5 Secrets to Small Business Success


Running a successful small business involves planning, making key decisions, and hiring the right employees. Make sure you plan, prepare and manage your business effectively from day one; this is one of many ways you can maximize your day and your potential success. Take a look at these are five things you should focus on as you run your small business.

Think before you establish partnerships.

There are lots of things to consider when setting up a business partnership—just because a person is your best friend or a long-time co-worker doesn’t make him or her the perfect business partner. No matter the reason you think someone is qualified or even if he or she appears to be the ideal professional partner, always remember to take your time as you make the selection.

The ideal partner is usually someone whose skills and approach are the polar opposite of yours. This is beneficial to your business because it guarantees you can cover a lot of ground without hiring a lot of employees. While it may cause some conflict at times, it’ll force you to defend your business instincts and help minimize wasted resources.

Take the word “discouraged” out of your vocabulary.

Don’t view running your company as a goal, but instead as a journey with a lot of ups and downs. Try to relish each moment and enjoy the process. Your business will have ups and downs—it’s essentially a rollercoaster ride of events and emotions. You will gain wonderful clients—and unfortunately lose some, too, for reasons that may not make sense to you. These things are all part of business ownership.

All business owners experience feelings of failure and doubt. However, focus on handling your stress effectively and try not to dwell on the things that don’t go the way you hoped.

Remember why you started your business in the first place.

Did you start your business to follow your passion? Was your hope to have control over the time you could spend with your family? Always focus on why you initially began your business. It’s far too easy to get caught up in the day-to-day motions of life as an entrepreneur and put the reasons you started your business on the back burner. If you catch yourself straying away from those very reasons, make sure you sit down and reflect on the reasons you launched your business and make it a goal to get back on track.

Delegate work to others.

It happens time and again: business owners start their company on a budget—so they may have to wear a lot of hats and work a lot of hours in order to get all of the necessary tasks completed on a daily basis. However, there are tasks small business owners should delegate right now to free up time to focus on the bottom line. Hire some help to take some responsibilities off of your plate and use your valuable time and energy to help grow your business.

Never stop evolving.

Nothing—when it comes to your strategy, marketing campaign, and even your target market—is set in stone. The world changes each day, and that means your industry will likely experience a shift at one point or another. Flexibility and the willingness to never stop evolving will help your business maintain its competitive edge. Stay proactive and on top of challenges that may come your way and you’ll already be a step or two ahead of your competitors.

It doesn’t matter how enthusiastic you may be about your business, you need a plan in place at all times. Your small business will stay relevant if you learn to take your time when you make decisions, keep a positive attitude, focus on your short and long-term goals, keep an open mind and remain flexible.

What are some of the most important lessons you have learned as a small business owner?

Why Startup Incubator-Hopping Can Help Launch Your Business


Venture capitalists Sam Altman and Jason Calacanis both wrote posts recently on the topic of startup incubator hopping. Altman says that participating in more than one startup incubator may actually decrease your chances of getting into Y Combinator, a goal many startups are vying for, whereas Calacanis says the question isn’t about Y Combinator—it’s about whether or not you should do an incubator at all. According to his article, acceptance into an incubator depends on a scale of “seemingly invincible” to “desperate,” and takes into account the reputation of founders, strength of business, and market competition.

Our company, GiftStarter, a group gifting solution for e-commerce businesses (B2B), went through more than one incubator. We participated in 9Mile Labs in Seattle from August to November in 2014, and 500 Startups in San Francisco from July to October in 2015.

We are in a space that’s filled with many gravestones and companies in purgatory, but the opportunity to grow a business in this space has been a personal obsession for over 10 years. We have formulated and rebuilt our hypothesis to arrive where we are. We believe this space is solvable, and that we will be the ones to solve it—and our experience in two different accelerators helped us get where we are now. Here’s why.

