5 Foundational Tips for Remote Startups

By Laura Lopez on September 20, 2018 

Founders and entrepreneurs leading a remote company face a unique set of challenges when it comes to employee engagement, business operations, and team communication. You’re creating company culture virtually, without the luxury of in-person management. With your team’s increased mobility it becomes more important to centralize and standardize your business practices and keep everyone in sync. 

Thankfully, there are many options to choose from when it comes to affordable cloud-based tools that make it easier for your remote team to collaborate, as well as a wealth of information from companies that have paved the way. If you are about to launch a remote startup or are looking for ways to improve yours now, we’ve got a few core practices that will keep you organized and your team optimized. 

  1. Don’t underestimate (virtual) face time. We’ve written about the importance of remote communication before, but it’s worth mentioning again. A simple way to strengthen rapport with your team is to replace conference calls with video conferences. It’s a great way to connect with colleagues who would prefer to put a face to a name. Start with free, easy to use tools like Zoom, Google Meet, or even Slack Calls
  2. Use the cloud. Storing data in the cloud allows you to access and analyze important information quickly, allowing you to make informed decisions more readily. Instead of creating an Excel spreadsheet that can’t be shared in real-time, leverage free cloud-based apps until you need a heftier tool, like a cloud-based Customer Relationship Management (CRM) solution. Avoid the trap of investing in software that your employees don’t end up using by testing a free tool and implementing norms around use first, and by being strategic about how the tools you’ve put in place interact with one another. 
  3. Put yourself in your client’s shoes. Running a remote company has its benefits as well as its tradeoffs when it comes to your client base. I recently spoke with a customer that was turning down clients that were only able to send payment via mail (paper-based billing is still more prevalent than you think). Since relocating from the US to Europe, receiving and processing payments from abroad was taking too long, checks were occasionally lost in transit, and they were risking not making payroll. A virtual mailbox gives you access to important correspondence, such as contracts or checks, all via an online platform. You’ll have continuity in your mailing address even if you want to travel the world or set up shop in another state. Some solutions, like Earth Class Mail, even offer remote check depositing solutions, allowing you to keep clients whose billing practices might not be as cloud-friendly as yours. 
  4. Start with data. And don’t stop. Without a doubt, centralizing customer and prospect data is a must from the start of your remote-based company. Even if you’re a solopreneur, or work on a small team, begin with something as simple as a Google Sheet, a live document that’s accessible from anywhere. As you add employees, give them access to the Google Sheet and review the data you require them to capture and enter. At a minimum, start tracking your business prospects and customers. Collect relevant contact information and lead source, the product of interest or product purchased, and other data such as the time it took to close a deal, or reason why you lost a deal, to inform future decisions. When the time comes that there are too many data points to manage, move to an affordable cloud-based CRM to centralize customer and prospect data. 
  5. Standardize processes. As you add employees to your team, be sure to communicate and train each employee on the tools you have in place and your expectations on how the team will use them to collaborate. Otherwise, you can end up with disparate data and inefficient processes. Create an onboarding document or training so that you minimize the time you spend bringing new employees up to speed. And don’t think of standardization as infringing on your employee’s autonomy. You’re building consistency into your virtual workplace the way it might be more organically built if you were working in the same office. 

Remember, if you’re just getting started, use free cloud-based tools to build out your core business processes and make it a practice to have all your information living in a central repository. If you and your employees have conquered your business workflows with free cloud-based tools and feel like you’ve outgrown them, it’s time to begin looking for a more specialized solution. 

Stop. Writing. Billing. Code. Right. Now.

Doug Breaker here, CEO of EarthClassMail.com. Writing billing code is hard. Really hard. If you’re wrong by a penny, you’re all wrong.

I used to write billing code as a young developer.  I once made a mistake that cost a client $1,200,000! Oops, not my best day.

Any business not in the business of writing billing code should not write billing code. Outsource it instead.   

I guarantee it will save you time, make your other development faster, and save your sanity. Spend time building your competitive advantage, not wasting it writing billing code.

At Earth Class Mail, we use Chargify (Full disclosure: Scaleworks owns both Chargify and Earth Class Mail.  We used Chargify well before Scaleworks bought them).   

When I ran HomeFinder, we used Recurly and liked it.   Stripe’s subscription functionality offers a ton of time savings and robust tool set.  Check them all out, all offer immense developer time savings vs. developing your own billing system.  

Repeat after me ten times, “we will not have developers spend time on billing code!”

CRITICAL TIP:  before you choose, ask yourself, “will we ever want to charge for something like ‘get 20 widgets for free on our $99 plan, and 40 widgets for free on our $149 plan and charge for widgets over those amounts?'”

If you answer “yes”, then keep reading for a MASSIVE difference between Chargify/Stripe/Recurly.    This one tip can save you months of developer time, make you more money, and launch your products faster.

Let me explain with two real world examples, one using Recurly, and one using Chargify.

Example 1: Offering Free Usage on Recurly

My wife runs a little site called MovingCompanyReviews.com.   The site lets consumers read 100% verified reviews from moving companies and get free quotes from them.   For example, check out all the reviews for Tampa movers or Orlando movers.  

