Success Tips

Start-Up Steps

Monday, August 03, 2015
  1. Verify that your company name is not already in use by another firm. Register your Trade Name with the Secretary of State .

  2. Evaluate and choose your legal structure, then register your company on line with the Secretary of State.
    1. Trade Name/ Sole Proprietor: $20.00
    2. Trade Name for a Non-Reporting Entity (e.g., a general partnership)
    3. C Corporation: $50.00
    4. S Corporation (First, you set up a Corporation with the Secretary of State, then elect to be an S Corporation and file Form 2553. The election permits the income of the S Corporation to be taxed to the shareholders of the Corporation rather than to the Corporation itself.): $50.00
    5. Limited Partnership: $50.00
    6. Limited Liability Company (LLC): $50.00
    7. Limited Liability Partnership (LLP): $50.00
    8. Limited Partnership Association (LPA): $50.00

  3. Request an Employer Identification Number (EIN) with the IRS (800) 829-4933 M-F 7:30 am -5:30 pm or apply on line at The only legal structure that does not need EIN is a sole proprietor with no employees and no independent contractors; he/she is in business by themselves. The sole proprietor uses their Social Security Number as the ID number.

    An EIN is a nine-digit number that IRS assigns in the following format: 00-0000000. The IRS uses the number to identify taxpayers who are required to file various business tax returns.

  4. If you are selling a tangible product apply for your state sales tax license and also a local sales tax license at with Form #CR0100 and #CR0101, the instructions. This is a two-part form used to set up both sales tax and state income tax withholding for yourself and your employees. If you are only setting up employees or only setting up for sales tax, you use this form.

  5. To set up Colorado unemployment, apply online at the Department of Labor at .

  6. You do need to check on state licensing requirements. Visit and click on the Occupational/Industry Licensing Database.

  7. At the local level, contact all the cities and counties where you are doing business and ask about licenses they require.

Call the West Central Small Business Development Center at Western State Colorado University for free and confidential business consulting at 970-943-3157, or contact the Small Business Navigator when you are online at 303-592-5920 x5 for free one-on-one guidance.

Numbers That Matter To Your Banker

Monday, July 27, 2015

Here's a secret: Bankers don't actually read financial statements -- at least, not at first. Here's what they do look at.

If you've applied for a loan, it may surprise you to learn that a banker can look at your company's financial statement and know, in a matter of minutes, whether it's likely to fly. Though the final decision will obviously involve more analysis -- largely to verify and document the initial assessment -- that first eyeball test is aimed at answering three questions: Can you pay? Will you pay? What if you don't pay?

The numbers that determine the answers are probably not the ones you think. Instead, the bank's credit department crunches your statement though a program that produces ratios based on key income statement and balance sheet numbers. These ratios are what matters first.

If you want to secure a loan, it's important to understand the ratios, what they say about you, and how you can make them work in your favor.

Can You Pay?

The primary ratio a lender uses to determine whether you can afford a loan is the "cash coverage ratio." It's calculated by taking your net income and adding back depreciation and amortization, which aren't cash expenses. That gives a rough indication of your net cash flow -- what's left over after the bills are paid. Then that number is divided by the annual payments on the proposed loan to arrive at the cash coverage ratio.

Bankers are looking for a ratio of about 1.3 or higher. So, if the payments on the new loan total $20,000 a year, a net cash flow of $30,000 would make the grade.

A secondary source of cash flow, such as your spouse's income or other personal income, can be taken into consideration if the cash coverage ratio shows the business can't support the debt on its own.

Will You Pay?

How you've handled debt in the past is considered a good indicator of how you'll handle it in the future. Both your personal and business credit score (from Dun & Bradstreet) will play a big role in answering this question and your "debt to worth ratio" will weigh heavily on the answer, too. It tells a lender how much of you is at risk. If you're heavily financed with other people's money (not including investors), you'll be considered a high risk.