Our First Accelerator Experience: Moving Focus from B2B to Consumer

We first approached the partial payments of e-commerce products (group gifting) from a B2B perspective, so 9Mile Labs was a good fit for us as it is focused on B2B/enterprise software and cloud technology. We joined in August of 2014, having just come out of a first-place win from a Startup Weekend and the pre-accelerator program NEXT. According to Calacanis, I’d grade GiftStarter as “weak” at that point. During the program, we launched our MVP solution for both businesses and consumer, hustled to build over 27 partnerships with e-commerce businesses, and were off in time for the holidays. But when we examined the data after the holidays, it didn’t make sense. Our company wasn’t growing from the partnerships we were counting on. We were growing from the direct business to our site.

From 9Mile Labs, we learned that hustling and passion will take you quite far as a startup founder. We have a shameless approach. We stick our neck out, put our name on it, and take risks. True passion is not a fleeting project or a hobby.

Those were dark times for the team. We quickly decided to rebuild and redesign the business as more a destination for consumers with our relaunch in May 2015. From there, our platform grew 50-75 percent month-over-month across user, gift campaigns, and revenue KPIs.

Our Second Accelerator Experience: Growing Our Consumer Expertise

Next, we knew that we had to widen our access to perspective and expertise, and quickly. We were officially all in as a consumer company. So we applied to 500 Startups as a way to accelerate as our consumer business. When we joined in July 2015, we had some good early traction, including over 420,000 dollars in angel investment, over 27 partnerships, a team of three employees and two founders, and a strong advisory board.

We decided to join 500 Startups—our second accelerator—for the following reasons:

  • Access to the wealth of expertise and perspective in San Francisco (consumer, social media, e-commerce, payments)
  • Consumer business knowledge and distribution methodology
  • Upgrading the status of our startup strength (acceptance into an established top-notch accelerator)

And during 500 Startups, we learned and evolved a lot. We rebuilt our team to be able to evolve and update the product faster. We focused our energy inward on company values, building and documenting processes, prioritizing product features based on growth, nailing our business model, and storytelling. We learned that hustle and passion are great as table stakes, but to be a strong startup, you have to be strategic in how you lead.

As a result, we had more angel investors join the GiftStarter team and continued to have great traction. Based on what Calacanis wrote, I’d grade us as “strong” with the backing of 500 Startups. We’re now in the go-to-market phase of the startup journey.

Doing What’s Right for the Company

It’s been almost two years and our focus has been to grow quickly and build a sustainable, scalable company. We are what you call “a cockroach”: Cockroaches don’t die easily. They pivot, they are scrappy, they hustle in all kinds of directions, they have talent, they have amazing work ethic and they’re passionate. While we believe in unicorns, being one of those one-hit wonders is like winning the PowerBall lottery. We believe in data and experimentation, and doing it as quickly as possible, and our journey through two incubators illustrates that.

I don’t think that everyone wants to get into YC, so Altman’s perspective doesn’t make sense for all startups. Our priority and focus has always been doing what’s right for the company (to survive and thrive) holistically, not just to haphazardly raise as much money as possible. Our journey through two incubators has allowed us to make timely pivots based on data, quickly grow our networks and access to resources, and ultimately upgrade the strength of our company — and in that sense, made “accelerator hopping” well worth it for our future.

Author: Arry Yu is the CEO and Founder of GiftStarter.com (Emotiv Labs).  Arry got her start advising world class brands including Microsoft, Google, and L’Oreal at the intersection of where business and creativity meet technology.  Arry is passionate about building businesses with an emphasis on corporate culture and innovation, using technology as an enabler.  She’s recognized as an industry leader in the services space and has had the opportunity to offer her expertise to both startups and major brands.   Arry was recently profiled in the Puget Sound Business Journal’s special “40 Under 40” publication in 2014.

“At the end of the day, people do really matter and that human-centric focus is exactly what we are trying to bring back with the GiftStarter platform”, said Arry Yu.  

Ditching the Performance Review: Another Look


There is no doubt the performance planning and review process in most organizations is broken. Too often, it’s a meaningless annual exercise of managers and their people filling out forms, having “the conversation” then going back to their real work.

Too often, the review process has become completely detached from how managers work with their people on a day to day basis.

