some of these whatever collateral things in place when should we be recommending to them, yes, you need to look in to doing some branding or are there certain people who aren’t ready for that.  Where does it fit into the person?  

Kim:                Great question.  Yeah there is definitely I mean I know I’ve been doing this work who I shutter to say I’m going a face frame when I say this 18 years and I know the power of building a brand is vital to any business especially today.  There are people that aren’t right for it.  There’s people that are still not sure if they want to be in business.  You know they’re sort of guessing at it or they do want to hit their head and they get strong by hitting their head where they feel they enjoy figuring it out like step by step in terms of ah that’s not it.  They want to guess their ways.  Those are the people that would be great starting their business as a brand because honestly it does take some thought and some effort and some commitment to go I’m going to plan my business here and I’m going to plan it deep so I can build it big.  That said I’d say when a person has gotten to a point where they realized their knowledge, their expertise is worth getting out in the word in a big way.  And I say big meaning you get to decide how big.  It could be advertising on a Super Bowl or it could just be helping people in your zip code in a big way.  You get to decide that but it’s when you step up and realize what I have is valuable and it can impact people’s lives and I want to make a lot of money doing this.  And I want to create a business that really resonates through people and do it easily and quickly, then its time to develop a brand.

Elizabeth:      And something going back to what you just said.  There maybe people listening.  I know some people who are who they said well you know I don’t want this multimillion dollar business.  So in that case is branding is going be helpful for me even if I want to have a small at home kind of business.

Kim:                Sure.  If you want to stand up in the minds and the heart and ultimately the wallet of your customer because you know the funny thing is people judge your business on par with the brands that they buy everyday.  Even if they’re not aware they do it emotionally.  I’ll give you an example.  If you’re driving down the street and you see Nike in one side in one side and you see Bob Shoe Bonanza on the other side.  Where are you naturally going to want to go to?

Elizabeth:      Right.

Kim:                You’re going to the business that seems and feel whole, and established, and experiential.  So your brand in your business I definitely judge no matter how big you want it to be, is definitely held in that perceived value on par with the brand that people buy everyday.

Elizabeth:      Yeah its funny how often how someone who after going my website and things would be like well I thought like you have like a building.  That would be like table in my living room.

Kim:                Right.  Well you know what it’s really and it has nothing to do and I always tell people when I talked about big business success no mater your size, it’s not about how many people that work for you, how much money you make, how big of a building you have, its really how big of an impact that you want to have in people’s lives.  And that could be a smaller impact on million of people’s lives.  You can have a big impact on just a few people’s lives.  That is the choice that you get to make and the real kicker is and you probably know this as well is the bigger the impact the more money you make.  So it really is about the impact that you know you’re business can have on people’s lives and when you’re ready to do that and build it as a solid business, then its time to step on your unique powerful path.

Elizabeth:      And it’s also, its not – when you want to have the branding down, then its not like you make more money because there’s more perceived value but it’s much easier because you can find the people who resonate with you and other people can promote you easier because it’s obvious what your message is and what you do.

Kim:                And you find all the different extension that dove off of your business.  You know you have most people start in that business from an idea with no clear vision, no way to understand where the real money is coming in on like the revenue model, the structure, they just have all this different ideas that are competing like hungry children.  Feed me.  Feed me.  And they have no way to focus to actually make it happen.  And I really believe that’s why less than 44% or only 44% make it to the year 4 is because people don’t know how, they don’t know where they’re going.  They don’t know who their business is.  Why people should really buy it and what steps to take to make it happen.  

Elizabeth:      Yeah and there’s a lot of us who are these kind of crazy entrepreneur, bright shiny objects people and I know I have my journal which I’m now going through a new journal like every 5 months cause I write all the stuff in it and having, you know, I have this zillion business ideas and I can launch a new website every week if someone let me do that, and you know all the different info products you can buy and there’s so much stuff out there that if you don’t have a core message with the ideas of your business then you could just never get anything done really.

Kim:                Absolutely and one of the big changes again going back to Ally is when we know that she was ready to step into that shift, first thing we did is we sat down and we mapped out her universe.  Not just what she was doing right this moment but where she really wanted to grow to and really firmly anchor the business from that place really take that idea, I called that expanded gas state when people get high on just the possibility of one little thing.  Getting high on gas kind of thing and we make that tangible in a very solid vision that people can attach to.  For example like BrandU we’re creating one million entrepreneurs who are successful and whole so that they can make a difference in the world.  Every business, everything we do brings us back to that vision.  Then we mapped out a solid structure so that you can hold those bright shiny objects, all those different ideas, and you got oh you know what this goes in this room of the house.  Oh, I’m going to do this piece first cause the money is going to flow from here and that piece is going to be over here and we actually structure it all out.  And then from there we create a release plan so that you know exactly how to stay focus to make it happen.