Consumers can even get a free pizza on their move day if they find a mover through the site. Who doesn’t love pizza on their move day?


(Quick backstory: Before I took over as CEO of Earth Class Mail, I was CEO of HomeFinder. While at HomeFinder, we launched MovingCompanyReviews.com as an internal startup. After I left, Placester bought HomeFinder about 6 months later. Placester didn’t want MovingCompanyReviews.com, so we bought it from them.)


We offer a product to moving companies called “Review Advantage“.   For that product we email prior customers of moving companies and collect reviews on behalf of the moving companies.   

We offer the first bunch of customers to write a review per month a free Starbucks coffee. The product used to be manual, but we just launched an automated version.  We set out to offer different plans with different number of free coffees:

  • $19 per month includes 3 free customer coffees
  • $99 per month includes 15 free customer coffees
  • $299 per month includes 50 free customer coffees

After we hit the free coffee limit, we wanted to charge the moving company a certain amount per coffee.   Here’s how it looks to our movers:

Here’s how we set that up on Recurly:

  1. Set up a “Measured Unit” for free coffees
  2. Set up the pricing plans, including a billable add-on for the extra coffees.  Here’s the $19 plan.
  3. Write a bunch of custom billing code to do the following:
    • Keep track of how many free coffees we’ve given in a billing period
    • Report any coffees over that the free limit to Recurly
    • Reset the counter when a customer’s billing period renews

That’s not easy code to write!   We did it, but it took our developer about three weeks of hardcore coding time to get it correct, get automated tests in place, and get fully confident that it worked.

Recurly gives us a ton of benefit, and we enjoy using it.   Unfortunately their metered component functionality still required us to write complex billing code in order to give away a different number of free coffees by plan price point.   

We made the investment because it was worth it.   However, we’d much rather spend our coding time helping consumers find great moving companies.

Example 2: Offering Free Usage on Chargify

Here at Earth Class mail, we just launched a killer new check deposit/lockbox product on Earth Class Mail called CheckStream.    

If you’re a business that gets checks, it can revolutionize the way you deposit them and record payments in Xero or QuickBooks Online.   

You can deposit any sized check into any bank in the US without going through any application process, or worrying about per check credit limits.    

Once you deposit the check, you can record payments to customers & invoices right from our app into Xero & Quickbooks online.

We launched with three pricing plans, each with a different number of checks included.   

  • $99 per month includes  30 check deposits
  • $249 per month includes 125 check deposits
  • $499 per month includes 265 check deposits

If customers pass those limits, we charge $2 per check deposit on the first two plans, and $1.90 per check on the $499 plan.

Thanks to Chargify’s new price point functionality, charging for this is a breeze.   

Check out how easy Chargify made it to set this up:

  1. Set up our 3 plans, here’s the $99 plan.
  2. Set up our metered “check deposit” component, with the three different price points.
  3. Configure each price point to include the correct number of free check deposits, see screenshot below.  
  4. When someone signs up for a plan, set the correct price point on their subscription (we do this in our ordering code, but you can do it via the user interface as well).
  5. Ship it!   That’s it!  Since our app already tracks which plan a customer is on and reports check deposits to Chargify, we didn’t have to do anything else.

Notice the step we didn’t have to do?   Write complex billing code!    Magic!    

Chargify saved us weeks or months of development & testing time.  Instead of spending weeks or months coding & testing, we launched the new plans in days.  

So do you and your company a favor, don’t write billing code!   After having hands-on experience with various billing solutions, Chargify has been the clear winner for Earth Class Mail’s needs, but I encourage you to check out all the options before committing to a provider.

Going with any will save you development time and future tears when your custom billing code breaks.    

However, make sure you bump your current and future billing scenarios against each provider to make sure you don’t get sucked back into the swampy quagmire of billing code development.

Lastly, if you’re a business that gets check in the mail, check out our new check deposit service, it’ll save you bunch of time, get money in your bank account faster, and save you from keying in payments in Xero and Quickbooks Online.

The Path To More Billable Hours

Professional services businesses represent a huge chunk of the U.S. economy. Legal services alone account for nearly $250 Billion in revenues and over one million employed.

Many of these firms rely heavily on billable hours for their primary revenue stream. The story is basically the same whether it’s a law firm, CPA practice, management consultancy, or similar business. 

The problem is that so much of the day-to-day work that goes into these businesses isn’t billable. This rings especially true if it’s a solo-practice or small firm. 

It’s not uncommon to spend up to two-thirds of your time in a solo-practice working on non-billable tasks such as billing, accounting, and marketing to new clients.

Obviously, all those things are valuable. However, it’s important to understand where your time is best spent. 

For example, a typical attorney may bill in the $200-400/hr range. Is that half-hour they spend each day sorting through mail worth the hundreds lost in billable hours each week?

There is a path to reduce the non-billable work…

Download the white paper, Four Steps to Cut Back on Your Admin Costs & Increase Billable Hours

Five IRS Tax Tips for Expats with Small Businesses

This is a guest article by Hugo Lesser @ Bright!Tax

A lot of entrepreneurs choose to run their small business from abroad. For some it’s a way to get around work visa requirements, for others it may be a tax savings decision, and many are simply drawn to the expat lifestyle. 

