One of the most difficult steps in the start-up process is deciding which business structure fits your business idea best.  There aren’t that many options, but the distinctions between the types of entities can be overwhelming.  Some states may have some restrictions regarding the types of businesses that can operate in each structure but this may not provide much guidance.  A lawyer can help you make the decision too, but with a little research, you may be able to choose yourself.  Here are some pros and cons of the major business structures you can choose from.

Sole Proprietorship

A sole proprietorship is the default business structure if you don’t file anything with the Secretary of State.  This isn’t always the best choice for everyone, as it can result in a higher frequency of audits and it doesn’t provide protection for your personal assets and you can be personally liable for business debts.  However, it is simpler to get started and the profits or losses can be reported on your personal tax return, without filing separately.

Limited Partnership

A limited partnership offers protection for the personal assets of the limited partners, however the partners who are actively involved in management do not have any protection.  This is a nice option for many companies that focus on investing in real estate as it allows money to be raised for the business without involving outside people in the management of the business.  This type of structure requires a filing with the Secretary of State.

Limited Liability Company (LLC)

The Limited Liability Company, commonly known as an LLC, is one of the most popular entity structures among businesses right now.  It’s a relatively new structure that combines the benefits of a corporation but eliminates some of the negative aspects.  Specifically, the LLC protects everyone in the company from personal liability for business debts and allows losses to be “passed-through” to the people involved in the company.  This “pass-through” option is a huge benefit to the LLC because it means that the people involved in the company can claim the losses of the company on their personal tax returns.  In an LLC, you can take on passive investors to raise financing and corporation maintenance is fairly easy.

C-Corporation

A C-Corporation is the most general type of corporation you can have.  The owners of a C-Corporation are mostly protected from personal liability for business debts, although if the corporation doesn’t follow the formalities of a corporation, there can be problems with personal liability.  As a result, the formalities such as filing annual reports, maintaining separate bank accounts, keeping track of meeting minutes and holding shareholders meetings are very important.  A C-Corporation can also have unlimited number of shareholders.  Another benefit of C-Corporations is that if you wish to take your company public (selling shares over a public stock exchange like NASDAQ or NYSE), you will need to be associated as a C-Corporation. So, starting out that way saves trouble down the road.

S-Corporation.

An S-Corporation is a C-Corporation that has specially elected to be treated as an S-Corporation.  It has the same personal liability protections and potential issues although it has significantly more stringent formalities.  An S-Corporation can only have a certain amount of shareholders and the shareholders must meet specific requirements.  An S-Corporation also allows for corporate profit sharing, but the allocations must be done in accordance with the shares each owner owns.  A benefit is that owners can use any losses of the corporation on their personal income tax returns, reducing personal tax liability in many instances.

If you choose any of the options above except for a sole proprietorship, your next step is to file your business with the Secretary of State.  Just like with choosing the right entity, a lawyer can file your business formalities for you.  Your lawyer will gather all the appropriate paperwork and get it submitted to the state for filing.  This can be expensive though, requiring at least two or three billable hours from the attorney.  If you are starting a business with a variety of complexities, this might be your best choice, despite the cost.  If your business is more straightforward (and most are), you can complete and file the paperwork yourself or go through an online filing service.  An online filing service is significantly cheaper than an attorney but is guaranteed to find the correct paperwork and fill it out accurately.  If you’ve never created a business before, it is probably wise to get an attorney or go through an online filing service.

As you can see, there are numerous advantages and disadvantages to each type of business structure.  Depending on the type of business you are starting, some of these disadvantages may not affect you as much as others.  The only thing is to make sure that the business structure works best for you and you are familiar with the requirements.

About the Author

Deborah Sweeney is CEO of MyCorporation Business Services, Inc (MyCorporation.com).

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A wise man once said “You can’t buy insurance when you need it.” This is so true. If your house catches fire and you are not insured, then that’s the time you need insurance the most. Unfortunately nobody will sell you an insurance at that time when you need it the most. Lot of small business owners run their business for several years without ever thinking about insurance. They are so busy running their business, that insurance is quite often an area of neglect.

Let’s discuss some of the insurances that you may require for your business. All of them may not be applicable for your business, but some of them might be applicable for your business. Also remember, that these are only some of the common insurances available. An insurance agent once told me he could get me insured for anything under the sun. So, analyze the most important areas in your business that could potentially destroy you and get yourself insured against these risks.