Elizabeth:      Right.  So hearing all that stuff, we got a couple of minutes before the next break, I want to give you a chance to share with everyone how they can get more information and how to find out more about this branding stuff.

Kim:                Wonderful.  I’d love to share that.  If what I’m sharing make sense to you, the thing that I would do to first step in to getting your brand, to really solidly make your brand is let’s sit down and really define your business.  Define the structure of the business.  We called that power path and you can find out all about power path and actually get a free subscription to my weekly newsletter called Powerplay where I do, I have a video coaching piece and I share a lot of examples and strategies and tips.  You can get all of that at BrandU, that’s B-R-A-N-D the letter U, .com/wealthspa.  And each week I answer question.  There’s just a whole lot of resources there including the 15 mistakes that kill business success.  You can get all of that free at brandu.com/wealthspa and I’m just overjoyed to be here and I just love what you’re doing.   

Elizabeth:      Great and I want to let everyone know that you guys don’t just help big business, you have a whole bunch of, the big sweet of things, going all the way to very small business and there’s something there for everyone.  Of course starting with the eZine, it’s great cause it’s free.

Kim:                Actually our focus is entrepreneur because you know the entrepreneurs we believed are the businesses of tomorrow.  We’re just showing you how to develop your business on par with the big brands so that you can grow up and be the big business or whatever size business you want tomorrow.

Elizabeth:      Right.  However you define it.

Kim:                Yes, exactly.

Elizabeth:      Okay.  Well thank you so much for being on the show today, Kim.

Kim:                My absolute joy to be here.

Elizabeth:      Great.  Everyone we’re going to our next break.  After the break I’ll be answering a question or a couple of questions about being a sole proprietor versus being incorporated or LLC.  And then as we get close to the top of the hour, we’ll do the Entrepreneur’s Success Tip of the Week.  So stay in tune for all of that after the break.

Elizabeth:      Welcome back everyone.  This is Elizabeth Potts Weinstein your host for the Wealth Spa Radio Show.  And in the first half of the show, we have Kim Castle on talking about branding.  Let me give you that link one more time, that’s brandu.com/wealthspa.  Get a bunch of great free tips, she has an eZine.  I think she also had her 15 mistakes that kill businesses so go ahead and check that out.  If you’re resonating with that branding information we’re sharing.

                        Now let’s get into the question of this week and this question come from a teleclass I was just on recently where I was answering all these questions and so I knew if they were asking these questions, I’m sure you guys have these questions too.  And I talked about this a number of times, the different kind of business entities you can have.  And here of course this is law that depends on where you’re located.  So I’m as a lawyer here in the United State, I’m talking about law that’s here in the United States.  Most other countries have similar rule but you’re going to definitely have to check out the rules for your own country.  And also these rules are actually even state law rules in some cases not the federal tax stuff but the business incorporation stuff is actually based on state law.  I’m here in California.  I’m a lawyer in California so I know California better than anywhere.  The rules are pretty much similar but they’re not exactly the same.  So whatever state you’re in, you going to want to find out the rules for your own state so that little disclosure cause you know I’m a lawyer so I got to give you a disclosure at the beginning.

So what I want to talk about is that most small business owner who starts a business especially if it’s a solo entrepreneur starting a business as an individual; they started as a solo proprietor.  That’s the default rule.  So if you don’t do anything to make anything in your business happen and you’re one person you’re automatically a sole proprietor.  So what does that mean?  What’s the good and bad part of that?  Well the good part about that is you don’t have to do anything, right?  You don’t have to pay money to somebody to be a sole proprietor, you just are.  You don’t have to file a form.  You may have to do a DBA in business, you know, business licenses and things like that.  But here it’s just about the business entity itself, you don’t have to do anything.  Your tax is relatively straightforward because the thing is as a sole proprietor you and the business are the same thing.  So to do your taxes is your Schedule C, here in the United States, you’re putting all your cost to your business, all the revenue.  Did you make a profit?  Did you take a loss?  It’s pretty straightforward.  At least as straightforward as any taxes can be.  Now as a sole proprietor that’s one of the big advantages is that simplicity.  Well the big detriment of being a sole proprietor is the same thing.  You and the business are the same thing.  So what does that mean?  That is if something bad happens to the business, it also happens to you.  So when you sign a contract, when you take on debt, whatever it is, you have a client visit your house, if something bad happens for any of those transactions, for any of those occurrences then it also happens to you.  So that person slip and fall, they’re not just suing the business, and the business isn’t just liable, they’re suing you and they’re going to try to get money out of your house and your savings account.  If a contract goes wrong and if a debt goes wrong and you can’t pay up the debt or the business can’t pay up the debt, you get to pay off the debt even if it says the name your business.  This sometimes is a misnomer where people think well I have a business that has the name of my business on it.  Well dude I don’t care.  You’re sole proprietor.  You’re liable for that credit card.