Unfortunately for you, the IRS still needs to get theirs. If you’re a U.S. citizen, you need file a federal tax return each year.

There are a few critical steps you can take to minimize your tax liability, and several important considerations that are unique to expat tax returns.

Use your expat status to reduce tax liability

You’re not going to escape the IRS, but to their credit they are accommodating toward expats. 

There are some key exclusions that allow you to partially reduce or entirely eliminate your U.S. tax liability.

The most common is the Foreign Earned Income Exclusion (FEIE), form #2555.

The FEIE allows expats, who can prove that they’re living abroad, to exclude the first $100,000 (inflation adjusted) in earnings each year. 

The threshold for expat living abroad is as follows, per the IRS website:

“You are considered to live abroad if you are a U.S. citizen whose tax home is in a foreign country and you have been present in a foreign country or countries for at least 330 days out of a consecutive 12-month period.”

If you’re in a foreign country with a higher income tax rate than the U.S., then consider the Foreign Tax Credit (FTC) form #1116.

With the FTC you can claim a dollar for dollar tax credit for any income taxes you’ve already paid abroad, and potentially eliminate your entire IRS tax bill.

Bonus: The FTC credits rollover for future use.

Deadlines still apply so you have until June 15th to file, with a further extension available until October 15th upon special request.

Single-member LLC’s are your wallet’s best friend

Limited liability corporations registered in the U.S. with a single owner are considered ‘disregarded entities’ by the IRS.

Huh? Well, that means they don’t require separate corporate reporting, and any revenue or expenses can be included on the owner’s personal tax return.

There’s a catch though, you need to “elect” to be considered a disregarded entity by filing a special form, form #8832 (#8858 in subsequent years).

Doing that allows you to use the personal exclusions mentioned above against your corporate profits.

The IRS knows your bank account balance

You’re required to report any foreign bank or investment accounts if the total value of their combined balances is over $10,000. 

Any bank account that you have control or signatory authority over qualifies, including small business accounts, even if the account isn’t in the your name.

For example: if you have a personal savings account and control over your small business account, and the two balances combined had a value of over $10,000 at any time during the tax year, you will need to file a Foreign Bank Account Report (FBAR).

Foreign banks report their U.S. clients’ account details to the U.S. government, so the IRS knows who should be filing. Penalties for not filing are substantial. 

If you ignore this requirement, you will get penalized. From the IRS website,

“For willful violations, the inflation-adjusted penalty may be the greater of $124,588 or 50 percent of the balance in the account at the time of the violation, for each violation“.

If business is good, the IRS wants to know

The Foreign Account Tax Compliance Act (FATCA) requires expats to report their foreign assets (not including tangible assets such as property) if they are worth a total of at least $200,000 at any time during the tax year.

Qualifying assets include savings and investments, and small businesses.

If your investments and the value of your small business pass this threshold, you should report them.

You’re still going to pay for Social Security

Sole proprietorships and single owner LLCs registered in the U.S. are required to pay Social Security taxes.

If your business is registered abroad on the other hand, you aren’t.

Certain countries have Totalization agreements with the U.S. A totalization agreement means that you won’t be penalized with a requirement to contribute to two separate social security programs.

There are dozens of countries that qualify including, but not limited to: Australia, Canada, Denmark, France, Germany, Ireland, Japan, Norway, Poland, South Korea, and the United Kingdom. 

You can view a complete list of Totalization Agreements here.

In countries with Totalization, you can opt to have your foreign social security taxes credited toward your U.S. future social security benefits.

Wrapping up…

Filing U.S. taxes as an expat small business owner can be complex, and this article is not comprehensive.

The IRS offers an overview of the rules and required forms, just remember that mistakes can be costly.

As with anything tax related, consult a licensed professional for your specific needs.

A More Typical Startup Story…

It’s easy to become infatuated with Startup Culture. Attention grabbing headlines, founders dating Victoria’s Secret models, fast cars, and giant houses.

If it all sounds a bit cliche, well…it is. It’s a story as old as the idea of free enterprise itself except that today entrepreneurs can do it without building a skyscraper, laying down a transcontinental railway, or putting a million cars on the road.

Heck, Slack went from $0 to $1,000,000,000 in 8 months – with a messaging app! Anyone remember AIM?

The reality of a small business journey for 99.999% of the entrepreneur population is very, very different. It’s a lot more like our story, 10 years in the making and still going – still growing.

Read the complete article here, from our friends at Chargify.

Small Business Credit Building – Part 2

In Part 1, we reviewed the table stakes for getting past that first underwriting stage in the SMB loan qualification process. You’ll need to go through those steps at a bare minimum just to comply with automated qualification requirements.

This edition is all about establishing a business credit history in preparation for a loan.

It’s a lot like building personal credit history – there are credit reporting bureaus, payment history, credit utilization, and account age factors to consider.