The debt to equity is calculated from the balance sheet. Divide shareholders' equity by total liabilities. Lenders will want to see that your liabilities (debts) are no more than two or three times your equity. So if you have $50,000 of equity, you should have no more than $100,000 to $150,000 of debt.

What If You Don't Pay?

If the worst happens, a lender wants to know there are tangible assets that can be liquidated to pay off the loan. Hard assets of equal or greater value collateralize the majority of small-business loans. .

Let's say you bought a piece of equipment with $75,000 of hard-earned cash last month, and today the lender assigns a collateral value of just $45,000. What's with that? The difference is because if the bank has to sell it, it'll rarely collect its full value. The following rules of thumb will give you an estimate of the value a bank assigns to various types of collateral:

  • Accounts receivable: 20% to 50%
  • Inventory: 50% of Wholesale
  • Furniture and equipment: 10% to 80%
  • Real estate (business or personal): 70%
  • Cash/investments: 80% to 90 %
  • Vehicle: 70% to 80% of Kelly Blue Book Wholesale

Whether your collateral is valued at the high or low end depends on its quality and marketability. In the case of accounts receivable, the quality of your customers, their credit ratings and their payment history, will determine the collateral value. With inventory, it depends on what it is, where it is, how old it is, and whether anyone wants it. Anything you can do to prove the salability of your assets will help your collateral case. Just be sure your lender knows what you know.

The final loan decision will take into account many factors, financial and otherwise, but to a lender, ratios are like the jacket copy on a book. If they don't read well, your lender may not bother to look any further.

For assistance with your loan application, calculation of cash flow and profit and loss projections, and the important ratios, contact the Small Business Development Center to set up an appointment for free and confidential, one-on-one consulting.

LA Internet Boot Camp Tip Sheet

Monday, July 20, 2015

Keep on blogging. Google is looking for content that is:

  • Fresh
  • Relevant
  • Unique


Find articles in your clients' areas of interest - read them and paste them into your blog with your comments, such as, "Note that so and so is saying such and such which spells out the steps easily for your personalized plan..."

If you are writing articles, find out the word count from Ezine and submit your articles to their editors. Don't worry if you get rejected, you can always re-write and re-submit.

Tube Mogul:

First create your video and upload it to YouTube, then use TubeMogul and free services that sends your videos to many other top video and social networking sites. You can also post a video reply on YouTube to create social currency (and your website is recorded again).


Create content rich PDFs and place them on your website for visitors to download for free. Let your customers know what you are about and what value you offer without capturing their email first (that is another step). Rather than reading about you, they interact and print - and now they have all your contact information.

Video Interviews:

Create video interviews to add credibility to your website. Use a format such as, "I saw this problem in the world and I know I had the answer." You can have colleagues interview you.

Remember, success is learning and then doing, over and over and over!

Independent Contractor Verification

Monday, July 13, 2015

Mistakenly classifying an employee as an independent contractor can result in severe fines and penalties from the IRS and the Colorado Department of Revenue, as well as jeopardizing qualified benefit plans for existing employees. Every state is different regarding independent contractors and Colorado's laws are from the 70s.

The following questionnaire is based upon the 20 factors used by the IRS to determine whether someone is an employee or an independent contractor. In theory, you should only be concerned with the results of the work, not the way in which it is performed . These are intended only as a guide; the importance of each factor will, of course, depend upon the individual circumstances. If you answer "Yes" to all of the first four questions, you're probably dealing with an independent contractor; "Yes" to any of questions 5 through 20 means your worker is probably an employee.

  1. Profit or loss
    Can the person make a profit or suffer a loss as a result of the work, aside from the money earned from the project? This should involve real economic risk--not just the risk of not getting paid. For instance, a bidding process involves this type of risk where the contract quote needs to cover any expenses, materials, overtime, and unexpected contingencies.

  2. Investment
    Does the person have an investment in their own equipment and/or facilities used to perform the work? The greater the personal investment, the more likely it is independent contractor status.

  3. Works for more than one person or firm
    Does the person work for more than one company at a time? This tends to indicate independent contractor status, but isn't conclusive since employees can also work for more than one employer.