Insurance for your inventory – If you are a retail business and you have inventory, your inventory can be insured. This usually does not cover pilferage and petty thefts from customers.

Fire and Burglary – This insurance covers burglary and fire. In case, your equipment, furniture or other items in your office catch fire or there is a burglary, this insurance covers the cost of damage.

Fidelity Insurance – This insurance covers employee theft. If any of your employees steals from your business, this insurance could come in handy.

Professional Indemnity Insurance – This insurance covers you for professional negligence. If you are providing a service in return for compensation, then you are treated as a professional. As a professional you are supposed to provide your services with utmost care and conviction to the best of your ability. If you get sued for professional negligence, then this insurance can save you from financial distress. This could come in handy especially if you are a doctor, dentist or if you are a service based business.

Besides the insurances listed above, there is insurance for almost everything under the sun like personal injury at the workplace, loss of income insurance, etc. Check with your local insurance consultant or an insurance agent to identify the insurances required for your business.

About the Author

Vinil Ramdev is an entrepreneur, speaker and author of several ebooks. He is founder of StartUpGrowthExpert.com – An Online Magazine For Entrepreneurs who want to start and grow extraordinary businesses.

A best selling author once said “There are 3 people who need to be a part of your team – A good lawyer, a good accountant and a good doctor.”

There is so much truth in that. Today, we are going to focus on how to choose a lawyer. There is a perception among several people that all lawyers are the same. I completely disagree with that. Not all lawyers are the same. Some lawyers are good at what they do, are knowledgeable about the law and understand how to deal with complex legal problems. There are others who may not be as good with their work as their counterparts.

Why do you need a lawyer?

If you have law suits against your firm, then obviously you need a lawyer to fight your case in court. Besides that, you need a lawyer to draft your legal contracts with employees, suppliers and to make sure you are legally compliant.

Types of lawyers

When hiring a lawyer, it is important to find a specialist. You don’t want someone who specializes in everything under one roof. There are several types of lawyers, some of them are:

• Intellectual property lawyers – These are lawyers who help you protect your intellectual property rights like patents, copyrights and trade dress.
• Real estate lawyers – These are lawyers who specialize in property law. They will help you prepare your lease agreements, property purchase agreements, due diligence when it comes to buying or selling property and other property related disputes.
• Corporate lawyers – Corporate lawyers focus on matters related to corporate law.
• Litigation lawyers – Litigation lawyers focus on matters related to litigation.
• General lawyers – These are lawyers that focus on almost everything. They are usually lawyers who don’t specialize in one particular area of law but they focus on pretty much everything under one roof. Be careful if you choose to use this type of lawyer.

What to look for in a lawyer?

Someone who specializes in an area you seek expertise.

Someone who has integrity.

Someone who is knowledgeable about his subject.

Someone who is pro-active and can get the job done. This is very important in a lawyer. Sometimes, lawyers who have a lot of work on their hands can procrastinate and delay your work. So, make sure you find someone who is proactive and can get the job done.

About the Author

Vinil Ramdev is an entrepreneur, speaker and author of several ebooks. He is founder of StartUpGrowthExpert.com – An Online Magazine For Entrepreneurs who want to start and grow extraordinary businesses.

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The idea of going public is an intriguing one for many small businesses.  They see access to capital, lots of publicity and generally a better business life than the previous one they lived where they were always begging for money, no one outside their customer base ever heard of them and their business life although not always bad, certainly had ever-present challenges.  This article will lay out what it means to “go public,” what are the business challenges associated with making such a decision and yes, what the advantages truly are to be a small public business.

Most small business people mean one of two things when they say they want to go public.  They either mean that they want their shareholders to be able to publicly trade the company’s securities or they mean that they want to be able to approach the public to raise capital to support their businesses.  I point this out because although the first concept includes the second, i.e, if your company is publicly traded you can raise capital publicly, the second concept does not always include the first, i.e., a company can raise capital publicly but not necessarily have its securities trade publicly.  The small business owner needs to understand this very well before launching into an effort to publicly raise capital that will bring many more challenges with it.

To start with, let’s return to the years after the Great Depression.  Prior to that time, selling stock was a wide open game and many people lost money to schemes that were designed to aid the seller who did not make any effort to protect the investor.  The Securities Act of 1933 instituted a number of basic protections into the securities regulatory scheme that were designed to protect investors by making sure that information was available to them before they bought securities and to stop sellers of securities from using fraudulent activities to sell.