A few key differences:

  • Unlike personal credit scores, which range from 300-850, business credit scores usually range from 0-100 (Equifax is different). 80+ is considered “very strong”.
  • Experian, the largest business reporting bureau, will open a report for your business based on public records data. As soon as you complete your corporate formation and get any vendors reporting, they will open a file on you.
  • Certain ratings agencies, like Creditsafe, will provide credit limit recommendations – that is, advising on how much credit your business should have outstanding at any time.

Let’s jump right in…

Establish A Business Credit Profile

There are actually several credit reporting bureaus that you will need to actively manage, and it’s all part of building up the right business credit profile.

It’s not unlike personal credit building, except that business credit is much more precise in its tracking. For example, personal credit reporting is based on 30 day increments.

So if you pay your personal credit card bill 29 days after it’s due, you’re on time. If you pay 10 days before it’s due, you don’t win anything.

With business credit, reporting is done to the day. Paying early actually has a marked advantage, and paying late by even a day will hurt you.

Experian Smart Business credit file

Experian is the biggest and easiest to get started with. Their reporting guidelines for vendors are the most open, so you can build up a history quickly.

Setting up your Experian Smart Business Report is free. They are used by a wide variety of lenders to make decisions.

The majority of commercial banks, leasing companies, business credit cards, and many trade vendors report activity and trade lines to Experian. 

If you can’t find a file for your business yet, one will be available within 30 days of the first payment reported.

There’s a very detailed FAQ on the Experian Smart Business Report here.

Creditsafe business credit file 

Creditsafe is the largest global business credit agency, but new to the U.S. scene.

Regardless, over 10,000 creditors and lenders already rely on them for evaluating business loan qualification. There’s a very strong chance your lender will look at this report as well.

Unlike other bureaus, Creditsafe also provides credit limit recommendations to lenders. That is they recommend the total amount of outstanding credit that your business should have at anytime. 

Dun & Bradstreet DUNS number and open file

D&B tends to be considered the go-to source for Net-Terms credit reporting data. Which is great if you have access to trade lines with vendors.

D&B won’t issue a DUNS# or D&B rating until you interact with them directly. You’ll need to first request a DUNS#, the free path takes 15-30 days for them to setup.

You can also sign up for their credit builder product to expedite everything, and get access to your PAYDEX score as an added bonus.

You’ll have another score to monitor here. Unlike the other credit bureaus, D&B uses a PAYDEX score to provide instant creditworthiness feedback to lenders.

A PAYDEX score of 75 is considered, by many, the minimum to be qualified for the best business financing opportunities.

If you just pay all of your business trade and credit lines on-time, that is within the terms established for each line, you will get a score of 80.

PAYDEX rewards you for paying early, averaging payments 30 days earlier than required is the only way to reach a perfect 100. It’s also worth noting that each credit line is weighted, so frequent big payments will carry more weight than infrequent small payments. 

Equifax Small Business credit file 

Most U.S. banks and business credit cards underwritten by banks report to Equifax. Equifax is typically slower to open a file on your business than other bureaus.

Like the other bureaus, your Equifax Small Business Credit Risk Score is determined heavily by timely payments. Equifax is not very open about all of the factors that go into the score though, so it is a bit of a black box.

The score itself is on a scale of 101-816, with higher equal to less credit risk.

The Equifax report also provides lenders with a Business Failure Risk Score. On a scale of 1000-1880, with higher scores equal to lower risk. This score is paired with a “class”, 1-5 with 5 being most risky, and a percentile.


Money in the bank

Your business banking history is tracked, scored, and relevant to your creditworthiness. It’s commonly called a “bank rating” and you’re graded on a graduated scale.

The bank rating scale is based on the average balance in your account for the last three months, and it takes into consideration any adverse history such as bounced checks.

Lenders want to see that you have enough cash on hand to service debt, that you’re using it responsibly, and that you’re keeping a cushion.

A “low 5” rating is usually what lenders want to see when you’re applying for a loan. To be in that range, you need at least $10,000 in the bank on average for three months and no adverse activity on the account.

This tends to be a non-negotiable condition for lenders.


A line of credit from a vendor

Well, you actually should aim for at least 5. That seems to be the magic number to establish your business and ease lenders’ concerns.

A line of credit from a vendor is basically the ability to pay a vendor on Net terms, usually 15, 30, 60, or 90 days. That means, you get something from the vendor and the net balance is due X many days after you receive the vendors service or product.

It’s actually pretty easy to set these up for common business purposes. Frankly, you might have some already and not even know it. Many business supply companies, like Grainger, will extend small trade lines of up to $1000 to any real business with an EIN and a DUNS#.

The key factor to remember here is that these are only impactful if use the trade line consistently, monthly, and pay it down in full each month…on-time.

Business credit cards

Revolving credit accounts are a powerful tool to build your business credit rating, just like they are with personal credit. 

Once you have your credit files open and vendor trade lines reporting, you can begin applying for business credit cards.

The business credit cards you want are just those that report to your business credit profile, and are in no way linked to your personal credit file. 

Not all business credit cards will report to just your business credit profile, so be selective. Some may require a personal guarantee, which is OK to provide in the beginning. 

A business loan from a bank

You might be asking yourself, “do I need a loan to get a loan?”. The answer is no, you don’t.