Now going back to the benefit of being sole proprietor is the fact it’s so simple.  So as soon as you want to take a step up to being some sort of incorporated entity then it makes things a little more complicated.  And that’s really what comes down to being an issue for people.  There’s wonderful benefit of taking that next step up.  But there’s also complexity.  So what are the benefits?  Why would you ever want to be a different entity?  Well the idea is there’s two reasons.  One is that when you make your business be a different entity than you, it’s either an incorporation or an LLC from most people then it’s different than you, right?  So if that business can sign its own contract.  I mean in reality you’re signing the contract but you’re signing on behalf of that business.  That business can take on its own debt.  That business can be liable for anything that happens on its own two feet, the asset of that business.  And that business can get its own insurance to cover itself, etc. etc.  So if you’re doing stuff right, then if they get sued, it wouldn’t be you on the hook, it would just be the business.  And I say if you’re doing stuff right, I’m going to talk about that in a second.  Why a lot of people don’t.  The other advantage of why you might want to form a different entity is for tax purposes.  Now this actually doesn’t occur to a lot of people, not helpful for a lot of really really small business owner.  If you’re a small business owner, you’re making 20-30 grand a year or you’re making nothing a year, less than nothing a year, a lot of time being a sole proprietor is better because the cost of running a sort of separate legal entity thing of being a corporation or being an LLC, a limited liability company, those admin cost will outweigh any tax savings you would have.  In some cases, you would actually pay more in taxes.  When you’re business is making a couple hundred grand a year, maybe you got some employee’s etc. then you may be able to structure things differently so you can save money on taxes.  Now I can’t go on to the exact details cause its really is a case by case basis.  And its one of those situation where, you know, if you’re making a couple hundred grand a year, theoretically you’ll be able to pay able someone to give you the answer, okay, and that is how I do it.  Now one thing to think about though and this is the thing that some people you know it hard to get your brain around is that you have a separate entity for liability purposes to have it still be taxed like a sole proprietor.  So example, take me for instance, my official business entity is Potts Weinstein LLC.  But I had it set up for its tax as a sole proprietor.  So my taxes are still pretty easy.  It’s just a Schedule C.  I mean as easy as tax could get.  Its still Schedule C straightforward but I have a separate entity for all that legal liability thing that I was talking with you about.  So just to be aware of it, you can do both things differently.

Now the third benefit.  This isn’t really a legal thing is that you can do it kind of like it’s a marketing purposes you could say.  You know if you have a separate legal entity, it may help you in doing business, you look more like a real business because of that LLC or Inc. after your name.  So it may actually help you especially if you have a business where you’re working out at your home, and in that case you may have a limited perception of your business that you’re not as big as somebody else or “real” as somebody else and having that incorporation is very helpful.  Alright so what are the issues, you know, if you become incorporated either as a limited liability company or a corporation, you do have more hoops to go through cause there’s more admin cost.  Now it depends upon whether you’re an LLC or whether you’re a traditional corporation.  Some of the thing you should be doing are things you should be doing now.  So things like keeping a separate checking account, keeping a separate debt, a separate credit card, keeping really good book.  Not just using money out of business checking account to buy your grocery or using your business PayPal account to buy Christmas present for your cousin.  You want to keep everything separate.  And all money only comes out when it comes up to you in your draw as in profit, and money only goes in if you give the business a loan or if you give the business additional capital.  It’s shouldn’t be this all this going back and forth and stuff.  Now the other things that are going to have to do different as either corporation or LLC is that once it’s a business entity, it can have things that its supposed to do on its own.  So instance an LLC is it wants to open up a checking account.  If it wants to have the owner gives it a loan.  It needs to have a resolution by the LLC to do so.  Now its kind of silliness because you’re like passing a resolution and you’re giving yourself permission to do something and you’re the one passing it, but that’s the formalities you need go through.  Same thing with the corporation, with the traditional corporation you have to have four meetings which maybe like you and your spouse and your sister and take minute and at those meetings you have to make decisions about whatever the business is going to do.  So the idea is that only by doing those formal things are you going to get the protection of being incorporated.  We’re about ready to go to our next break.  After the break I’m going to go through a few things you need to think about before you go ahead and decide to upgrade to an LLC or corporation and then we’ll do the Entrepreneur’s Success Tip of the Week.  So stay in tune for all that after the break.      