As noble as these desires were, it was not practical to think that the federal government could get involved with the sale of every security that took place in the country.  Consider, for instance, that a person forming a corporation to own and operate a convenience store would ultimately be buying securities from that corporation.  The expense for that small corporation to have registered securities to sell under those circumstances would be prohibitively high and would not really serve to protect anyone.

The Securities Act of 1933 later incorporated various exemptions to registration to handle situations where the risk to the public was deemed not too great.  The prime area for small businesses is Regulation D, which governs how a business sells securities without using public means of communications.  There are three safe harbor rules, Rule 504, 505, and 506 that prescribe how and what kind of information still needs to be delivered to investors, how sales cannot be conducted using fraudulent measures and varies the requirements depending on amounts of money being raised and to whom offers are being communicated.  These are referred to as Private Placements and the disclosure document used is called a Private Placement Memorandum, although the PPM does not follow a strict structure, just specific issues that must be addressed.

Understanding PPMs in general helps to understand the going public process.  Information is the key element to what a company has to deliver to potential investors before asking them to invest.  While the information is very much the same for a public offering as a Private Placement, the difference is how that information is derived and who checks it before it is delivered to potential investors.

To understand the public offering for a small business, it helps to understand the IPO process that one reads about so often in business magazines.  Essentially an IPO is conducted by having investment bankers study a company and make a determination about how much cash is needed, how many securities will be needed to be sold to attract that much capital and preparing for the changes the company will undergo to be a public company.

A road show is held in which the company and its investment bankers travel around the country visiting stock brokers to sell the brokers on the company and on the offering.  The investment bankers will start with a range of numbers of securities it thinks the company will offer and a price range for purchasing those securities, say between 10 and 15,000,000 shares of common stock at a price between $10.00 and $14.00 per share.

At the presentations to the stock brokers, questions are asked and finally the brokers make commitments at one or more prices and the number of shares like “We will purchase 4,000,000 shares if the offering price is $12.00 or 3,000,000 at an offering price of $14.00.”  The company’s investment bankers keep a running tally to see when they have sufficient commitments to meet the company’s capital needs plus the investment banker’s fees.  When they reach a point where they have enough commitments to do that, they stop the road show and report to the various committed stock brokers that they will be allotted a certain number of shares at whatever price the company accepted.  These shares are then sold by the stock brokerage to their customers in transactions that will be effective at the time the company is officially trading on an exchange.  At that time the new shareholders can sell in the market or keep the shares waiting for price appreciation.

The IPO process is marked with a large number of high expenses to the new public company and a great deal of exposure of formerly private operating information.  These two aspects of the IPO process may be the greatest reason small businesses seek other ways to raise money publicly.  In addition to the information that a company must present to new investors to go public, the new public company must now make quarterly and annual reports to the SEC to be held in public files for investors to research at any time.   All of this process comes with immediate and long-term continuing expenses that can make a public offering quite challenging for a small company.

There are three ways small businesses can raise capital that are much less expensive than the traditional IPO method.  The first is the private placement method where a company approaches potential investors with whom the company has a “prior business relationship” and explains the company’s capital needs and what the company is willing to offer to the investor to get the investor to spend his money.  A private placement can get very complicated if one investor begins to negotiate a deal that is different than the one the company intended to offer or has already offered to other potential investors.  Under such circumstances, the company may find itself re-negotiating with the early investors and having to take a deal it had originally not intended to take just to get the financing.

The public methods of raising capital for a small business can relieve the company from having to negotiate with individual investors.  The company may find that investors subsequently do not invest because they cannot negotiate, but the company remains in control of the process even though it has not received money.  The two methods of publicly raising money that are available to small businesses are collectively referred to as Direct Public Offerings and individually they are known as SCOR (Small Corporate Offering Registration) or Regulation A offerings.

The primary difference between the kinds of DPOs is the maximum dollar amount of the offerings and the regulatory agencies that will review the offering before it can be launched. A SCOR offering is offered under Regulation D of the Securities Act of 1933 and the state securities laws of the states where the potential investors live.  Generally, a SCOR offering is limited to $1,000,000 but some states further reduce the maximum amount of these offerings.  A Regulation A offering can go as high as $5,000,000, again possibly reduced by state securities laws in the states where the offering will be sold to potential investors.

