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Get Your Business Found with a Great Google Business Listing

May 25th, 2010 ::

If you are engaged in any kind of search marketing, you are looking to leverage Google in every way.

According to Vedran Tomic of Small Biz Trends, “80% of are people using search engines to find local information, so it is impossible to imagine a brick and mortar business that couldn’t benefit immensely from local search. On the other hand, having no local search presence could potentially end a local business.”

I was recently reading his post “10 Things You Should Have Done to Make Your Google Business Listing Great” and a few things caught my eye:

Right after you claim and verify your business in Google local business center, make sure that your business info is correct with Google’s trusted data providers like InfoUSA, Acxiom, Localize, or Yellow Pages. Check those first, because they supply data to a very large number of business directories.

Since Google is placing a lot of trust on information they get from the business owner via GLBC ( Google Local Business Center ), don’t forget to be as accurate as possible when filling in your business information.

How important is proper categorization in Google Maps. It can make a difference between a poor listing and a great one. Google will suggest categories as you type and you will have to use one of those predefined categories to classify your business.

The description field should be used to emphasize what is unique about your business and to inspire trust. All that in less then 200 characters. Having something remarkable about the business in the description is a must. Maybe you have the oldest company in your town, or a patent for something.

Images and videos are ideal tools for making listings compelling and bringing their conversion rates up. Google allows 10 images and 5 videos to be added to your listing. Some types of images that would help your listing in many ways are:

  • Your Logo
  • Brands Carried
  • Pictures of your establishment
  • Logos of associations you belong to (like the Better Business Bureau)
  • Your Video Commercials or Interviews, etc…

Use coupons to promote products and services, because in Google Maps they are possibly the only reliable way to track business generated by your Google listing that couldn’t be tracked otherwise ( by call tracking, or web analytics software).

Reviews and Web citations (mentions of your business) are extremely important for similar reasons.

Encourage reviews and make it easy for people to review you. Make it a part of your routine to ask for reviews from happy customers and point them in the right direction.

How to Get Started with Google Business listing for your new business

To get your business registered on Google and get your listing, go to the Google Local Business Center.
Here is a video from them on the local business center:

The Perils of Using Personal Credit Cards to Fund Your Business

May 18th, 2010 ::

In my last post, I talked about funding your business with your retirement account. Now while that may at first seem crazy, there are some cases it can work but you must be careful. Other ways people have funded their business have involved using their personal credit cards. Yes, you might have heard amazing stories of entrepreneurs and filmmakers who did this and it worked out for them. That is a rare case. I know because about 8 years ago I did this and ended up with $80,000 in personal credit card debt that I almost couldn’t pay off.

When Things Are Good You Don’t Think Twice. But You Should More Than Ever.

Back in 2000 the stock market was roaring and Internet businesses were the bubble of the day. I had started my business in 1999 and we were doing product development and marketing for technology companies. We had tons of startups and a few big tech companies. The big companies paid well and on time while the startups tried the whole cash and stock thing (we did bite on a few and I will never do that again) so in general things were good. We grew to 15 people and then it happened. First with a “uh oh” 400 point “adjustment” on the NASDAQ in March 2000. It was the beginning of the tech bubble bursting but we didn’t know it yet. By the end of the year many of our startup clients were struggling to pay their bills and many collapsed. Still we had to meet payroll and keep the lights on. Since we were not yet two years old as a business I could not get a line of credit but I could sure get personal credit cards.

That is when I started down the slippery slope. I used my own credit cards.

Mid-way into 2001 I was using them on a revolving basis and while things were getting tight we able to get by with our larger clients who still needed to launch products, had cash flow and couldn’t hire the talent they wanted because people were still chasing dot-com dreams.

Then the bottom fell out…

On September 11, 2001 it was a beautiful morning. Crisp and cool fall air with not a cloud in sky in DC or New York. I was supposed to be in New York that day for the Risk Waters Financial Technology Congress on technology security at Windows on the World in the North Tower. I decided that day to sleep in and stay in Baltimore since some colleagues would be there later that day and I had other projects that needed attention. I drove into work not knowing what had happened and that day my entire staff and I walked to a corner bar to watch everything happen.