BUT, if you want to expedite building your business credit history AND increase the odds of securing a more substantial loan amount with better terms, then this is important.

It’s not a catch-22, you can get a low-value business loan pretty easily when it’s secured. That means you place a deposit with the bank in an interest bearing account like a Certificate of Deposit, in turn the bank will give you a loan for the exact value of the deposit.

You pay it off, then you close the CD and recover your payments. The net cost to you is just the difference in interest rates between what you earn on the CD and what you pay on the loan. Secured loans tend to carry low interest rates as well.

To take full advantage the loan has to be in your business name and using your business EIN, with payments coming from your business bank account. Early payments help expedite your credit building as well.

If you think this feels like cheating, it’s not. Secured business loans are common, here’s an offer page at Bank of America.

There are lots of legitimate reasons for a secured loan, and building your business credit is one of them.

Wrapping It All Up

Taking the above steps will get you on track to secure a more substantial business loan within as little as 1 year. In the next article, we’ll discuss a Small Business Administration specific requirement, the SBA business plan.

Avoid The Top Small Business Financing Mistake

We’ve written a bit before on the best options for small business financing sources. This time we’re going to focus on clearing that first hurdle for a small business loan.

At some point your business financing needs will outgrow the most common sources, namely cash. Whether that’s coming from personal savings, friends, or family – that well will run dry.

Let’s Review A Bit, Equity vs. Debt

Equity financing is a great option for a growth focused company, especially those with valuable intellectual property or favorable market dynamics. You can get the capital you need and avoid the overhead that comes with servicing debt.

Globally, venture capital activity for the Americas exceeded $72 billion in 2016, according to KPMG. The average deal was in excess of $8 million…one more time, the average deal was in excess of $8 million.

Obviously there’s a lot of money floating around on the equity side of things, but the average deal size is also a really good indicator of the types of businesses that win these deals. That is, growth companies.

For the most part, your small business is not going to be competitive when it comes to equity financing.

On the other hand, debt financiers absolutely love working with cash flow (aka “lifestyle”) businesses.

Your local credit union, or a specialized business lender, is going to care much less about your ability to generate a 100x return when you sell the company and much more about the reliability of your cash flow.

All of that makes debt financing a very common source of small business capital for entrepreneurs. In 2016 alone, the Small Business Administration funded more than $17 billion in small business loans.

The average deal was worth a bit over $370,000, a figure likely to gel with the needs of most SMB owners looking for capital.

Interestingly, over $6 billion of those 2016 SBA loans went to new businesses, which is especially impressive. The average deal there was just under $330,000. Again, a much more likely scenario for the typical small business entrepreneur. 

The true beauty of debt financing is that it’s a mature and liquid market. Honestly, how many VC’s do you know? What about angel investors? 

Now think about how many banks are in your neighborhood.

The First Test Is The Most Important

With that maturity comes a lot of volume, the SBA alone did nearly 6x more deals than all VC activity in the Americas. As you’ll learn, there’s a very defined process for securing a business loan.

Nearly all business lenders will follow a similar process, and the first step of that is commonly referred to as “Lender Compliance”.

This tends to be automated by the lender’s pre-qualification system. It’s basically an algorithm programmed to score your business’ risk using a pre-determined set of parameters.

If it sounds a lot like a test, it is. It’s just not one that you would study for, but rather one that you have to complete before applying for a loan.

The vast majority of rejections happen at this very early stage, during the compliance process. 

There are twenty common lender compliance items to prepare for, we’ll focus on eight in this post that are all about legitimizing your business identity – the others will be covered in an upcoming post.

Most lenders will check some of them, but there’s no way to know in advance which items they’ll look at, so you need to cover all of them before you start.

Legitimize Your Business

1. A real, registered business entity with the state

That means you don’t operate as a Sole Proprietorship, but are registered with the Secretary of State as some sort of Corporation, LLC, or the like.

This is a super easy thing to do. You can get it done online in under an hour for most cases, and the cost is generally a few hundred dollars.

There are plenty of providers out there happy to help you, including LegalZoom, USLegal, IncFile, and Incorporate.com just to name a few.

If you don’t have this done, you will be automatically rejected.


2. An EIN, or Employer Identification Number

This is basically the tax ID for your business. When a business is registered as some sort of corporation, you assign tax obligations to the business rather then a personal social security number.

You can complete this directly with the IRS, there’s no charge.

If you don’t have this done, you will be automatically rejected.


3. A bank account

You can’t use a personal one, and you’ll need to take care of 1. and 2. in order to set this up. The lender wants to see that you’re treating this as a real business, keeping the finances separate, and that the bank has cleared you for an account.

The longer your bank account is open, the better. Balance and transactions aside, account age is an important factor. The day you open the account is the day lenders will consider your business started.

For the most part this step is free, although you might need a minimum balance to avoid fees.


4. Business licenses

Everything that is required by the Federal government, state, county, and city will be required for your loan approval. The lender will ask you to detail what you have, along with the address your business is registered to.

Common Federal compliance requirements are liquor and firearms licenses, if you deal with either of those.