  4. Services offered to the general public
    Does the worker offer services to the general public? Advertising show independence--yellow pages, website, etc.--or even a dated list of clients, with scope of work summary even better.

  5. Instructions
    Do you have the right to give the person instructions about where, when, and how to work? This shows control over the worker.

  6. Training
    Do you train the person to do the job in a particular way? Independent contractors are already trained and don't require your firm's training.

  7. Integration
    Are the person's services so important to your operations that they have become a necessary part of the business? This may show that the worker is subject to your control and is an employee.

  8. Services rendered personally
    Must the person provide the services personally, as opposed to delegating tasks to someone else? This indicates that you are interested in the methods employed and/or that specific person, and not just the results.

  9. Hiring assistants
    Do you hire, supervise, and pay the person's assistants? Independent contractors hire and pay their own staff, including employment taxes.

  10. Continuing relationship
    Is there an ongoing relationship between the person and you? A relationship can be considered ongoing if services are performed frequently but irregularly, or if the person was an employee within the last 6 months, performing the same duties/type of work for your firm.

  11. Work hours
    Do you set the person's hours? Independent contractors are master of their own time, allowing them to complete a project ahead of schedule.

  12. Full-time work
    Must the person spend all of his or her time on your job? Independent contractors choose when and where they will work.

  13. Work done on premises
    Must the individual work on your premises, or do you control the route or location where the work must be performed? Answering No by itself does not mean independent contractor status as the nature of the scope of the work must be taken into consideration.

  14. Sequence
    Do you have the right to determine the order in which services are performed? This would show control over the worker.

  15. Reports
    Must the person give you reports accounting for his/her actions? This may show lack of independence.

  16. Pay schedules
    Do you pay the person by the hour, week, or month? Independent contractors are generally paid at the completion of the job or phase, or on commission, although by industry practice, some are paid by the hour.

  17. Expenses
    Do you pay the person's business or travel costs? This tends to show control. Expenses should be built into the quote for services if an independent contractor.

  18. Tools and materials
    Do you provide the person with equipment, tools, or materials? Independent contractors generally supply the materials for the job and use their own tools and equipment.

  19. Right to fire
    Can you fire the person? An independent contractor can't be fired without subjecting you to the risk of a breach of contract lawsuit.

  20. Right to quit
    Can the person quit at any time, without incurring liability? An independent contractor has a legal obligation to complete the contract, even if it results in financial loss.

Helpful Websites for Entrepreneurs

Monday, July 13, 2015

Online Import/Export Resources

Monday, July 06, 2015

Overview of Exporting

Free Online Market Research

Free Templates for Export Business Plan

Export/Import Education

Product and Service Marketing

  • SBDC Global : Free site for international product and service promotion; solicit prequalified trade leads; site links the 750,000+ clients of the US, Mexican, Salvadoran and Colombian SBDCs
  • : View and solicit export opportunities
  • Export USA : Print magazine distributed to 178 countries, official government showcase for American-made products and services; low-cost advertising available

In-Person Import/Export Resources

Monday, June 29, 2015

Office of Economic Development and International Trade (OEDIT)
Free consulting; Geographically-focused experts assist with market research, international distributor and client connections; Sponsors trade shows, lead trade missions and facilitate meetings with international buyers; Provides mentorship program, export development grants and network of global consultants

Requirements: Export-ready, currently exporting (Tier II, III)

Contact: Sandi Moilanen, International Division Director
(303) 892-3857,
1625 Broadway, Suite 2700 Denver, CO 80202

U.S. Export Assistance Center (USEAC)
Free consulting, fee-based programs; Industry, product specification, regulation and customs specialists; Hosts Gold Key Program, a paid distributor, partner or joint venture-matching service and travel assistance; Provides primary market research from U.S. Commercial Service officers overseas to establish connections or gauge market potential

Requirements: Export-ready, currently exporting (Tier II, III)

Contact: Suzette Nickle, Senior International Trade Specialist
(303) 844-6623 x216,
1625 Broadway, Ste 680, Denver, CO 80202