About a week after the attacks, most businesses and people were still in a state of shock. All of my clients, especially the larger ones, froze their contracts and payments. This caused a chain reaction with vendors like my company. Since we couldn’t get paid, we couldn’t pay our bills or our employees. Looking at the financials I realized we had about two months of cash flow left so I had to make a decision – keep going with a reduced staff and hope that things get back on track or stay the course and run off the cliff. I chose the former and talked with everyone very frankly together. We all decided we would finish what projects we had that month so the company could get paid eventually and give everyone severance for a month and time to find other jobs.

After Laying Everyone Off, I had $80,000 to pay off personally. Ouch.

Mixing up the credit cards with personal and business stuff was a nightmare for my accountant. After all that I still had $80,000 in personal credit card debit to pay off. Eventually, recievables did get paid and I was able to get things under control but I was lucky. I would never recommend this to any one unless you had a hold on a check for a few days and really had no other choice and even then I would wait a few days.

Use Them as a Tool, Not Financing

I agree with Jeremy Vohwinkle on About.com that “credit cards do have their place in business just as they do in personal finance. They are a convenient way to make purchases and potentially receive cash back or other rewards. What you have to realize is that you should treat a business credit card just like you would a personal card. Only charge what you can afford to pay back, keep interest rates low, and make payments on time.” So true.

Some Great Thoughts and Links on Credit Cards and Small Business:

About.com Financial Planning

Entrepreneur.com on Startup Financing

FoundValue on Finance

Great Tips on Precautions of Using Credit Cards to Finance Your Business

Ok, I need to write a business plan, now what?

May 11th, 2010 ::

15 Steps Writing a Business Plan e-book
CLICK ABOVE TO DOWNLOAD: 15 Steps Writing a Winning Business Plan

Many of you who follow this blog are small business owners and you have either wrote your first business plan or about to start on the journey. For some it might seem like an easy task but I will bet that it seems easier to summit Mt. Ranier that finish your business plan. It is the procrastinators ultimate project to put off and the perfectionists ultimate project to endlessly tweak.

I will guess that while sitting down with all these great ideas swimming around in your head about how you are going to create the next great product or service you couldn’t wait to tell someone about your business. But when it came time to actually ask for money from someone or actually lay out how you will execute, there was a hard realization that you needed a business plan.

But you can’t write just any business plan. A Killer Business Plan.

One that even your strongest detractors will read and say “this could work” and those whose wallets you are trying to pry free of investment capital ask “where do I sign?”. This book is written for you.

After writing many business plans, many for businesses that never launched and a few that did launch and were eventually sold, I felt compelled to share my experiences and advice to save you from the rocky process of getting started so you can just start writing.

I wrote a 15 part business plan series over on Solutions Are Power through the last year that addressed many issues and gave you a basic plan of action. However, I kept getting asked to put it into an e-book format for easy reading and note taking.

While this is not a end‐all book on business plans, I hope that this helps you frame your plan so you can get started and put together something that is relevant for what you are trying to accomplish.

There are many other resources out there which I have mentioned at the end of this e-book so I invite you to use this book along with those resources to build your killer business plan and be the success I know you can be.

I don’t need to wish you luck. Just get started, get out there and crush it.

In case you missed the big button up top, you can click here to download the e-book.

Read it and please leave a comment. We want to know how your business plan journey is going.

Understanding the Difference between a Tax Accountant and Tax Preparer

May 4th, 2010 ::

Starting to get those tax documents in the mail? I know that I am and the time has come to get my corporate returns ready for March 15 and the personal ones for April 15. If you are new to starting a business, then you might have had a personal accountant do it but if it is not complex you might have done them on your own. Now that you have a business, things get alot more complex and you will need help. There are different kinds of people that can help you and the biggest difference is between the tax accountant and tax preparer. When I was in college getting my accounting degree I interned for two tax seasons with an accounting firm and also got my certification with H&R Block so I could make money during college. So I can tell you from being both roles there are some differences. There will be a good fit if you know what to ask and what to look for to find a match.

