The BizFilings blog covering business tips and trends.
Business Filing and Modern Marketing Trends
Published on May 10, 2011
Read 'Business Filing and Modern Marketing Trends' at 'Time to Start Up,' the small business blog by BizFilings.
Most businesses start out as sole proprietorships, which may make sense for entrepreneurs who are trying to turn a hobby or passion into something more serious. It also makes sense if the startup has yet to monetize its operations. However, a problem arises when, after several years, a profitable company with a substantial workforce is still running as a proprietorship.
A study released last month by the U.S. Small Business Administration found only 9 percent of startups change their business filing status within the first four years of existence.
"Analysis of [Legal Forms of Organization] at startup is important due to the high costs and complexities associated with switching LFO as the firm grows," said SBA Chief Counsel for Advocacy Winslow Sargeant.
Forming an LLC or S corporation not only provides businesses with taxation and financial or legal liability benefits, it also serves to legitimize a company. It commands respect from consumers, competitors and business partners and, in that sense, it also acts as a sort of public relations or marketing device.
"Many small business owners start out as sole proprietors with a great idea that they build a business around," writes Anne Dranitsaris for the Globe and Mail. "The focus quickly moves to making the business profitable or at the very least, keeping one’s head above water before personal financing runs out. During this period, there is often no clear distinction between the business and the person running it."
"The business, like a baby, needs all of their time, energy, attention and resources to make sure it survives," Dranitsaris adds.
To that end, it is essential that startups stay informed on the latest marketing trends, including social media, mobile and quick response codes.
For example, QR codes - which are small bar codes labeled over various print materials for the purpose of being scanned by mobile devices - witnessed a 1,200 percent jump in scanning over the second half of last year, according to Mobio.
Additionally, social media has been cited by 90 percent of marketers as important to their businesses' and clients' operations, according to a recent survey by Social Media Examiner.
Of course, popularity does not imply ease-of-use, regardless of how simple a concept Twitter or Facebook may be.
"Transforming a brand into a social business cannot and should not happen over night," writes Pilar Barrio for Newsline. "It doesn't only require buy-in from every stakeholder, but also a shift of focus from the brand being at the center, to the consumer taking the spotlight."