In my own past jobs, even at senior levels, I’ve had my managers hand me a blank form, asking me to fill it out, then we sit down and talk about it. We would go through the motions as quickly as possible, sign the forms and sigh in relief that it was over—at least for another 12 months. But we go through the process, if only to keep HR off our backs. Then we go back to our real work.

This annual process takes huge amounts of time from everyone. It’s the time spent it completing the form, giving the review, and all the things associated with it—along with the mental distraction. It’s hours per individual, multiplied by whatever number of reviews a manager has to go through.

Couple these with the facts that these reviews are connected with, at least in theory, compensation increases as well as our future employment with the company.

As if I haven’t created a strong enough case, layer this with, managers have very little training on how to do this; if anything the training is about filling out the forms. There’s often nothing about setting performance expectations, providing feedback, how to evaluate performance, and so forth.

It’s no wonder there is dissatisfaction with the performance review process—both with managers and with individual contributors.

Many organizations are abandoning performance reviews completely. Surprisingly, many never had a performance review process in place. Many are searching for new tools to help with the process.

In spite of all of this, we can’t escape some things:

  1. It’s our job as leaders to maximize the performance of each person on our teams.
  2. Our people deserve and need to know what’s expected of them in their jobs.
  3. In order to improve, everyone needs feedback on how they are doing. They need to understand where they are doing well, where they need to improve.

This may have been lost in many of our traditional performance review processes, but it’s our obligation to our people and to our companies to do these things. If we aren’t, we aren’t doing our jobs.

This process cannot be one of filling out forms annually. It has to be a continuous process, first establishing performance expectations and making sure they are understood and agreed to by each person.

Establishing performance expectations isn’t just about saying, “Here’s the number, make it or you’re gone!” It’s about how we engage and create value for our customers, it’s about how we execute the corporate strategies in front of the customers, it’s about how we work with others in the organization, it’s about expected behaviors and attitudes, it’s about skills and competencies we must develop…….

Establishing performance expectations is not something we dictate or provide on a preprinted form, but they are the result of a collaborative discussion between the manager and the employee, making sure each person understands and owns what is being committed to in the performance plan.

We use this process to set priorities, to make sure each person understands what’s expected. The plan is established as much for the leader as it is for the employee, because it’s the leader’s job to help the employee achieve their performance goals. Any failure to do so must be shared by the individual and leader.

Then maximizing performance requires constant attention and feedback. Our daily coaching provides feedback in specific areas, for example, prospecting, qualifying, deal strategies, call execution and so forth.

Periodically, we need to sit down with the individual providing feedback on the “total picture,” how each person is performing against all their performance expectations. These conversations aren’t about what’s wrong, they are about helping the person learn and develop to meet the expectations that have been agreed upon.

Whether it’s tied to an annual process, or if it’s a dynamic ongoing process, performance planning, performance management is critical to everyone involved.

Yes, there is a lot broken in performance review processes. But if we aren’t setting performance expectations, if we aren’t providing our people feedback on how they are performing, if we aren’t helping them constantly improve, then we aren’t doing our jobs.

Why Every Organization Needs a Budget


Budgets are like oil tankers – they need time to change course.

~Jeroen De Flander

In all my years advising businesses, I have seen many that just did not have budgets. These operations ranged from relatively large businesses with $10 million in sales to very small businesses and startups.

Every time I ran across one of these businesses, I mentioned to the CEO how vital a budget is, and without exception, every one of them said they realized a budget was important but had simply never followed through to develop one. This is especially troubling since QuickBooks has a feature that allows you to set up a budget relatively easily.

Budgeting is just so basic. It gives the entrepreneur the control and accountability required to manage a business, so it is hard to fathom why some do not make it a priority. However, some entrepreneurs have given me the lame excuse that they just do not see the value in budgets.

I have given this some thought, and I think the reason is twofold. First, some of the leaders of these organizations do not understand financial statements. If you do not understand financial statements, a budget is not going to be of much value because you cannot make sense of the numbers. Second, businesses that are tight on cash flow are not going to value a budget as their only concern is whether they have enough to meet the next payroll.