Tax Preparers

On About.com they make a good explanation of tax preparers “Retail tax franchises such as H&R Block, Jackson Hewitt, and Liberty Tax Service offer competent tax service for individuals who need to file relatively straight-forward tax returns. Some tax preparers will be more experienced than others, and you can sometimes find CPAs and Enrolled Agents working in these offices. Prices are often determined by how many tax forms need to be filled out. Here’s a tip: ask if you can meet with a CPA, enrolled agent, or senior tax preparer. You’ll pay the same, but you’ll get to speak with a seasoned professional.”

Tax Accountants

These are more seasoned professionals and if you are in need of an accountant on a year round basis, you will probably go this route. I have a CPA that I pay on a quarterly basis to review my books, help with tax and retirement planning and generally keep me from making stupid decisions. I might have a background doing this but it is not my day job and I am a firm believer in paying the professionals to be professionals so you can focus on your business and the reasons you became an entrepreneur in the first place. There are two major tax accountants, the first is the CPA which I mentioned and the second is a tax accountant who is also an attorney. This is more specialized but it is important to know the difference and when you might need them.

  • Certified Public Accountants (CPAs) are accountants who have passed the rigorous CPA Exam and are licensed by the state they work in. CPAs will specialize in a specific area, such as audits, tax, or business consulting. CPAs are best at complex accounting work, and not all CPAs handle tax issues.
  • Tax attorneys are lawyers who have chosen to specialize in tax law. Often, tax attorneys will have a master of laws degree in taxation (LL.M.) in addition to the required juris doctor (J.D.) degree. Attorneys are best at complex legal matters, such as preparing estate tax returns or taking your case before the US Tax Court.

Which one do you use? What have been your experiences?

Have you used one of these two types in the past? What have been your experiences? What would you recommend for fellow entrepreneurs? Leave a comment.

Twitter Marketing for Your New Business

April 26th, 2010 ::

If you are doing any kind of online marketing these days and social media is in the conversation, you have probably heard of Twitter. However, knowing about it is very different than knowing how to use it. The basic premise is to say what you are up to in 140 characters. Yeah, that is very short and it requires some lessons in brevity and getting to the point.

Twitter has been around for a few years and has evolved into a whole new layer of communications. People use to talk about their lives, put out their content (like this blog post) and do cursory business communications. I see Twitter as a layer between e-mail and instant messaging. Email is a dialog that has almost unlimited space and is good for longer communications. Instant messaging is shorter and is usually best for short conversations when you don’t need to use e-mail or interrupt with a phone call. Twitter is somewhere in between and its biggest fundamental differences is that you can have a public conversation. You can bring people into the dialog, others that are “following” you and see your message or “tweet” can join in as well. There is the ability to have private conversations or send direct messages, but two people must follow each other for that to happen. This reduces and almost eliminates spam (auto-dm people take note) which is why people really like the service.

Small Businesses Are Using Twitter, So How Do I Get Started?

1.) Create a Username

When starting to use Twitter, the first thing you’ll have to do is create a username. You should probably use your company name for your business. You can create an account for yourself but that should be your personal account. You could use your Twitter personal account to tweet about your business, but you should have something dedicated and separate.

2.) Add a Profile Picture

You will also need to add a profile photo to your account. Samir Balwani has a great approach to this, “Once you’ve set your username, the next thing you should do is decide on a profile image. If you’re the business owner and are tweeting yourself, it may be best to use your own picture. However, if an employee is tweet as the business, it may be best to use the business logo.”

