BAM! You found it! Your perfect business idea, along with the best name, logo, and tagline to go with it! You're pumped! You're ready to get out there and make some sales!
But despite your best efforts, you end up with one unhappy customer among the thousands you've served. They're convinced you've ruined their life… and they're going for broke!
On top of that, you've noticed a similar business in your niche that has the same company name and tagline. What's a small business owner to do?!
No worries. Nellie Akalp has you covered.
While registering as an LLC or Trademarking aspects of your business may not be first on your to-do list, Nellie shares why they're important issues to consider as soon as you know you have a viable business on your hands.
On the Podcast
01:15 – Nellie's Second Start-Up
03:13 – Do you have a Fictitious Business Name (We hope not!)
07:23 – What are the Benefits of an LLC or S-Corp?
13:21 – What Good is a Trademark if there are Two Companies Called “Nike”?
19:56 – The Benefits of Registering a Trademark
23:10 – Is Obtaining a Trademark Complicated and Expensive?
27:55 – The $100 Investment that Turned into Millions
30:42 – Back to the Future
34:07 – More than a Million Reasons to be Proud
34:50 – Nellie's Hilarious Mom Moment
Press Play on the Podcast Player Below to hear from Nellie
Nellie's Second Start-Up
CorpNet is actually Nellie Akalp's second start-up! Her first business began in 1997 with her husband, Philip. They were in law school together and saw a need for an online business that provided entrepreneurs with legal filing help so they could get their businesses off the ground.
Intuit acquired the Akalp's company in 2005, and after their three-year non-compete clause was up, the Akalps were still so passionate about helping entrepreneurs in this way that they started from scratch once again and founded CorpNet.
Nellie and Philip have helped over half a million corporations and LLCs to get started by assisting with their document filing and streamlining the process of business formation for them.
In addition to being a brilliant start-up founder, Nellie is a mother of four. She has teenage twins, and 11 year-old, and a 4 year-old.
Do you have a Fictitious Business Name (We hope not!)
If you've never taken steps to become an LLC (Limited Liability Company) or S-Corp, and you're not in a partnership, then you have a fictitious business name.
The default business structure for a solopreneur is called a Sole Propietorship. Many businesses start out this way, but it's not wise to continue with this structure for very long.
Essentially, a Sole Proprietorship allows you to do business under you own name, or a “fictitious business name”. Filing this business type is called a “Doing Business As Filing” or “Fictitious Business Name Filing.”
Although it's easy to get started as a Sole Proprietorship, this business structure offers you zero legal protection. If your business wrongs a third party, and that third party decides to sue, they can go after your personal assets such as your house, car, or personal savings accounts.
So get rid of that fictitious business name, and structure your business as an LLC or S-Corp.
(Note: You should always talk with an accountant and legal advisors. This article does not constitute either accounting or legal advice, but simply recommendations based on experience.)
What are the Benefits of an LLC or S-Corp?
The S-Corp or LLC are the best types of business entities for a small business owner to consider. Since laws vary from state-to-state, be sure to check with your accountant to determine which structure makes the most sense for you.
The Benefits of an S-Corp
- The corporation gets treated as an individual entity. An S-Corp is treated as a pass-through tax entity, so this means, for example, that when a company pays out dividends to its stockholders, you no longer get taxed twice – once at the individual level and once at the corporate level for the small business owner. You are only taxed at the individual level when you receive your dividend, and in this way, an S-Corp avoids double taxation.
- May be entitled to more tax savings. There may be other additional tax benefits and savings related to being an S-Corp, but these vary on a case-by-case basis.
- Corporate shield between you and your business. You have far more protection for your personal assets when you are the owner of an S-Corp. Now, a wronged third party may go after the corporation's assets, but not your personal assets as the business owner.
- Added layer of privacy. Becoming an S-Corp means that the corporation is its own entity. You no longer have forms with your name all over it stating that you're simply “doing business as …….X Company”
- Higher credibility in the eyes of the consumer. Becoming a corporation means that you've taken steps to legitimize your business. You're official.
What are the Benefits of an LLC?
Here's the best news of all! An LLC provides all the benefits of an S-Corp without all of the formalities required to file as an S-Corp.
With an LLC, you have have your cake and eat it too. You get added tax benefits, additional legal protection, more privacy, and appear more legitimate in the eyes of the consumer.
The only formality required for an LLC is to have an operating agreement that's executed by all of the members of the LLC and to file a yearly compliance document.
What Good is a Trademark if there are Two Companies Called “Nike”?
What is a trademark and why does it matter to you as a small business owner?
A trademark is a word, phrase, symbol, or design or a combination of any of these that identifies the source of a product or service and distinguishes it from its competitors. Trademarks can be given for product names, company names, logos, and taglines.However, trademarks apply only to a particular category of goods and services.
For example, Nike Inc. owns the swoosh mark on shoes, clothing, andsporting goods along with the name Nike and the phrase “Just do it” within the sporting goods category. However, there is also a Nike Corporation (a completely different company) who sells hydraulic lifting jacks and machinery.
These two companies, both called Nike, can both exist because each is clearly distinguished within a particular category of goods and services – one in sporting goods and the other in hydraulic machinery.
So what's the point of a Trademark if there can be two Nikes?
A trademark keeps your brand ID safe so that no one else in the marketplace can use your name, logo, tag line, or combination of those for a similar product. Trademarks are still powerful, even though they only apply to a specific category or just a few categories.
When should you Trademark?
If you have a viable business name and you're planning on using it in more than one state, then trademarking your brand name and possibly logo and tag line should be done during your start of business checklist. You don't want others to dilute your brand name or logo by using it on similar products that didn't come from you.