Here is how a DPO is conducted.  The offering company prepares a disclosure document that spells out what the offering company is, what its business is, who runs it, who has invested in it, what the capitalization structure of the company is, what the current debt of the company is, what are the reasons someone might lose their investment in this company, what the business plan of the company is, what the goals of the company are and how the company intends to use the capital it raises.  All of this information is placed in a disclosure document that is reviewed by the state agencies responsible for securities in each of the states where the offering company intends to sell securities.

The review process between multiple states can get a little difficult to manage if one state wants a change that conflicts with a change another state wants, but it usually can be worked out.  At one point a few years back, a multiple state review process was utilized but that has been dropped.  Once final registration is set by the states involved, the offering company is free to utilize the public airwaves, public newspapers, and any other public manner to let people know that the company is raising money.  There have been a number of innovative methods used to advertise DPOs including pasta boxes and beer six-packs.

A regulation A offering has an added level of regulatory inspection to it.  The SEC must review the offering document.  This is a much reduced level of review from the process an IPO offering goes through.  Once the SEC has reviewed the offering, it is submitted to state agencies for their review and registration before the company can begin selling to the public.  Many entrepreneurs who look at DPOs stop at this point and never consider the next aspect of public securities that investors will want to know about probably soon after they purchase public trading.

For the very small company, public trading can be very difficult.  This is because every public trading arena requires the company whose stock is being listed for trading to meet requirements so that the trading arena can be sure that there will be trading activity in the stock.  These requirements will be a certain capitalization, number of public shares, and number of public shareholders that will increase the possibility that there will be a regular trading activity in the stock.

The Pacific Stock Exchange has maintained a separate trading environment for DPO stocks where companies that meet the SPE’s requirements can freely trade in the aftermarket.  Other places where small company stock can be traded include the Over the Counter and Bulletin Board markets.  Each of these marketplaces has its own requirements that the trading company must meet.  A company contemplating a DPO should consider these requirements prior to conducting the DPO to be sure that the resulting stock can be reasonably listed and traded, so the company’s investors have a place where they can sell their securities if they want to.

Finally, a public company has numerous new reporting requirements once it has sold securities to the public.  This is so the investor can easily stay up to date on developments with the company.  These requirements are a significant regular expense that a company needs to plan for in its business plan post offering.

Small businesses can reap great rewards by going public.  They must fully understand what is involved to do so and what is involved for the company and the potential investors before contemplating an offering to the public.  Well considered, a public offering of a company’s securities may be the beginning of a new foundation for business success.

About the Author

James Wilson is a business attorney with the Wilson Law Group, PLC in USA. He works with small businesses. He can be reached at JWILSON@WILSONLAWGROUP.NET or +1-804.864.5268.

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When you start a business, choosing a business entity is an important decision you need to make. In this article, we will go through some of the most common business entities in USA.

What is a business entity?

A business entity is a separate identity for your business. You may want to separate your business assets from your personal assets. Therefore, you have separate financial statements for your business and separate financial statements for your personal accounts.

Some of the most common business entities in the USA are:

Sole proprietorship

Sole proprietorship is not a business entity by itself. There is no separation between the owner and the business. This is probably the easiest and the cheapest to start.

Partnership

This is similar to a sole proprietorship but there are partners instead. The partnership is governed by a partnership agreement.

C-Corporation

A C-Corporation is a business entity where the owners are the shareholders and there is separation between the shareholders and the management.

Formal meetings and a lot of paperwork need to be done on a regular basis. It is recommended that you use a lawyer who is well-versed in company law.

The big advantage with a Corporation is that there is limited liability.

If the corporation is sued for some reason, the suers cannot come after the personal assets of the owners (shareholders). The owners (shareholders) liability is only limited to the investment that they have made in the corporation. A C-Corporation can have any number of shareholders.

The biggest disadvantage with a C-corporation is double taxation. The corporation is taxed first at the corporate level and when dividends are paid, the shareholders are taxed again on the dividends.

S-Corporation

The S-Corporation is similar to a C-Corporation but they have a tax advantage where the corporate income and deductions pass on to the shareholders.