3.) Customize Your Account Profile

The most basic thing you can do is customize your account profile. The first thing you should do is create a custom background. There are places like Twitterbacks that can help you or you can simply display your logo. You can see the Network Solutions twitter account as an example of a customized background that helps make your profile stand out. Samir Balwani has some good advice – “On Twitter, it’s important to customize your account as much as possible. Creating a relevant, branded username, image, and background increases how much other users trust you. The more effort you put into creating a strong account, the less likely you are to look like a scammer or fake.”

Now You Are Up and Running, So How Do You Utilize Twitter?

Use a Twitter Application or maybe a few applications

Sure, you can use Twitter.com and watch your stream, but it is not very good at really getting the most out of Twitter. You should look at software like Tweetdeck, Seesmic or Hootsuite to bring in your twitter streams and build lists and search windows. There are a ton of applications out there and I would recommend going to a site like OneForty.com to find applications that suit your needs.

Using Twitter Search

Search is one of the more interesting aspects of Twitter. If you go to the Twitter home page you will have the search engine as the primary visual cue. You will also see topics trending below it. This shows in real time what things are relevant and what people are talking about. It is fascinating to watch especially during events like the Olympics or to see what trends are shaping the conversation.

Get People to Follow You

Build Loyalty First and People Will Follow You

Now that you have everything set up, you need to ask and honestly answer the question “Why do people want to follow you?” Now, don’t expect to have thousands of followers immediately. You must focus on building true customer loyalty. The initial goal is to get a core group of fans interested in telling their friends about your business. There are a few approaches you can use in your small business to build your following:

Customer Service – This works really well for companies like Comcast and Network Solutions that provide their customers with another channel to communicate.

Tips and Advice – If you are a small business that needs to establish your expertise in a certain area, providing tips and advice are perfect. You can also automate your blog feed to Twitter. A word of caution – don’t be a bot – I was guilty of this for a long time and lost a lot of followers on my personal account. Advice is great, but be a human a use the channel to talk to the other humans.

Be Human and Have Some Personality – I just mentioned the problem with the “info link bot” accounts. The only way Twitter works is for humans to talk to other humans and have a personality. Even you are a big corporation, you have some one managing the Twitter account. People want to connect with that person even if there is a corporate logo as the profile picture. There are numerous examples of companies that fail because they don’t put a human face or personality on their social media communications.

What Are You Waiting For? Get Started.

I hope this covers the basics and now that you have the basics down, get started. If you want some people to follow, you can find me on Twitter at @stevenfisher. Network Solutions @netsolcares is another great one to follow. See you online.

Photos: Twitter.com

Do It Yourself Marketing Lessons for Your Small Business

April 19th, 2010 ::

Being in business the last 10 years has let me experience three bubbles, two major recessions and two booms that show me one simplistic thing – provide something that people will need and if you stay competitive, you should be able to stay in business.

One thing I always say to people is that “people buy what they can’t live without, what they need and what they want in that specific order”. So in tougher economic times, many people scale back and only buy what they need and if things are really tight, just buy what they can’t live without. Now this can be subjective but I would generally put food, fuel and shelter in the “can’t live without” category. Things like cable TV, Internet, cell phones and other things that may make their life more convenient can float between feeling they need it or want it.

Regardless of these economic factors, you have to market in some way to attract new customers and stay top of mind to retain those you worked so hard to get. As your small business markets to the world, there are a few do-it-yourself lessons I have learned and would like to share so you can implement them today.

Lesson 1: Engage your current customers – You can use your web site or blog along with ad campaigns to get your current customers to let you know what they like and dislike about your product.

Lesson 2: Do a campaign around an events – Events can be new product opportunities but events get alot more buzz and press from the media which is a great way to plug and build buzz around your company and launch the campaign.

Lesson 3: Do Leverage the newer social media channels – These are emerging channels that are mostly free to join and going where your customers are to drive them to your web site is a good thing. Keep in mind that this involves a commitment to creating content and engaging those who are on these channels.