The Benefits of Registering a Trademark
- You're eligible for damages if someone in your category infringes on your name, logo, or branding.
- You obtain the right to use the R symbol instead of just the TM symbol behind your company name and logo.
- You have a streamlined process for securing your domain and usernames on social sites if, for example, someone else is already using your brand name there. It's much easier for you to dispute this use and win the right to be the only person using that brand name.
- You receive stronger legal protection than that of “Common Law Rights of First Use” so it's easier to recover your property and dispute infringements on your brand. (Common Law Rights of First Use does say that if you've registered your business with your state with a given brand name and have done business with that brand name, then you have rights of first use, but this is not nearly as official as having a registered trademark.)
Is Obtaining a Trademark Complicated and Expensive?
Acquiring a Trademark can be a complicated process, but you don't have to have a lawyer to do it. However, a document filing service like CorpNet can help you along without all of the crazy expense that comes with hiring a lawyer.
Below are the steps you'll go through to obtain a Trademark for your business.
- Make sure the name is available for you to register it as a trademark. You can do this by conducting a free Trademark search.
- Be really certain! Conduct a comprehensive nationwide search to make sure no other businesses have any common law rights to the name.
- File your Trademark with the USPTO (United States Patent and Trademark Office.) You can file your Trademark directly online. The cost for a Trademark application is $325 per class. You will register your Trademark under 1-3 classes.
- Filing classes can take 6-12 months, and you will be assigned a document examiner from the USPTO who will review your filing.
- This document examiner may submit an office action to request more information from the small business owner.
This is where things may fall apart for the entrepreneur. If they're too busy and don't respond to requests for more information, the trademark application will expire and they will have wasted their application fees.
Companies like Corpnet ease the stress and ensure the Trademark is processed by taking care of office actions and all correspondence with the USPTO.
The $100 Investment that Turned into Millions
After snagging tons of technical advice from Nellie, we wanted to take things back a few years and find out what it was like to grow a start-up in 1997. Nellie was more than happy to share her story!
She and her husband Philip were both attending law school in 1997. There were in a corporation class at the time, and in the real world, the internet era had begun.
One of the hottest trends at the time was starting a business online because the internet was booming. However, these bright-eyed, enthusiastic internet entrepreneurs often had no clue about the tedious work of filing as an LLC or S-Corp or getting Trademarks for their business.
Nellie and Philip came up with the idea to help all of these start-ups with the legal filing they would need to bring their businesses to fruition.
With a $100 investment, the Akalps acquired a domain name and started their business out of their 2- bedroom apartment. They worked day and night until they reached a substantial amount of sales.
They were able to purchase their first home with their business, and then they acquired their own office space.
In 2005, they were approached the opportunity to be acquired by Intuit, and they said yes! At the time, they had 5 year-old twins and a two year old toddler. Selling made sense so they could spend more time with their family.
The Akalps signed a non-compete clause that lasted for three years. But rather than get used to their (very!) early retirement, they decided to get right back into the business when their non-compete was up.
Nellie and Philip realized that they were too young, too motivated, and too passionate to take on such an early retirement. They love small business so much and couldn't see themselves doing anything else.
Back to the Future
Clearly, starting a business in 1997 is much different than starting a business in 2009. We were curious about the challenges of starting again. Nellie was very open about several challenges that confronted CorpNet in 2009. But clearly, she's pushed past all of them!
- The Recession. 2009 was the height of the recession in the U.S. so this alone made growing a small business challenging.
- Saturated marketplace. In the 12 years that had past between the two businesses, many companies very similar to the Akalps had sprung up.
- Fierce Competition. Not only were the Akalps competing with their old company, but with thousands of competitors offering similar services as them in the much busier online business space.
The Benefits of Starting in 2009
- No barrier to entry. With Google, social networks, and a plethora of online business tools, there's no barrier to entry to getting started with an online business. The landscape was much different in 1997 when just getting a website up was much more challenging and expensive.
- Clear Vision. Having already grown a similar business, the Akalps had a clear vision for where they wanted to go. They weren't distracted by shiny objects but stayed the course.
- Social Media. 2009 was around the birth of the social media era. The Akalps didn't have nearly as many tools to reach and connect with their audience online in 1997. Now, they can market their business in a variety of ways, and they've chosen to be very savvy with social media.
- Content Marketing. Nellie markets CorpNet primarily by putting out a ton of content around their niche. She's branded herself as a small business expert, and she continuously puts out extremely helpful content for her audience of potential customers. People being to know, like, and trust Nellie before they ever pick up the phone.
- Stand Out. Nellie believes that there's plenty of business to go around for everybody. Just because you're entering a saturated market doesn't mean you have a barrier to entry. Look at the market and figure out how you can differentiate yourself to stand out from everybody else.
More than a Million Reasons to be Proud
We love to get inside the heads of the mamapreneurs we interview to find out what makes them tick. Out of everything they've accomplished, what are they most proud of?
Nellie found it difficult to pinpoint just one thing considering everything she's done over the past 18 years, but she cited more than a million great reasons to be proud. Her company was acquired at an early age – Nellie was just 31 years old at the time, and she and her husband had built that company to be so successful that they became multi-millionaires when they sold it.
(Yep, I'd say building a company to that level – along with helping many entrepreneurs along the way is certainly something to be proud of!)
Nellie's Hilarious Mom Moment
Nellie's 4 year-old had us cracking up with one of her funny misunderstandings about how the world works. Seriously, this story is just too good! Tune in to hear it!
Find Nellie's Business Online
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