Choosing client data software
Dear Karen: I’m starting my own small business, and I read your advice about gathering customer data. What software should I use?
Answer: The tough part isn’t finding friendly software but committing to using it routinely. Start with a spreadsheet to manage simple tasks like entering customer lists and contact information.
If you want more options, try a database. “They can be as easy as a spreadsheet to use, but they provide far more control over how data is entered, how it is presented, how it is shared and who can access it. Databases can also make it easy to search and analyze your data, so you can discover trends and profit from insights,” said Richard Rabins, co-chairman of Alpha Software Inc., based in Burlington, Mass.
Sample popular databases and find one that feels comfortable, can grow with your firm and allows you to accept credit card payments, issue refunds and import existing data. The software shouldn’t require programming skills. Look for the ability to securely share data on your network, wirelessly or over the Internet.
“Databases that support Web access can dramatically reshape your business because they make it possible for you to provide secure access to your customers. Better databases will offer advanced features such as ActionScript, XBasic, genies and more,” Rabins said.
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Smart marketing on a low budget
Dear Karen: How can I make my small start-up look professional without a big marketing budget?
Answer: Small firms must be choosy about where they spend money, but with some creativity they can have a professional look and feel. Examine your competitors’ marketing materials and figure out how you want to position your firm. Then go to work compiling your advertising, direct-mail pieces and website.
Get some creative minds together and you can probably come up with a clever company name, slogan and tagline in-house. For your logo, hire a freelance artist or an art student, or go to a graphics firm that specializes in start-ups.
When it comes to your look and image, remember that pictures evoke emotion. “Images can easily convey and reinforce security, sexuality and success; a business just has to know which images to use,” said David Norris, chief executive of OnRequest Images.
Be careful about overusing stock photography. It’s cheap but may not help differentiate you from your competitors.
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Best legal setup for real estate owners
Dear Karen: My wife and I own three houses, two of them rentals, and we plan to purchase more. What’s the most economical way to protect our holdings and simplify tax filings? Should we form an LLC, an S corporation or a charitable trust?
Answer: The most common vehicle for real estate ownership is an LLC, or limited liability company, which provides protection for your personal assets if your company is sued, said Donald Lucove, a certified public accountant with Lucove, Say & Co. in Calabasas.
An LLC is a legal entity, requiring a federal ID number, an operating agreement and tax filing.
“California requires an $800 annual fee for each LLC, but more and more we are seeing clients start a separate LLC for each real estate acquisition, despite the cost,” Lucove said.
It’s unlikely you’d want to establish a charitable remainder trust to hold this kind of investment. “If you want to be philanthropic, extensive tax planning should be done with a qualified tax attorney,” Lucove said.
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