World Trade Center Denver (WTC)
Education, membership-based services; Only trade resource for importers in Colorado; Courses range from Export/Import 101 to Trade Finance; International Trade Certificate available; Internationally-focused networking and databases; Certificates of Origin and Free Sale, market research and international trade statistics provided free to members

Requirements: None; Works with all levels of export/import-readiness (Tier I, II, III)

Contact: Michael DeJager, Director of Education
(303) 592-5760,
1625 Broadway, Suite 680, Denver, CO 80202

Small Business Administration Export Finance
Free trade finance consulting; Provides exporters with financing solutions including working capital and lines of credit; Helps minimize risk of nonpayment

Requirements: Export-ready, currently exporting; No loan minimum, limit $5 million (Tier II, III)

Contact: Bryson Patterson, SBA Export Finance Specialist
(303) 844-6623 Ext. 218,
1625 Broadway, Suite 680, Denver, CO 80202

Export/Import Bank
Free consulting; Provides export assistance through working capital, export credit insurance, and international buyer financing for new or used capital equipment

Requirements: In business 1 year; 1 FTE; Positive net worth; Exporting U.S. made products or services (50%+ U.S. parts and labor or services); No maximum loan size (Tier II, III)

Contact: Joe Ringer, Regional Director
(281) 721-0467 office, (713) 301-1749 mobile,
1880 S. Dairy Ashford, II, Ste.405, Houston, TX 77077

Colorado Department of Agriculture
Free consulting; Provides research for all agricultural commodities; Export development includes shipping, logistics and market research assistance; State and federal trade missions and activities; MAP funding to help promote exports to 50% of eligible expenses

Requirements: Export ready or currently exporting (Tier II, III)

Contact: John Addison, International Marketing Specialist
(303) 239-4484,
700 Kipling Street, Suite 4000, Lakewood CO 80215

Creating an LLC Operating Agreement

Monday, June 22, 2015

Like corporate bylaws, an operating agreement governs the workings of your LLC.
An LLC operating agreement allows you to structure your financial and working relationships with your co-owners in a way that suits your business. In your operating agreement, you and your co-owners establish each owner's percentage of ownership in the LLC, his or her share of profits (or losses), his or her rights and responsibilities, and what will happen to the business if one of you leaves.

Why an Operating Agreement Is Necessary
While many states do not legally require your LLC to have an operating agreement, it's foolish to run an LLC without one (even if you're the sole owner of your company). An operating agreement helps your LLC by guarding your limited liability status, heading off financial and management misunderstandings, and making sure your business is governed by your own rules -- not default rules created by your state.

Protecting Your Limited Liability Status
The main reason to make an operating agreement is to help ensure that courts will respect your limited personal liability. This is particularly key in a one-person LLC where, without the formality of an agreement, the LLC will look a lot like a sole proprietorship. Having a formal written operating agreement will lend credibility to your LLC's separate existence.

Defining Financial and Management Structure
Co-owned LLCs need to document their profit-sharing and decision-making protocols as well as their procedures for handling the departure and addition of members. Without an operating agreement, you and your co-owners will be ill-equipped to settle misunderstandings over finances and management. What's more, your LLC will be subject to the default operating rules created by your state law.

Overriding State Default Rules
Each state has laws that set out basic operating rules for LLCs, some of which will govern your business unless your operating agreement says otherwise. (These are called "default rules.")

Many states, for example, have a default rule that requires owners to divide up LLC profits and losses equally, regardless of each member's investment in the business. If you and your co-owners did not invest equal amounts in the LLC, it's doubtful you'll want to allocate profits equally.