For state and local compliance you may have occupational licenses (e.g. financial services), agricultural licenses, pollution permits, weights and measures certifications, and the list goes on.

The SBA website is a great resource for additional information by state. Some of these will cost money, or require approval from an oversight body.

Lenders will confirm with each records-keeping body that all of the licenses and permits are active, and in good standing. If you’re missing any, you will be automatically rejected.


5. A real business physical address

The lender will check with the USPS on the type of address your business is registered to. It must come back as a “commercial” delivery point.

80% of business lenders will outright reject an application that is tied to a residential address.

Home based businesses are statistically more likely to fail, and they’re much less likely to have the right cash flow for debt servicing.

That also means no PO boxes, and no mailbox store addresses. Earth Class Mail street addresses will work for these purposes.


6. A unique phone number

A phone number that is not registered to your home address, personal SSN, or personal bank account will be required here. 

There are plenty of inexpensive solutions for this, you can cheaply lease a toll-free or local number from services like Grasshopper. Register it under your business name, use your EIN, and setup billing to your business bank account.

It’s not guaranteed that this will be a factor, but it’s any easy item to check off the list. 


7. Directory listing with 411

Yes, it’s still a thing. Lenders move slowly when it comes to changing their requirements for qualification, even though the world long ago moved on from calling into directories.

It’s a lot easier than it used to be though, VOIP numbers and cell phones will work for directory listing. So in this case, take care of 6. and then get your number listed for your business – make sure the listing matches your entity name or DBA.

There’s a free service for this, but you can also go directly through Whitepages or some carriers like Verizon.


8. A real website and business email domain

That’s right, businesses without websites and those that can’t be found easily via search engines are more likely to fail. Lenders will look at whether you have a website, and if your business email address is custom or branded.

Unfortunately, [email protected] is not going to fly. You need something business appropriate, like <first name>@<your website> to pass this check.

There are plenty of inexpensive solutions here. You can easily buy a domain for $10 per year, GoDaddy is a good place to start and there’s Google Domains as well, among thousands of other options. Setting up an email on your new domain just takes a few minutes.

On To The Next One

Consider 1-8 table stakes for getting consideration from a business lender. There’s really no way around them, you need to throw in some chips just to play.

Fortunately, it’s not all that expensive to fill in any gaps you may have. 

In the next post we’ll dive into the remaining items, all focused on establishing and building your business credit. Stay tuned!

Spotlight: Meet Russ Perry and DesignPickle.com

Our customers rock. We love to share their stories, and are thrilled to introduce you to the next customer in our customer spotlight series. Russ Perry is the Founder of Design Pickle, the world’s most helpful graphic design company – offering flat-rate, unlimited graphic design help to businesses large & small.

Thanks so much for sharing your story, Russ. Can you tell us a bit about yourself and your company? What does Design Pickle do, and what sets you apart?

Of course! The long & short of it is this: Design Pickle is a flat-rate, unlimited graphic design service. We’ve got one monthly rate for unlimited requests and unlimited revisions.

No more wondering who’s working on your request each time, or worrying about revisions and scope of work driving up the cost of marketing materials!

Design Pickle solves a lot of problems for just about everyone, from the small business who doesn’t have an in-house designer to the entrepreneur who shouldn’t be spending time trying to put Facebook ads together for hours on end.

Our mission is to be the most helpful design company in the world, and that starts with alleviating the daily stress for our clients. 

How did you get started and why?

After about a decade in the creative agency arena, I found myself needing a change. I switched to individual consulting, but realized I didn’t want to be stuck designing business cards instead of getting to use my skills on a bigger level.

So I created a beta system of what would become Design Pickle – helping clients request their day-to-day production graphic designs. It kind of blew up after that!

Do you have an incredible customer success story you can share?

Is it a total cheeseball response if I say I have a million of those? Yes? Ok then.

ONE that really stands out to me, and I just shared this with my team, is from a client who co-founded a great online start-up helping people be the best version of themselves.

Before finding us, she would agonize over blog post images and Facebook ads, trying to do everything herself and losing sight of what she was really working so hard to achieve. Her big-picture wasn’t in the picture because of the minutia.

It wasn’t until we were at an event here in AZ when her husband (and biz partner) came up to me and thanked me for giving her back her time, and in reality, her life!

She’s now able to focus her incredible talent & energy on growing their business and truly enjoy the “why” behind starting the business in the first place – building a community that will impact the world for good.

Bottom line, helping someone with a few simple graphics for marketing collateral can have a much bigger effect than I ever realized. I’m proud of my team for that.

Can you share a tip, trick, hack, tool or service with our readers that makes you better, or makes your days more effective?

I’m totally NOT a micromanager, but need to keep tabs on where my Pickle People sit on both big projects and daily dealings alike.  We use Trello for managing event plans and content strategy, and I Done This for the day-to-day tasks.

We get the satisfaction of checking off the to-do list each day in I Done This, but can keep big-picture plans moving via Trello boards.

What was the situation before you used Earth Class Mail, tell us how EarthClassMail makes you better at your job, or your company better at what it does?