Elizabeth:      Welcome back everyone.  It’s Elizabeth Potts Weinstein, host of the Wealth Spa Radio Show.  Right before the break, I was talking about being a sole proprietor, LLC, being incorporated plus and minuses.  I want to share with you what you need to think about before you upgrade from a sole proprietor to an LLC or corporation.  You know the first thing you think about how much you’re making now, how much money do you plan to make.  Second you need to think about how much time are you going to spend to deal with all the things that need to be dealt with, all those little added things.  Now I know I have friends who incorporated and the bookkeeping involves – they were still doing their own bookkeeping and the bookkeeping for the incorporation were just a complete mess and so they went back to being a sole proprietor.  So you need to think about do you have the time or the money to outsource all that stuff.  Is not too complicated but its there.  And then third, you need to start figuring out all the places you would have to change.  It’s kind of like if you’re a woman you get married and change your name.  You can change your name like a billion different places.  Same kind of thing if you change your corporate identify, if you go from a sole proprietor to an LLC or incorporated.  You have to change all those bank accounts, credit card accounts and loans.  You got to change every contract that you have with your vendors and your suppliers and your staff and your clients and customers.  If you’re affiliate with people, you’re going to change those.  You are going to need to change all you different collateral and your business card and your website.  So making that list of all the things you’ll change so if and when you do go ahead to be an LLC or corporation then you can hit the ground running and get all that stuff done.  Here’s the deal, if you make yourself be an LLC or a corporation and you don’t change all that stuff and you don’t keep thing separate etc. etc. you don’t get the benefits.  And it’s a big waste of time.  So only do this when you’re ready to make all those changes.  Alright so that’s that talk.

                        Now lets get into the Entrepreneur Success Tip of the Week, this week’s tip is a few questions.  Should you participate in the recession?  Of course I’m going to say no.  You don’t want to participate in the recession.  This is a very difficult thing to do though because we’re so inundated by the news and by our friends and family and people in the internet and everywhere we go its talking about whatever horrible thing happened to the stock market yesterday or how bad the economy is and whether or not we’re in a recession and how bad that recession is going be and long it will go and what’s going on with the political stuff going on.  So as all those things inundated us all the time as well as you may have practical things going on with your business going on with your business.  Maybe people aren’t paying you on time. Maybe you feel like its getting hard to get client or customers.  So what can you do?  So let me give you a couple distinct tip.  The first tip is turn off the gosh-darn television.  If you were those people who sit in there and watching CNN or Fox News or whatever your choice is all day long, you kind of have it on the background at your work to keep you company, turn off that television.  You don’t need to be inundated with all that negativity.  Here’s the thing.  Those people on the TV job is to get the most rating possible within reason.  And how they get rating is by creating fear.  So people get scared and they feel like they need to watch it more.  You don’t need to participate in that.  Okay.  You can read a couple of headlines, read the front page of CNN.com which is what I do once a day and you get information for you to proceed in your life.  You don’t need to wallow in the stuff.  You just need a little bit of the basic news so you’re informed.

Second, you may want to go to your business and cut the size.  Now I’m not saying cut your marketing budget or lay off everybody.  People do that kind of stuff and then they’re business ends up going under cause you know what you need those people and you need that marketing to make money.  But there maybe things in your business that while you’re doing really well and everything was honky-dory you just kind of didn’t worry about.  But now it’s a great time to go back and cut that stuff.  So what do I mean?  So for example, you may be paying for stuff you forgot you bought.  I did this.  I sign up for this like monthly program and I don’t use it and I forgot to cancel.  So all those stupid things like that, that you sign a form that you don’t need.  You may have people owe you money and you haven’t collected or bill them.  I do this too.  Well send someone an invoice and for some reason the reminder didn’t go out or whatever happened or maybe their credit card bounce or whatever or we haven’t gone back to really make them pay.  So going back and collecting on people who own you money and making sure that people are paying you on time.  Cause I know a lot of people are bouncing card.  And a lot of businesses are taking longer to pay on invoices.  So going back and making sure people paid you who owe you money.  And here’s another thing, check the statistics on all your advertising and marketing.  Now I don’t say don’t cut your overall budget.  Okay.  Actually in many cases you may want to increase your budget if you humanly can cause everybody else is cutting their budget so all you go to do is stay the same or increase it then you’re only one in the advertising and the only one doing the marketing.  It’s a great place to be.  But go back to all those marketing area and look at your statistic.  What’s your conversion rate for that big ad you take out in that magazine, how many people use it to your website or call in the number?  And if you’re not tracking it, now start doing that.  Start tracking that information.  For those advertising you do online, what’s the click through rate and how many of those people buy.  It may be that you’re putting all your money into marketing and advertising that some of it is bringing you a lot of business and some of it is junk.  And just like dropping the junk, putting that money that you were investing in all the good marketing, you will increase your revenue right there without increasing your cost.  So go back to that marketing to the things you’re paying for and trim the sack, things that aren’t going to help you make more money.