S-Corporations however, cannot have more than 100 shareholders and they cannot be foreign bodies. They also have several other requirements to be fulfilled if they have to be given the S-corporation status.

Limited Liability Company (LLC)

Limited Liability Company is a hybrid between a corporation and a partnership. It has limited liability of a corporation and the tax advantages of a partnership.

These are just some of the business entities available in the USA for for-profit organizations.

This article should not be construed as legal advice. It is advisable that you use a company lawyer who is well-versed in company law to help you with legal aspects of incorporating your business.

About the Author

Vinil Ramdev is an entrepreneur, speaker and author of several ebooks. He is founder of StartUpGrowthExpert.com – An Online Magazine For Entrepreneurs who want to start and grow extraordinary businesses.

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Most first time entrepreneurs have no idea that they require a lawyer. You may not require a lawyer upfront. But you’ve got to remember that a lawyer should be one of the key members in your team. A good lawyer is worth his weight in gold.

The reason I say that, is the legal system in most countries are becoming increasing complex. Besides litigation, there are several other factors that are important.

So, let’s explore some of the reasons why you need a lawyer.

1. To draft contracts that protect you and your company from litigation

Some of the contracts you may require are employee contracts, vendor contracts, supplier contracts, exclusivity contracts, joint venture contracts, lease agreements and collaboration contracts.

Nowadays, it’s so easy to get a generic format for all these contracts and just edit it and use it. However, I would not recommend that, if you can afford a lawyer I suggest you use him to draft these contracts. I can remember one very clear occasion where one little clause in my lease contract saved my business from potential complexities.

2. In case of litigation

When you are in business there is a possibility of litigation. Therefore, it is very important that you network and build relationships with a good lawyer before you need him. The trick to hire great people is keeping them in mind and develop a relationship with them before you even need them.

You don’t want to be running around trying to find a great lawyer the night before you need to appear in court to sort out your commercial litigation.

3. To help you with compliances

As a business, there are several compliances that are required by law. A good lawyer can prepare a checklist of these compliances and help you with the compliances. It is very important that you take the law and it’s compliances very seriously because it can destroy your business. Many entrepreneurs have learned this the hard way.

I am sure there are many more reasons why you need a lawyer. Please list out your reasons why you need a lawyer in the comments section below.

About the Author

Vinil Ramdev is an entrepreneur, speaker and author of several ebooks. He is founder of StartUpGrowthExpert.com – An Online Magazine For Entrepreneurs who want to start and grow extraordinary businesses.

Join Our Home study Entrepreneurship course StartUp Secrets Today. And, learn the skills required to be an extraordinary entrepreneur.

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Ruth A. Pavilonis, owner of Betina’s & Bailey’s Adventures Talks About Why She Entered A Business Plan Competition Last Year.

Here’s her story...

Last year, on a whim, I entered a business plan competition.

I say “whim” because as a scrappy, 1-person start-up doing it all—sales, marketing, order fulfillment,  web updates, receivables, payables—that was the last thing I needed to add to my growing “to do” list.

Sure, I had a business plan—in various forms. Notes scribbled on random pieces of paper and table napkins, half-started documents in Word and even a few Excel spreadsheets started. You know the drill.

It was time to get organized and legitimize my business, define my course of action. Participating in this competition would certainly help me (force me) do just that—and how.

It was in this spirit, I entered the competition. The sheer act of completing their 1-page overview, as the first step in the selection process, proved invaluable.

Talk about getting to the heart of the matter! There was no room for B.S. I had to succinctly capture the essence of  my product/service, know the competition, have a handle on the financials and tons of other stuff—all crammed on one piece of paper!

Apparently, I impressed them. Out of 63 applicants from 3 counties, I was 1 of 12 finalists.

Now came the harder part—developing a full blown (many page!) business plan and give a 3 minute presentation to a panel of judges. What did I sign up for? Clearly I was mad, or desperate for funding—which is more the truth of the matter.

It was all an amazing experience—even presenting in front of the judges and audience. Sadly, I did not win the cash and prizes. But again, the “exercise” was invaluable.

So, would I do it again? You bet. And here’s why:

#1 The Act of Developing/Refining a Legitimate Business Plan

Need I say more?

#2 Free Advertising

Entering a competition gives you lots of free advertising. The organizers write press releases, have various media contacts and outlets (TV, newspaper, radio). So why not let them “use” you to promote their cause?

