|Demographics the key to any strong business
Business development attorney Shawn Jackson readers’ questions each week about owning and operating a business.
Q: I am working on a business plan with my team. Can you better explain “demographics” and why they are putting so much importance on me developing this?
A: Demographics are part of the three foundation stones for “lead generation” for increased sales, along with psychographics and temporal graphics.
Briefly stated, demographics are those objective measurable criteria of your intended target market.
Demographics include such things as age, marital status, income and physical location…all-important for the business to understand if you are to communicate with your intended target market.
Q: What is the main reason for running my business under a corporation?
A: As a general proposition (to which there are some exceptions), a corporation's shareholders have “limited liability.”
They are not personally liable for the debts of the corporation, but rather can only see their investment rendered worthless (or diminished) should the creditor pursue the corporate debtor.
Corporations enjoy relative ease in raising and operating capital and in transferring the ownership interest represented by its shares. In other words, it is relatively easy to buy and sell shares of stock as compared with the sale of assets or partnership interests.
However, issuances and transfers of corporate securities must be done in a manner that complies with applicable federal and state securities laws.
Q: Any problems with having my business just be a simple partnership?
A: The most important is that general partners are jointly and severally liable for all of the partnership debts.
That liability extends not only to the value of the partner's investment in the partnership, but to all of his/her personal assets.
While most catastrophic liabilities can be insured against by a partnership, the risks of partnership form can still be significant. This general liability feature of the partnership works to undermine the entrepreneurial spirit.
Q: What is the best way to increase sales?
A: Reconnect with your past customers. Many businesses do not realize one of the best ways to increase sales is to reconnect with your past customers who already know and appreciate you and your services or products. Tell them what’s new.
Q: Do e-mail marketing campaigns really work?
A: Well, that depends…first upon the quality of the e-mail database and then upon the nature of the email. If the information is useful to the designated audience and you have some level of “call to action” that is easy and simple with a real benefit for the email recipient, then you will have a marketing campaign that serves both you and your customers.
Q: Should I form a corporation this year or wait until the beginning of next year?
A: If we are in the first nine months of the calendar year and on the assumption you would benefit from the liability protections and tax advantages of a corporation or a LLC, then yes, it is to your benefit to have a business development attorney help you form a corporation or a LLC.
Keep in mind that if your business has a high exposure to liability, it may be advantageous to form the corporation at any time of the year, because protecting your personal assets is often very important.
Shawn Jackson is a business development attorney and instructor with more than 30 years of broad-based sales, business development and marketing experience. He has assisted multiple clients on business structures, systemic development, and strategic business growth. Send him questions via e-mail at firstname.lastname@example.org