What to Include in Your Operating Agreement

  • The members' percentage interests in the LLC
  • The members' rights and responsibilities
  • The members' voting powers
  • How profits and losses will be allocated
  • How the LLC will be managed and the co-owners roles and responsibilities
  • Rules for holding meetings and taking votes
  • How to handle major disagreements between members, disagreements that result in one member buying out the other and at what cost
  • Buyout, or buy-sell, provisions, which establish a framework for what happens when a member wants to sell his or her interest, dies, or becomes disabled

Percentages of Ownership
The owners of an LLC ordinarily make financial contributions of cash, property, or services to the business to get it started. In return, each LLC member gets a percentage of ownership in the assets of the LLC. Members usually receive ownership percentages in proportion to their contributions of capital, but LLC members are free to divide up ownership in any way they wish.

Distributive Shares
LLC owners also receive shares of the LLC's profits and losses, called "distributive shares." Most often, operating agreements provide that each owner's distributive share corresponds to his or her percentage of ownership in the LLC. For example, because one owner owns only 35% of his LLC, he receives just 35% of its profits and losses. If your LLC wants to assign distributive shares that aren't in proportion to the owners' percentage interests in the LLC, you'll have to follow rules for "special allocations." Agreements also include:

  • How much -- if any -- of the LLC's allocated profits (the members' distributive shares) must be distributed to LLC members each year
  • Can members expect the LLC to pay them at least enough to cover the income taxes they'll owe on each year's allocation of LLC profits? (An LLC owner, like a partner in a partnership, has to pay income taxes on the full amount of profits that are "allocated" to him or her, not just on profits that are actually paid out. When profits are plowed back into the business instead of being paid out, they are still treated as income to the owners, in the proportions allocated.)
  • Will distributions of profits be made regularly or are the owners entitled to draw at will from the profits of the business?

Voting Rights
While most LLC management decisions are made informally, sometimes a decision is so important or controversial that a formal vote is necessary. Either each member's voting power corresponds to his or her percentage interest in the business, or each member gets one vote -- called "per capita" voting. Make sure your operating agreement specifies how much voting power each member has, as well as whether a majority of the votes or a unanimous decision will be required to resolve an issue.

Ownership Transitions
Many new business owners neglect to think about what will happen if one owner retires, dies, or decides to sell the owner's interest in the company. These concerns may not be on your mind now, but it pays to be prepared. Operating agreements should include a buyout scheme -- rules for what will happen when a member leaves the LLC for any reason.

Lawyers typically have several types of standard agreements on hand that can be customized for your LLC. Although using a lawyer can get pricey, the peace of mind you'll gain from knowing that your LLC is protected - and has adopted operating rules that will best serve its interests - may well be worth the cost.


Monday, June 15, 2015

Article provided by Delaney Keating, RoShamBo
144 N. Main Street Suite B, Gunnison, Colorado 81230
970.641.3546 office | 970.275.6603 cell | |

A logo is not your brand, nor is it your identity. Logo design, identity design and branding all have different roles, which together, form a perceived image for a business or product.

There has been some recent discussion on the web about this topic - your logo not being your brand. Although this may be true, I haven't seen any clarification of the differences between "brand," "identity" and "logo." I wish to rectify this.

What is a brand?The perceived emotional corporate image as a whole.

What is an identity? The visual aspects that form part of the overall brand.

What is a logo?A logo identifies a business in its simplest form via the use of a mark or icon .

What is branding? Branding is certainly not a light topic - whole publications and hundreds of books have been written on the topic, however, to put it in a nutshell, you could describe a "brand" as an organization, service or product with a "personality" that is shaped by the perceptions of the audience. On that note, it should also be stated that a designer cannot "make" a brand - only the audience can do this. A designer forms the foundation of the brand.

Many people believe a brand only consists of a few elements - some colors, some fonts, a logo, a slogan and maybe some music added in, too. In reality, it is much more complicated than that. You might say that a brand is a "corporate image."

The fundamental idea and core concept behind having a "corporate image" is that everything a company does, owns, produces should reflect the values and aims of the business as a whole.

It is the consistency of this core idea that makes up the company, driving it, showing what it stands for, what it believes in, and why it exists. It is not purely some colors, typefaces, a logo and a slogan.