Budgets enable you to manage your organization. Though in some cases it can be hard to estimate revenues and costs, just going through the budgeting process is so valuable as it spotlights the factors that tend to cause revenues and costs to change over time.

One entrepreneur I worked with was convinced he could never use budgets because his revenues were too volatile. However, I was able to help him understand that what determined his future sales was the number of calls his salesperson made to potential customers. He realized from this exercise that he needed to manage his salesperson differently. He was also able to see how easy the budgeting process became once he understood the factors that determined future sales.

Even if you cannot get a handle on what determines your sales, you can estimate what they will likely be and just refine that number over time.

Budgeting is not rocket science but a tried and true method of managing your business better and more profitably. I have seen firms become more profitable simply by introducing a new budget.

Now go out and develop a budget for your organization. At first blush, budgeting seems hard to do, but once you start the process, you will see how easy it is to manage this new system. I assure you, you will be so pleased with the results.

You can do this!

Essential Tech for a Freelancer on the Move


Freelancers are the fastest-growing group of workers in the world. In the U.S., 34% of the workforce, or 53 million workers, participate in some form of freelance work. The number of freelancers in the EU labor market increased to 8.9 million in 2013. In Australia for example, as of 2015, there were 4.1 million freelancers, up from 3.7 million the previous year.

These continually rising numbers are one reason that there have been so many computer programs and mobile phone apps designed specifically with freelancers in mind. Nowhere is the old saying “time is money” more true than in the world of freelancing. Fortunately, there are a number of tools available that can help freelancers make the most of their time to achieve maximum profits.

Best Hardware


Taking a presentation on the road used to require a lot of bulky equipment and even more set-up time. The newest innovation is IdeaUSA’s mini-projector. Incredibly, it weighs under a half a pound and is so small, it can fit on the palm of your hand. Even more incredible is the crystal clarity of the 120-inch picture. With vibrant colors and a longer operating life than most traditional projectors (25,000 hours), this is one of the best investments a traveling entrepreneur can make.

Flexible Input

All the components for business presentations are getting smaller and more portable, including keyboards. The foldable, compact Bluetooth keyboard made by iClever gets high ratings for quality, convenience, price and performance. Its size is ideal for travel since it can easily fit in a car’s glove box.

Data Storage

Flash drives used for storing presentation materials are also getting smaller in size, yet bigger in performance capability. The Leef Supra 3.0 is lightweight, but powerful enough to serve as an external hard drive for backing up files. With 16GB of storage capacity, it transfers data with lightning speed. It even has an LED light so you can find it in the dark in a strange hotel room.

Portable Connectivity

Mobile entrepreneurs conduct business from coffee shops, restaurants and even their cars. Not all of those places have WiFi connections, and those that do may not be secure enough for some transactions. The NETGEAR WAC730 ProSAFE Wireless Access Point provides a dual band of WiFi connectivity wherever you need it.

Portable Power

One of the benefits of many portable gadgets is that they operate on batteries, which means you can use them even if there’s no place to plug them in. That’s why it’s important to keep batteries charged. Of all the battery chargers on the market, myCharge gets among the highest ratings. It can charge up to 3 devices simultaneously and comes with a USB port, and both a micro-USB and a Lightning connector.

Message Management with Manners

While nobody wants to miss an important phone call or message, having your phone ring during a business meeting can leave a lasting bad impression on a potential new client. Ditto, manufactured by Simple Matters, is a tiny device that vibrates to alert you of an important communication. You can pre-program it to only accept messages from certain people during certain hours. You can also put it on vibrate, so that it doesn’t interrupt an important conversation. It runs on a watch battery, so it never needs to be recharged.


With keyboards, screens and gadgets getting ever smaller, our eyes often have to work harder. As we age, those tiny screens get more difficult to see. ThinOPTICS makes stylish, colorful reading glasses that come in multiple strengths and fit right into your phone case. With this solution, entrepreneurs can enjoy all the benefits that small portable gadgets offer without sacrificing their eyesight.