Lesson 4: Avoid Social Media “Experts” – Yes, I know, every says they are social media expert. In fact, there are 10,000 people on Twitter who have this in their profile. Beware of those who profess this because they have lots of followers on Twitter and really know how to play Mafia Wars or Farmville on Facebook as demonstrations of their expertise. Real experts should have been doing some sort of activity for their employer or clients for at least a year now.

Lesson 5: Study your competitors and take advantage of their weaknesses – This does sound very Sun Tzu “Art of War” but nobody ever said capitalism was sunshine and lollipops. In many cases it can be considered a blood sport but you probably already know that. Studying your opponent just like you would in any sport and look for a chink in the competition’s armor and use it to your best advantage. This will eventually expose areas in which you can be better than them showing customers that you are the one to buy from.

Lesson 6: Fail fast and tune it as you go along – I always say “Show me a person that hasn’t failed, and that is a person that has never tried”. I am so much of a planner that I learned that you need to stop planning and just do it.

What Lessons Have You Learned Along the Way?

These are some good basic lessons and there are many more to share in the future. What lessons have you learned so far with your small business? Please share it with us in the comments. We would love to hear from you.

Understanding the New Entrepreneur

April 12th, 2010 ::

If you follow the Grow Smart Business blog, you might have heard about the new report on “The Rise of the Homepreneur” and this new type of entrepreneur. Recently, I came across this presentation on “The New Entrepreneur” published by Grasshopper.com and Trendspotting.com.

Some interesting take aways:

  • 39 is the Average age of entrepreneur when they started their business
  • 13 Million People are employed by Home Businesses
  • 61% of entrepreneurs think the economy is on the wrong track

Here is the rest of the presentation:

Is Your Ego Too Involved in Your Business?

April 5th, 2010 ::

Is Your Ego Too Involved in Your Business?

This is a guest post by Carol Roth writes Unsolicited Business Advice (TM) for aspiring entrepreneurs, solopreneurs and other small business owners, at CarolRoth.com and you can find her on Twitter as @caroljsroth

There’s no question that a new business takes an investment of resources including money, time and sweat equity. It’s also filled with an investment of another kind, the pride of personal ownership. Being personally invested in any business you start is critical. However, taking things personally can be critically disabling to your success.

Think hard: is your ego too involved in your business?

Entrepreneurs often decide to start their own business to bolster their ego. The ego is part of self-esteem and protects you from getting hurt. But ego shouldn’t be the sole motivator to start your own business. You might think that running your own business gives you control of your destiny. But look closer- the desire to control your destiny might be your ego trying to protect you from rejection. After all, if you work for yourself, you can’t be rejected in job interviews, you can’t be ordered around by incompetent bosses and you can’t get fired. In short, you call the shots (or so you may think…).

The problem is that “calling the shots” running your own business doesn’t make you rejection proof. You’ll find that starting a business involves a level of rejection you’ve never before experienced.

Who inflicts the rejection? CUSTOMERS. There are 306 million potential customers in the US alone that don’t want to buy your products or services. Here’s where it gets tricky. The fact is that the ego can’t comprehend that:

It’s much easier to handle rejection from a few potential employers, than to be rejected by 306 million potential customers every day!

Read that last sentence again. When you’re rejected by 306 million people, your ego doesn’t even realize that you’re being rejected (and that you have your savings on the line as well).

Is Ego Your Prime Motivator?

Ego can drive you to try to impress others. Your ego tells you that if you feel down about your career, then starting your own business can be the road to an exciting life. You may think it sounds top-tier sexy and gives you stature to be the CEO and founder of “YouCo.” It sounds accomplished and powerful when people ask what you do. You get license to say: “I’m the BMOC- Big Man on Campus or HBIC- Head Bitch in Charge.”

Starting a business to give you an ego trip at a networking event is a terrible reason to start a business. That distorted outlook will actually decrease your chances of being successful. So, get over it! If you need that feeling, buy a government savings bond for $50 and cleverly explain that you’re an investor in long-term government securities. Now that’s a safer way to sound top-tier sexy, right?