Number three and this is actually on your personal side.  Rebalance your investment portfolio back to your target asset allocation.  Now I’m not saying sell your stocks.  I’m not saying do anything wacky with your portfolio.  If you’re going go look at your portfolio, at your 41K or IRA whatever retirement accounts you have, whatever tax deferred account you have and you’re going to freak out, then don’t even look at it.  Okay.  You can give yourself a couple of weeks.  What I’m asking you to do though is if you’re going to be able to look at it and not be upset knowing that it’s for the very long term, it’s for 10, 30, 50 years out from right now.  Go back and just do a nice rebalance.  You don’t need to sell everything and go into bond or do anything wacky wild.  All you need to do is get back to the target asset allocation.  And if you want more information about that, I’ve written about it past eZine article but I think there maybe also articles on thewealthspa.com about how to do that kind of stuff.  Number four is just get back to work.  You know Kim and I talked about this early on the call about the statistics about how many businesses go out in business in x number of years.  And really I have a theory that a lot of success in business is just to be the one who survived.  This recession and any downtime in the economy, it does separate the weak from the chafed and there’s going to be a lot of businesses who fail.  And they didn’t have the fundamental to pull through or couldn’t survive the downtime for whatever reason. As a small business owner, you are uniquely situated to being an amazing position the second things start to turn around.  That may be next month, it maybe six months from now.  But if you’re the only one left when everything starts to turn around then you have no competition.

So I recommend is just do business as usual.  Just proceed doing what you would have done anyway.  Everyone is having a nervous breakdown and freak out and shut down or whatever, that’s fine.  Because when things turn around which will happen probably even sooner than you may think, then you’re the one that everyone will be coming to spend their money.  So have that faith that things will turn around.  Turn off the television.  Don’t listen what they have to say.  Just do the things that you would normally would have done.  Maybe turn some of the stat.  Rebalance the portfolio.  Do something that you that should have been doing really anyway and just proceed forward in your business.  Cause the thing is a small business turns around faster than anybody else.  You look at economic fluctuation.  When the economy turns around and starts to increase, starts to go up again which always happen, the first businesses that do well are the tiniest businesses of all cause we’re the fastest.  We can turn things around super fast.  We can go in different directions.  We are the one to feel that they got turn first.  So all you have to do is be there and be ready and be set to take that upturn.  Okay so that’s my little anti-recession, not anti-recession but you don’t need to participate in your recession talk.

                        Okay, I just wanted to remind you if you miss any part of the show, if you want to listen to future shows and don’t have to remember when and where to be, if you miss some of the links that we talk about in the show or you want to read any of the past shows, you want to read a transcript of the past show, you can always go to thewealthspa.com.  Also on there you can learn how to be guest on the show either if you’re an expert, you can be a guest expert on the show or you can submit a question to be answered on the show.  So you can get some free legal or financial or business advice from me or one of the guest whoever I happen to have on, if that’s an appropriate question to have answered by that particular guest.  And also on thewealthspa.com I’ve tons of other resources for you.  So if I talk about something in the show like sole proprietors or trademarks or copyright or certain kind of marketing or branding and you want more information about that, you can always go to thewealthspa.com in the top right corner there a place to do a search.  You can search for that word, search for branding, search for trademark, whatever it is and you bring up a whole bunch of article, past radio shows, videos even, a bunch of information and everything on there is free.  And of course if you want get more into this you can always go to thewealthspa.com and learn how to get a copy of my book “Grow Up! Strategies”, so thank you so much for listening to the Wealth Spa Radio Show today and I look…

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Tags: branding, elizabeth potts weinstein, Kim Castle, Marketing