While technology still hasn’t solved every problem traveling entrepreneurs experience, the right combination of hardware and software can solve most of them.

Best Software

Time Management

One of the mostly highly rated and recommended time management tools is Rescue Time. It allows you to keep track of exactly how much time you spend on your computer as well as analyze just how that time was spent.

Task Management

Wunderlist allows you to make, and share, daily to-do lists. Once they’ve been created, you can prioritize them by setting due dates and automatic reminders. You can also assign tasks to other users via email. One of the most useful features for freelancers is that it can be synced across all your devices.

Project Management

FreedCamp rates high in ease of use, utilizing project templates that allow you to begin working almost immediately. It offers task lists, sticky notes, a calendar, 200MB of storage, and an unlimited number of projects. The cost is another attractive feature for freelancers with fluctuating budgets—it’s free. As your business grows, you can add other options for a small monthly charge.

Financial Management

Budget fluctuations are an excellent reason to utilize Mint, a financial management tool. Praised for its interface, the number of tools it offers, and the useful information it provides, this free service has gained considerable popularity since its launch in 2006. In fact, it gained over 1.5 million users within the first two years. It allows you to synch all of your financial information and make decisions based on the big picture.

Social Media Management

Social media is one of the most important marketing tools available to freelancers. Creating and maintaining a social media presence is necessary to remain competitive. Hootsuite can reduce the amount of time it takes to do that, so that you can focus on work. It allows you to schedule posts across several social media channels simultaneously, even a week’s worth. After posting, it tracks your stats so you know which posts were most popular with your followers. The limited edition is free.

Data Management

As a freelancer, your business depends on secure storage and ease of access to your files. Many freelancers who utilize Dropbox quickly discover its limitations once they achieve enough success to need more storage space. If your budget and your storage space have both reached their limits, CX Cloud Storage offers an extra 10GB of storage space with their free plan.

Password Management

The importance of internet security for freelancers can’t be overestimated. Loss of intellectual property means loss of income. Unfortunately, security means having to create, remember, and regularly change a growing number of passwords to access your data. Keeping track of all those passwords—and typing them in, can be time-consuming. LastPass allows you to store all of your passwords in a secure online vault for easy access.

Distraction Management

Freelancing requires self-discipline, and when you’re working online, it’s easy to be distracted by interruptions like social media updates. Ironically enough, studies show that taking breaks and giving your brain sufficient downtime actually increases productivity. Focus Booster is an app that works according to the Pomodoro Technique, which dissects tasks into 25 minute increments, separating each increment with a 5-minute break. Taking regular breaks improves concentration. Standing up and moving frequently helps prevent many of the physical ailments associated with sedentary work that can lead to burnout.

By increasing their ability to develop and maintain lasting personal and professional relationships, these apps help make the lives of freelancers richer in every sense of the word. Now that’s real success.

Philip PileticAuthor: Philip Piletic is a freelancer, writer and traveler who loves to share his experience about business, marketing and tech.

Why Passion and Emotion Are Key Drivers of Sustainable Change


People are emotional beings. While many of us believe we make decisions based on logic, our emotions have a significant influence on our decision making process.

Creating an emotional connection with your team is vital to getting them to buy into organizational change. Once leaders establish a clear purpose for change (Part 1 of the 3P Change Equation to Stimulate Sustainable Change) they can then focus on demonstrating a passion for change.

Leaders need to back up the need for change by tapping into the passion and emotion of the people with whom they are working. When true leadership is demonstrated, others will follow. Connecting emotionally starts with your own behaviors and building trust and cooperation into your organizational DNA. You need to understand who your people are and what drives them.

Walk the Talk – Trust and Cooperation

Leaders need to go first—lead by example and walk the talk if they want trust and cooperation from their team. Clarity opens the door for others to trust your decisions.

When you have clarity of purpose, you have confidence to make tough decisions – and there is inherent TRANSPARENCY in your decision-making that your team can see. This creates TRUST. When people have a shared purpose, then they inherently work together for a common goal. This creates COOPERATION.