Everyone Tells You that You Should Go For It.

Ego also interferes when others fuel it. “You’re so smart,” everyone says. “Why are you working for someone else?”

You think you have a great idea; everyone tells you to “go for it” and “make millions” from it. After all, you deserve to be successful.

Well, wait just a minute now. It’s time to do a reality check separate from your ego. Who is telling you this? Who is “everyone”? Is it your sister whose business experience amounts to helping her kids run a lemonade stand?

Ask yourself: “Self, do these people know anything about business- especially, the type of business I am thinking of starting? Are they investing anything in my venture? Are they putting THEIR resources at risk?” If the answer is “no”, their advice is probably worthless. It’s great to receive moral support from cheerleaders. But you can’t allow this to fuel your ego. Ego can turn free encouragement into costly risk. Hedge your bet and consider the source.

How can you check when your ego might be driving your decisions?

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Smart Ways to Manage Your Business Finances

March 25th, 2010 ::

Ever wanted to know what tips and resources you need when running your own smart business in order to manage your finances? David Cotriss wrote eight great tips on how to help your small business handle its finances. You can read the original article here:

Find the best local credit union. Given their frequent willingness to provide loans, finding a credit union that understands the needs of your business can go a long way.

Find a trusted mentor. Access to free help is just a click away, with sites that help connect entrepreneurs with mentors fitting their needs. Having a mentor assist with setting up finances can be invaluable if the person is trustworthy.

Choose the correct accounting software. While software is a mainstay of small business finance, sorting through dozens of choices isn’t easy, since there may be better options for your specific needs than the popular QuickBooks program and related packages.

Consider hiring a bookkeeper. A good, trusted bookkeeper can handle all of the mundane tasks that go along with keeping finances on track.

Accelerate cash flow with mobile payment systems. Mobile payment systems can allow faster and easier acceptance of payments for products and services.

Look into factoring receivables. Accounts receivable financing allows immediate payment for invoices rather than waiting 30 days or longer and tying up working capital as a result. Factoring services advance the amount of the invoice minus a “discount”, or fee (advances of 80 to 90 percent are common), and provide a “rebate” when invoices are paid – the amount depends on how long it takes the customer to pay.

Understand and measure capital versus operational costs. The goal often is to drive down the totals on the capital costs side of the spreadsheet and move more over to the operational side of the equation. Operating costs don’t require complex depreciation calculations and are more easily adjusted from year to year.

Measure bottom line impact by looking at the service budget year over year. Are the costs for delivering a service going up, staying the same or dropping? Figure out how much it costs to deliver specific services to the business such as recruitment, payroll or benefits management. Understanding cost-to-serve offers the business great insight into projects and tasks, how long it actually takes to do them, and as a result how much they cost.

More tips and resources, along with the original article can be found by clicking here.

Capitalism and Social Good – The New Double Bottom Line

March 24th, 2010 ::

Before we dive in, it is important to note that my background is traditional for-profit ventures and my bachelors degree is in accounting. Last year I created a non-profit with two other people and I have been learning about non-profit accounting practices. During this time, I have learned about an emerging trend in corporate giving and for-profit companies doing social good. This new accounting practice is called the “Double Bottom Line” and it is explained beautifully in this article from Entrepreneur.com. Excerpts are below:

From the Entrepreneur.com Article:

What It Is

The L3C, just like the LLC, is a for-profit business structure. Rick Zwetsch, principal partner with interSector Partners–the first L3C in Colorado–notes that the reason you may not have heard of L3Cs is because legislation for them ha

L3C is a hybrid model that allows owners to do well by doing good. The bonus? L3Cs can get funding from sources that have traditionally been hard to tap–such as foundations. The L3C, just like the LLC, is a for-profit business structure. Rick Zwetsch, principal partner with interSector Partners–the first L3C in Colorado–notes that the reason you may not have heard of L3Cs is because legislation for them has only been signed into law in Vermont, Michigan, Wyoming, Utah and Illinois, as well as the Crow Indian Nation and the Oglala Sioux Tribe. However, L3Cs are recognized in all 50 states, and there are just over 100 of them up and running right now. So, no matter where your business is located, you can form an L3C, “Just as you can form a Delaware corporation and do business in Idaho, Colorado, North Carolina or any state in the U.S.,” Zwetsch explains.

