The IRS has improved the procedure for electing S-Corporation status after the filing date for the S-Corporation Election Form (Form 2553) has passed.  If you can show reasonable cause for why the election is late it is now easier to obtain S-Corporation Status after the deadline.  Information on the change can be found here.

For more information on how an S-Corporation is organized and the differences between entity types see our page on choosing an entity.

“Progress isn’t made by early risers. It’s made by lazy men trying to find easier ways to do something.”  - Robert Heinlein

Commentary: This is a recurring theme in business - many lazy people have had great impact on progress because they were simply, well, lazy. They didn’t like the old way of doing things so they made it easier, faster, cheaper. This is nearly the definition of an entrepreneur.

Note there is a big difference between laziness and apathy. The latter will get you nowhere and the former will only get you somewhere if you have the will to implement your ideas.

On a similar note is the story of the lazy officer:

There are only four types of officer. First, there are the lazy, stupid ones. Leave them alone, they do no harm…Second, there are the hard- working, intelligent ones. They make excellent staff officers, ensuring that every detail is properly considered. Third, there are the hard- working, stupid ones. These people are a menace and must be fired at once. They create irrelevant work for everybody. Finally, there are the intelligent, lazy ones. They are suited for the highest office.

 - General Erich Von Manstein (1887-1973) on the German Officer Corps

“It’s not that I’m so smart, it’s just that I stay with problems longer.” - Albert Einstein

Commentary: There is something to be said about sustained thinking and obsessing over a problem. Einstein spent years thinking about some of his theories and problems. Others usually give up after their problems seem insurmountable.

I don’t think years are required to solve most problems, you just have to do the thinking and stick with it until the solution presents itself.

Here’s a bonus quote along the same lines:

“No problem can stand the assault of sustained thinking” - Voltaire

There’s a famous story of one of Thomas Edison’s clients who had purchased a very expensive machine that Edison had invented. The machine had broken and Edison was called to make the repair.

It’s said that Edison looked around the machine, hit it a few times with a hammer and this fixed the machine.

The client was then outraged to receive a $1,000 bill - he demanded Edison itemize the invoice. Edison itemized it like so:

Hammering: $1.00
Knowing Where to Hammer: $999.00
TOTAL: $1,000.00

This is why we pay for expertise and skill. We pay for people who “know where to hammer”.

“If you are patient in one moment of anger, you will escape a hundred days of sorrow.”  -Chinese proverb

Commentary:

This quote applies to your life as well as your business. Is it really worth it to be right or to get angry at your client even if they are being unreasonable? Sometimes, if you just “suck it up”, apologize and move on, you could prevent many disasters: chargebacks, compliants to the BBB and FTC, even lawsuits.

We believe it is always best to a) apologize and sympathize b) immediately resolve the issue and c) give the client their money back (if the mistake was our fault) and in some cases, even if it is the client’s fault. Your reputation is worth more than arguing over money, especially if the value is under say $100.

“There is no correlation at all between success and hours worked.”  - Seth Godin

Commentary: A common theme among business and personal development information is that a focus on hard work only will only make you a hard worker, not necessarily successful. There are billions of hard workers in the world - 3rd world farmers, 18/hour day wage slaves, people who hold 2 jobs at minimum wage, etc.

Successful people work hard on the right things, or better yet, have others work hard for them. The right things are those things that generate the highest return: education, improvement of a product, finding solutions, family, relationships, etc. Everyone knows what the right thing is for their particular situation. The key is focussing on that right thing and putting your efforts towards that. Finally, most successful people turn their passion into their business or career - therefore they don’t consider any time spent doing it “hard work” at all.

One of the primary benefits of incorporating or forming an LLC is the protection of the business owners personal assets from lawsuit. The main problem is that most entrepreneurs simply file the initial paperwork and then completely drop the ball on properly maintaining their corporate veil. This same rule applies whether you have a domestic, Delaware or Nevada Corporation or LLC.

In this article are listed ways to maintain the corporate sheild:

• Be sure that you always conduct business through and in the name of your entity rather than in your own name (unless you are a sole proprietor). Failure to follow the rules for the entity allows creditors to try to deny you liability protection because you did not really conduct business as an entity.
• Always have the entity adopt resolutions to authorize action, even if there is only a “ratification” after the fact.
• Use the proper form of entity signature by always signing documents in representative capacity as an agent of your entity: “XYZ LLC, by John Q. Smith, Managing Member.”
  Use proper signs, advertisements and business cards showing an entity rather than an individual (e.g., “John Smith, President, ABC, Inc.” rather than “John Smith, Owner/Proprietor”).
• Use proper fictitious name filings.
• Avoid commingling your business and personal funds in the same bank account.
• Pay business and personal bills from separate accounts.
• Maintain separate personal and business bank accounts.
• Prepare notes and other documentation of all loans between the business and its owners.
• Your entity must have a minimum capitalization reasonably adequate for the business to be conducted. Insurance counts.
• Don’t sign contracts or make commitments for the business until you have filed the correct papers to organize it, since you will be personally liable. The liability shield of the corporation or LLC does not exist until the entity exists through a filing in the state capital.

Of course, our clients would already know this as a ”compliance checklist” is included in the free handbooks included with every formation of a corporation or LLC that we handle. We also offer QuickRecords which automates corporate/LLC record keeping of minutes and resoulutions (even if you’ve forgot to do them in the past).

“Simple, clear purpose and principles give rise to complex and intelligent behavior. Complex rules and regulations give rise to simple and stupid behavior.”

- Dee Hock, CEO Emeritus VISA International

Commentary: Complex rules and regulations are most apparent in government and you’ve seen first hand how efficiently government is run at your local DMV. On the other side of the equation, look at Wal-Mart, a huge organization with a simple purpose and simple principles (low prices, large selection, efficient operations) that is the model of efficiency for an organization that employs 800,000 + people.

“Life is really simple as far as I’m concerned. There is no luck, you work hard and study things intently. If you do that for long and hard enough you’re successful.” - Jason Calacanis

Commentary: Jason Calacanis basically started from nowhere, to starting an obscure tech magazine in New York City, to starting Weblogs, Inc. (which he sold to AOL for $30 million) and now as the founder of Mahalo with $20 million in Venture Capital. He didn’t whine along the way about not having the right education, the right opportunities, the right location, he just did as he says above: work hard, study, repeat - you’re successful.

“Success is going from failure to failure without a loss of enthusiasm.”  - Winston Churchill

Commentary: A constant theme on this blog is that taking risks and failing are a natural part of running a small business and are, in fact, necessary, if you want to make any real progress. The same applies to life in general: try, fail, don’t beat yourself up, learn, try again - follow that formula and success is virtually guaranteed.