Leaders need to understand that they cannot do it alone. You need a good team around you to achieve organizational success. Lack of trust can create uncertainty and cause leaders to question themselves and others to question the decisions made by leadership.

Leaders set the tone with their behaviors. Without strong, guiding leadership, change is unlikely; without trust and cooperation, change is impossible.

The Benefits of Trustworthy Leadership

Team members are more willing to buy into change if they trust leadership. Establishing a trusting relationship with your team makes them more open to new ideas and it also helps to establish a dialogue about change. True leadership isn’t getting others to follow you – it’s finding others who share your vision to join you, and this can only happen if they understand and trust your vision for change.

Getting your team to buy into or adopt your vision starts with hiring the right people, establishing a collaborative environment, and being open and honest about things that are happening. A simple daily team huddle, team meeting, or even a weekly email update to keep your team in the loop promotes transparency and establishes trust.

When your team trusts you, they will be more willing to try new things, be open to suggestions, offer honest feedback to leaders, ask for clarification and help when they need it, and be willing to see new perspectives.

Transformational leaders understand the need to frame change in a way that taps into people’s emotions, aligns with their passion and purpose, and engages them in the process — so they see it as an opportunity instead of a threat. That is what makes people willing to endure the pain of change and trust in the process.

Passion is the main driver of change because it leverages the power of your people. Without passion and proving that you walk the talk, even the best strategic initiative and change management plans will get trampled.

Once you have a clear purpose, and communicate your passion for change, you can then introduce the process to create change. The next article in the series will discuss why leaders need to have a clear process for making change stick.

The 8 Best Advancements in Security Systems for Your Business


Working hard to make your business successful comes naturally to you. So when it comes to keeping your business secure and safe from threats, you want to choose the best commercial security systems you can find.

You’ll need protection not only from theft and vandalism, but also from natural threats like fire and flooding. You want to be sure that only people who are authorized to enter your business are able to get access.

With advancements today in security technology for businesses, every business can have exactly the protection they need, custom tailored to the specific type of business and its needs. Here are the eight best advancements available in commercial security systems:

CCTV and Video Surveillance: Many businesses can benefit from CCTV technology, which allows constant video monitoring and recording to protect business assets and to keep an eye on all movement within the business grounds.

Intrusion and Burglary Detection Systems: These can consist of hi-tech components like touchscreen keypads, cutting edge control panels and glass breakage detectors, along with motion sensors. These systems let a business be informed if there is an attempted break-in.

Remote Monitoring: Lets business owners keep an eye on remote locations and includes things like sensors to record audio and video events, or even things like how well heating and ventilation systems are working. Remote monitoring provides real-time insight into business operations from a distance.

Alarms: Commercial alarm systems can include those for burglary, fire and even dangerous levels of carbon monoxide. Being informed lets a business take action quickly to minimize damage.

Access Control Technology: To let businesses know who is attempting to gain access into buildings and allows only authorized people to do this, using things like fobs, cards and fingerprints.

Photo ID and video badging: Providing technologically advanced identification for employees, vendors and others who should have access to your business.

FLIR Thermal Cameras: Provides heat detection and thermal detection capabilities. These work especially well around petrochemical businesses, utility substations and power plants. These systems are often more affordable than cameras that provide video or photos.

Monitoring for Environmental Hazards: To let you know if there are events like burst pipes or flooding in sections of your business.

Awareness Is Where Protection Begins

These security systems are meant to make you aware of unwanted activity or natural disasters that have affected your business, so something can be done about it right away. Commercial alarm systems let you know instantly if someone is attempting to get access to your business, especially after hours. They also inform you if glass has been broken or if other damage is being done.

Many of these systems also come with software capabilities so you can access the information from smart phones, laptops or personal computers from a distance. This is helpful when you must be away from your business, but want to stay completely informed about things going on within the business. Some systems also allow reports to be created and delivered to you, so you become aware of any patterns of unwanted occurrences or hazards.