As an example, let's look at the well known IT company, Apple. Apple projects a humanistic corporate culture and a strong corporate ethic, one which is characterized by volunteerism, support of good causes and involvement in the community. These values of the business are evident throughout everything they do, from their innovative products and advertising, right through to their customer service. Apple is an emotionally humanist brand that really connects with people. When people buy or use their products or services, they feel part of the brand, like a tribe even. It is this emotional connection that creates their brand - not purely their products and a bite sized logo.

For a more thorough understanding of branding, in simple terms, I recommend Wally Olin's The Brand Handbook (, which is "an essential, easy-reference guide to brilliant branding."

What is identity design?One major role in the "brand" or "corporate image" of a company is its identity. In most cases, identity design is based around the visual devicesused within a company, usually assembled within a set of guidelines. These guidelines that make up an identity usually administer how the identity is applied throughout a variety of mediums, using approved color palettes, fonts, layouts, measurements and so forth. These guidelines ensure that the identity of the company is kept coherent, which in turn, allows the brand as a whole, to be recognizable.

The identity or "image" of a company is made up of many visual devices:

  • A logo (symbol of the entire identity and brand)
  • Stationery (letterhead, business cards, envelopes, etc.)
  • Marketing collateral (flyers, brochures, books, websites, etc.)
  • Products and packaging (products sold and the packaging in which they come in)
  • Apparel design (tangible clothing items that are worn by employees)
  • Signage (interior and exterior design)
  • Messages and actions (messages conveyed via indirect or direct modes of communication)
  • Other communication (audio, smell, touch, etc.)
  • Anything visual that represents the business

All of these things make up an identity and should support the brand as a whole. The logo, however, is the corporate identity and brand all wrapped up into one identifiable mark. This mark is the avatar and symbol of the business as a whole.

What is a logo? To understand what a logo is, we must first understand what it is for: i dentification .

A logo identifies a company or product via the use of a mark, flag, symbol or signature. A logo does not sell the company directly nor rarely does it describe a business. Logos derive their meaning from the quality of the thing it symbolizes, not the other way around - logos are there to identity, not to explain. In a nutshell, what a logo means is more important than what it looks like.

To illustrate this concept, think of logos like people. We prefer to be called by our names - James, Dorothy, John - rather than by the confusing and forgettable description of ourselves such as "the guy who always wears pink and has blonde hair." In this same way, a logo should not literally describe what the business does but rather, identify the business in a way that is recognizable and memorable.

It is also important to note that only after a logo becomes familiar, does it function the way it is intended to do, much like how we much must learn people's names to identify them.

The logo identifies a business or product in its simplest form.

Are You Asking Every Day?

Monday, June 08, 2015

Volunteers, staff and board members are a special breed of people with a wide variety of skills, talent, passion and experience. They care. They work hard. They also ask for support. Take a few moments to take this assessment to determine whether you have what it takes to ASK, ASK and then continue asking.

Answer "Yes" or "No" to the following questions on a separate piece of paper. Add up your score and read what it says about your ability to be a successful business owner.

  1. Do you have a wide support network (spouse, relatives, friends, business associates, etc.)?
  2. Do you consider yourself a good communicator?
  3. Are you passionate about your organization and the difference it makes?
  4. Are you the type that doesn't give up easily? Are you persistent, even in the face of adversity?
  5. Are you a risk taker?
  6. Do you have sales training?
  7. Do you ask volunteers to join in and take on responsibilities and tasks?
  8. Do you track and follow up with your own personal and business network in order to ask them for volunteer, financial and event support; stepping into a leadership role on the board, or attending an event?
  9. Do you regularly ask for donations?
  10. Can you ask, even when you expect a potential "no?"
  11. Are you disciplined to ask regularly?
  12. Do you view a "no" as a "not now" opportunity and keep the door open for the next asking opportunity?
  13. Have you anticipated the objections and prepared several responses for each objection?

Do you have at least 10 (or 80%) "Yes" responses? We can all build up the skills and experience to learn to ask regularly! Look around you and choose a mentor today if you have a score less than 9.