I think we were in a pretty standard situation for location-independent teams. I had my home office, my team had theirs, and we’d convene regularly to calibrate our plans at the local coffee joint.

I didn’t want my home address used for mail (read: my wife wasn’t thrilled by the idea of our humble abode’s location being broadcast to the world). Having a P.O. Box is the simple answer, but no street address lends itself to the “ehhhh, is this a legit business?” from clients & potential partners.

Plus you have to GO to a post office regularly to collect said mail (they don’t mess around when you neglect to pick up mail regularly. The disapproving side-eye from the clerk is the stuff of nightmares).

I found ECM and immediately knew it was for us. Secure, consistent, reliable, friendly. It’s kept me on top of the important mail and simplified the check deposit scenario for us.

What has Earth Class Mail been worth to your business in terms of $?

Let’s see…by my calculations *carry the one*…Can I just say it’s been “priceless”? Because seriously, the peace of mind knowing that no Design Pickle team member is spending their time sorting through pre-approved credit card offers and penny-saver ads is especially valuable to me.

What would you say to someone considering Earth Class Mail as a solution?

DO IT! Right now! How you wouldn’t see the obvious perks of this service is beyond me. Until everyone on this planet goes green & moves to digital correspondence, this is your ultimate weapon against wasted time.

What feature can we add or improvement can we make that would make you say, “shut the front door, I need that!”?

Would you consider a service that sends thoughtful replies to Aunt Irene’s annual family status letter? How about going through my spam folder so I don’t miss out on that “Earn_thousands in ur sleep with this 1 $imple Hack” email?

Other than that, I think you’ve got all my needs covered!

Thanks so much for taking the time to chat with us today, any parting words or advice for our readers?

Thank you for having me! I think my honest advice would be to make sure you’re systemizing or automating every task you can… just because it’s important enough to do, doesn’t mean you have to do it yourself!

Free up your bandwidth to focus on making moves and growing your business!

Also, pickle juice is an amazing option for relieving muscle cramps, so if you’re an active person, make sure you’re stocked up…knowing is half the battle. 

11 Mistakes To Avoid When Selling Your Business

Guest post by Greg Elfrink @ Empire Flippers

The majority of entrepreneurs build their businesses to, one day, sell them. You dream of the big exit, that payday that will line your pockets with enough cash to validate all your work.

Since selling a business is a complex process, there are many obvious pitfalls and mistakes that you can make.

Some of these mistakes can cost you a lot, as you’ll read below, but the good news is that the majority of them are pretty easy to avoid with a little advance planning.

What Are the Top Mistakes?

While this list is by no means exhaustive, below are some of the most common mistakes we see at Empire Flippers when people list their businesses for sale. 

#1 Don’t take your foot off the gas

Many entrepreneurs seem to check out once they list their business for sale. They put up the “For Sale” sign and wait around for a big paycheck.

This is one of the worse things you can do.

Unless your business is truly passive, this attitude will result in a revenue slump. You take your foot off the gas and the business starts tanking.

The next month, when you need to update earnings with depressed revenues, be ready for a wakeup call – the value of your business has fallen.

When a potential buyer finds sees the downward revenue trend, they’ll be much less open to paying the asking price. You’ve provided leverage for them to negotiate the price down, or simply deterred them from considering your business in the first place.

The lesson here is simple: Work on your business as if you are not selling it.

It’s common sense, but many entrepreneurs often forget this piece of advice while daydreaming about their big exit.

#2 Don’t wait until the last minute to implement analytics

Every digital, online business should have tracking installed to validate how much and what kind of traffic they are getting.

The two most trusted forms of analytics are Google Analytics (Free) and the third party analytics company Clicky. These are what we use.

The more analytics history you have, the better.

You’ll also want to be diligent about annotating your traffic and accounting for any huge spikes or dips in traffic.

For example, write clear notes if a spike in traffic from three months ago came from a Facebook ad experiment. That way, a potential buyer can understand the history of the business.

You need at least six months’ of analytics history, and the longer your track record the better off you will be.

#3 Don’t skimp on proof of income

Screenshots are great. They are also very easy to photoshop.

Depending on the business, there will be different ways to verify income. A seller should have a way to allow the buyer to see the business’ cash-flow, as well as the expenses tied to the business.

If you have an AdSense or Amazon affiliate site, for example, you could give a potential buyer view-only access permissions to your account.

This is an excellent way to help a potential buyer verify your earnings and build trust between you and the buyer.

Of course, how you show proof of income will vary depending on the monetization strategies you are using. An Amazon FBA business, for instance, would need a detailed P&L (Profit & Loss report).

Whichever monetization strategy you are using, make sure you have some sort of verifiable proof of income.

#4 Don’t list too soon

If your business has only been around for three months, it is unlikely anyone is going to purchase it.

Does it happen? Sure, but not often and the task of selling a business that young is very difficult.

Similarly, asking price and track record have a strong correlation. A business valued at seven figures is going to need a lot more history to attract a buyer than a business priced in the four or five figure range.

At the end of the day, the more history your business has, the better. Not only will it create more buyer confidence, but it can help improve your multiple as well resulting in a higher valuation — which is what we all want.