Effective Security Measures Help You Protect Assets and Save Money

Some modern security systems are so advanced, you can do things like locking or unlocking doors with a simple click of a mouse. This can help you protect assets if doors have been accidentally left unlocked. Being aware of what is going on with your business at all times helps you to stay in the position of control.

When your security systems are inter-connected, this gives you the best protection and lets you see all activity from one place. Security systems offer the best way to protect businesses today.

Author: Solomon Burr is a blogger who obsesses over all things tech, particularly advancements in home security and commercial security systems.

A Riddle: Why Explain Why?


In my early journalism classes, I was taught the five “W’s” of good news stories, and that most should be in the first paragraph at that. Who, what, when, where and why are the five, with sometimes a “how” thrown in for those followers of the macabre.

But of the five, “why” is by far the most important for business leaders to consider and communicate. Employees, contractors, even investors want to know why they are asked to make use of their valuable resource to support your effort.

Failure to explain why will scare away potential investors—other than closest friends and family. The same failure will disenfranchise your workforce to a degree that most will give less effort to a project, and certainly with less enthusiasm.

Especially if a company is in trouble, perhaps with an urgent need to make a deadline, or facing a cash crisis caused by something your employees can help control, explaining the importance of the action required empowers all to work smarter and harder to achieve the stated goal.

I’ve recently experienced an example of this. One of my companies where I have an investment and am on the advisory board was in the midst of a sprint to close its acquisition by a larger company before the cash ran out and enterprise value plummeted. Do you tell the employees about the pending acquisition early in order to focus them on increased performance to increase cash flow, or just keep the secret and hope that all would turn out OK and the acquisition proceed to an orderly closing on time?

We chose to tell the employees, with the obvious risk that some would be scared into looking for another job right in the middle of the acquisition process. The effort worked, and all did come together to make it happen. No one jumped, and the buyer closed the deal without a question.

When in doubt, don’t be shy. Tell them why. Your people will rise to the occasion.

Doing Business in Another State: Foreign Qualification


To be successful and generate a profit in today’s business world, many business owners are finding that it is important to conduct business outside of their local vicinity. In fact, many businesses that are located in one state are doing business in a number of other states. When a company is doing business in a state other than the one in which it is incorporated it must make a foreign qualification. Many business owners may be wondering exactly when a foreign qualification is needed.

What is a foreign qualification?

When a corporation does business in any state other than the state in which it is incorporated, the corporation must register in these other states. The process of registering to do business in a state other than the state in which a business is incorporated is called a foreign qualification. A corporation is required to register for foreign qualification in every state in which it is doing business.

When is a foreign qualification needed?

Oftentimes, the operations of a business located in one state crosses state lines into another state. When a certain amount of business operations crosses state lines, the company can be said to be doing business in another state. There are some specific criteria that a business owner can look at to determine if the company is ‘doing business’ in another state. A business may be ‘doing business’ in another state if: the company has offices, a store, or any type of physical presence in the state; the business generates a significant amount of income in another state; the company has employees in that state; or the company meets with customers and clients in another state. Simply generating income from customers in another state, however, does not necessarily dictate that a foreign qualification is needed. A business owner must examine the totality of the interaction that the business has with another state to determine whether it is necessary to make a foreign qualification.

How do you obtain foreign qualification?

To obtain foreign qualification in a state in which you are doing business but not incorporated, you must file the appropriate paperwork with the Secretary of State’s office in that state. The documents that need to be filed vary from state to state, however, they are most often referred to as either a Certificate of Authority or a Statement and Designation by a Foreign Corporation. In order to obtain a foreign qualification many state mandate that the corporation must obtain a certificate of good standing from the home state. Therefore, it is important for businesses to remain in good standing in their home states in order to be able to conduct business in another state.

It is important to note that failing to make a foreign qualification when it is required for your business can subject your business to fines, fees, and back taxes. Furthermore, businesses that do not make a foreign qualification do not have the same rights as businesses that do. Thus, most business owners desire to make a foreign qualification when they meet the minimum criteria for doing so in order to protect their interests and avoid penalties.

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