How to Organize an L3C
Though the process of organizing an L3C is relatively simple, Zwetsch advises those interested in forming an L3C to seek legal counsel to get it right. Elizabeth Minnigh, an associate with Buchanan Ingersoll & Rooney, points out that currently there are no L3C specialists because the format is relatively new. “However, it will probably be most cost-effective to use someone with some familiarity with the L3C structure,” she says, adding that resources–including sample operating agreements that can advise anattorney how to proceed–are available online at the Americans for Community Development website.

Zwetsch says factors such as the initial and projected number of organizing members and/or managers, growth, and the projected need for capital over time will determine how complicated the organization of the L3C will be.

The cost of organizing itself is relatively low, according to Zwetsch. “interSector Partners filed Articles of Organization with the Vermont Secretary of State and paid a $100 fee.” Zwetsch says interSector Partners then had to register as a foreign entity doing business in its home state of Colorado. “It’s a simple three-page form and a $125 fee.”

Finding Funding
Raising funds is where the L3C has an edge, particularly during economically trying times, when banks are reluctant to loan and angel investors have flown the coop. By becoming an L3C, a business is better positioned to receive a mix of investments from both traditional sources and nonprofit foundations. The latter source of funding is especially compelling because foundations must make Program Related Investments (PRIs) annually to the tune of at least five percent of their assets in order to keep their tax-exempt status.

It’s a win-win because all too often, foundations make grants with no financial return just to meet the deadline. A PRI that generates even a modest return can be beneficial to both the nonprofit foundation and the L3C. It also saves some of the IRS scrutiny because L3Cs are specifically formed to further a socially beneficial mission.

Pete Gingrass, principal partner with Future Point, a Wyoming-based L3C that supports the impact of integrated community development initiatives, says that even with the availability of foundation funds, Future Pointe accessed startup capital from internal networks such as friends, family and personal investments. “We chose not to seek out any institutional funding until we are able to demonstrate our model. Part of this demonstration includes being able to generate enough revenue through our core program activities to sustain operations,” explains Gingrass.

That said, if an L3C owner is looking for capital from PRIs, Gingrass recommends searching through the Council on Foundations database to locate foundations by geographic area. “My second step would be to go through your network tools to see if anyone has relationships with foundation personnel. Building social capital is one of the ways that L3Cs will get funded in the future.”

Another potential source of capital to consider is a micro-finance organization because many have predetermined social missions, too. Though micro-finance organizations have some of the same requirements as traditional lending institutions the L3C’s mission may help make a strong case to snag a loan.However, Gingrass says, “Your L3C status will not provide any leverage to negotiate interest rates.”

Pitfalls and Plusses
While L3Cs’ social missions purpose provides a unique branding opportunity, it also imposes a duty on its owners “to manage the L3C in accordance with this purpose,” according to Minnigh. To that end, Zwetsch says it is important for the business owner to draft an operating agreement that spells out obligations, contributions and other governance provisions, just like an LLC.

While there is no “low-profit police,” Zwetsch says, “Ultimately, social purpose is your guiding star, and if you’ll have to answer to anyone regarding profit, it may be those who fund your L3C or those your L3C serves.”

Bottom Line
The L3C represents a brave new world of social entrepreneurship that Minnigh says depends on the objectives of the people forming the entity and the potential pool of investors.

The immediate success of interSector Partners makes Zwetsch optimistic. “For those with a pioneering spirit, we believe the L3C experience will be fruitful, and the rewards will be many.”

Could you use double bottom line accounting in your business?

What do you think of this new approach? Do you think you could use this in your business?

Leave your thoughts and ideas in the comments.