#5 Don’t overprice

With new sellers especially, selling a business on potential is a super common issue.

There is a lot of emotional investment in the business that doesn’t translate into actual value. It’s easy to overprice your business because of this, and could have an adverse effect on potential buyers.

It is best to sell your business based on what it is doing right now. You can feel free to highlight growth channels that a new buyer can use, but it shouldn’t be the main selling point.

Instead, frame your business so that the right buyer can imagine the potential growth channels themselves.

If you’re hung up on the potential, then don’t sell it yet!

#6 Don’t ignore your business’ shortcomings

One of the best ways to help a buyer realize the growth opportunities for a business is to highlight the flaws.

Many entrepreneurs shy away from this, but a lot of buyers find businesses with flaws extremely attractive – they see opportunity in the untapped potential.

You should be totally transparent with everything about your business, especially the parts where you feel the business is failing.

If you have a SaaS business that has a healthy cash-flow but no marketing whatsoever, then that is a huge opportunity for the right marketer.

If you have a giant content site where the majority of the articles have no internal links pointing towards them, then that is a huge win for an advanced SEO.

More often than not, your business’ flaws can become one of the greatest selling points.

#7 Don’t forget documentation

Running your business, any business really, requires some proprietary knowledge. The clearer the path is for a buyer to take over and get ramped up quickly, the easier it will be for you to sell.

One of the best techniques is to have detailed standard-operating-procedures (SOP) for every position and role in your company — the more detailed, the better.

If you have a team in place that you will be taking to your next project, this is even more important.

#8 Don’t dig your heels in during negotiations

Nothing kills a deal faster than a seller unwilling to work with a buyer.

Selling your business is all about how willing you are to make a deal. Think outside the box, with your end goal in mind. The higher your asking price, the more flexible you need to be with deal terms.

There are other forms of negotiations outside of price. It will come down to what you can get in exchange for the cash you’re asking for upfront. Here’s a short list of considerations in exchange for cash:

  • Equity – you can keep some equity or shares in the business in exchange for less cash.
  • Royalties – you can collect a percentage of every sale in return for a lower upfront price.
  • Monthly payment plan – you can spread out a chunk, or all, of the selling price over a set term.
  • Include less – you can adjust what’s included in the sale price to meet a buyer in the middle.

#9 Don’t neglect qualifying Buyers

You should have some kind of system to minimize “tire-kickers” who aren’t really qualified to buy your business.

You could have a deposit process like we do at Empire Flippers, where every buyer needs to put down a refundable deposit before they’re allowed to look at the intimate details of the business.

This will help get rid of the “lookie-loos,” and leave you with just the more serious potential buyers.

You can qualify buyers in other ways, of course, such as by having extensive Letters of Intent (LOIs) in place.

The majority of business brokers will take care of the qualification process for you, but if you are selling on your own, you definitely want to make sure you have some kind of process to weed out unqualified buyers.

#10 Don’t ignore professional brokers

Obviously, I’m a bit biased when it comes to using a professional broker. The broker industry can be a shady place, with a lot of fly-by-night brokerage businesses.

Despite this, a good, legitimate broker can make the entire process of selling your business far easier.

Here are just a few benefits worth considering:

  • Buyer reach – most private sellers will not have an email list of tens of thousands of hungry buyers looking for good deals.
  • Negotiation & deal structuring – brokers literally live and breathe the deal making process, which can take a lot of pressure off the seller.
  • Qualifying buyers – remember mistake #9? Pretty much all good brokers have processes in place to make sure only quality prospects are looking at your business.
  • Market valuation – not sure what your business is actually worth? Brokers are some of the few people around that have their pulse on the market and how much a digital business is going to be worth. 
  • Migrations – this is something we’re about to talk about below, so keep reading.

Every case is unique and this should be a decision you think critically on before selling a business — or buying one, for that matter.

#11 Don’t neglect the transition details

One of the most tedious aspects of selling a business is migrating everything over to the new buyer.

Before you sell your business, you should really consider HOW you are going to transfer the business over.

Create a checklist of everything a new buyer is going to need or want to know when it comes to taking over the business.

Outline everything — content, domain, hosting, product inventory, the various services you are currently paying for that will need to be switched over, etc.

You will also want a way to mitigate fraud here, especially in smaller deals where fraudulent activity is likely to be more common.

The last thing you want to do is to push your business’s website domain to the new owner and have him or her fail to pay for the business, while reaping the rewards of owning the domain.

One way you can mitigate this is by using an escrow service. Even then you want to be careful, because many escrow services will not be overly familiar with the online business space and could make some very bad mistakes.

To come back to our previous mistake about sellers not using brokers, most professional business brokerages have a migrations process already in place.

This takes a ton of weight off your shoulders and is definitely worth considering, depending on what kind of business you will be transferring.

Preparation Is Key

As you can see, these 11 mistakes can really make or break the business sale process.

That is one reason we created a totally free valuation tool, which can give you a rough estimate of what your business would be worth.

Have you sold a business before? Are there any mistakes you see other sellers potentially making?

Leave a comment below and share your wisdom with other entrepreneurs looking to make their big exit to a successful payday.