#3 All the Fabulous Prizes & Money

Again, need I say more?

#4 The Contacts

You never know who you may meet—regardless if you win or lose. A high-power Silicon Valley inventor was one of my judges and loved my product. As a result, he has been an active mentor and member of my Advisory Board ever since.

#5 The Potential for Funding—even if you don’t win

This builds off of #4, you never know who you may meet. Lots of VC people, other investors and other “connected” people attended these competitions—be they judges or observers. For example, at the competition in which I participated, 2 of the finalists (who weren’t the official winner) received over $10 million (yes, million) in funding.

So, for the possibilities it is worth the pain. For the fact that a solid business plan is a necessity for a successful business and to secure funding, it’s worth it.

Lastly, here are a couple of tips my high-powered advisor passed along:

#1 Think World Domination

Whether you really want to conquer the world with your product/service, aim for total market domination. This shows the investors/judges that you can think big and are willing to take risks. After all, who wants to invest in a safe and small company with minimal growth potential? Investors want the possibility of the next iPhone.

#2 Have high-powered members on your Advisory Board, not Auntie May and Uncle Georgie, unless they are CEOs of a solid company.

No offense to your family. They are the necessary cheerleaders and possible investors that have helped you get this far. Now you need to identify people who can advise you on getting to the next steps, since they’ve lived in the “after life” of those next steps and can help you get there.

There you go. Now it’s up to you. You’ve stepped out of your comfort zone at this point by making an idea/dream come alive. Go for the next step. Take the leap. Have courage. And good luck!

About the Author

Ruth A. Pavilonis is the author, innovator and owner of Betina’s & Bailey’s Adventures. These international, award-winning facilitated^TM children’s stories help children become skilled readers, build their imagination and develop critical life skills. For more information, please visit: www.BetinaandBailey.com.

Prepare Yourself For “The StartUp Challenge” With A Professional Business Plan. Click Here.

Other Articles That May Be Of Interest To You.

• Writing Your First Business Plan
• How To Write A Business Plan
• Business Plan Basics
• Do I Need A Business Plan?

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Bea Joyner talks about her experience of writing her first business plan.

You Need More Than A Good Idea!

Many business owners feel that a business plan isn’t necessary because they’re convinced they have the best idea in the world and everyone will beat a path to their door to buy it. I know, I was one of those owners. My company, Busy As A Bea Productions provides a series of seminars called “Parenting Parties” that are designed to help parents and teens navigate the difficult period of life known as adolescence.

What many business owners don’t realize is how many good ideas there are in the world and they have to find a way to get their message heard. For years I had heard how owners were successful without a business plan, I thought I could do that as well. When the world wasn’t beating a path to my door and the bills weren’t being paid by my profits, I decided I needed to change what I was doing.

I understood the value of having a business plan, it would be my guide in generating business and I had tried to write one with little success. I took classes at the Wharton School of Business (University of PA) and realized how little I knew about business. I have three areas of business, but Wharton made me realize I had to narrow my focus if I wanted to be successful and be aware of my bottom line. I still didn’t develop a business plan but I knew I needed one.

Then I discovered the Women’s Business Development Center business plan writing course and found what I needed, a step by step approach with an instructor to help me interpret this whole new world! I completed the program and was the proud owner of my own business plan and the world began beating a path to my door.

The Business Plan Competition

A friend suggested I enter the “Enterprising Woman Business Plan Competition” sponsored by The Business Center for Entrepreneurship & Social Enterprise so I entered the contest.  It required me to re-examine and “tweak” my plan before I met the requirements of the contest, but it was worth it. There were prizes involved but more important to me than prizes were the objective opinions of my business plan. I needed to know if it was a good one after all the time and effort it took. I won 2nd place in the “Service Division” for my “Parenting Parties.”

Can you be successful without a business plan, there are those who are, but for me writing the plan gave me an education and guide in how to be successful in my business.

About the author

Bea Joyner, CEO of Busy As A Bea Productions provides seminars that help parents and teens navigate adolescence and improve their relationship by providing practical solutions to common problems. The optimum question to ask a parent is, “Would you want your child to make decisions about your health care or nursing home?” Contact her at beajoyner@aol.com, http://beajoyner.com/

”Learn How to Write a Professional Business Plan

in JUST 3 days”

A step-by-step no non-sense guide to writing a business plan in 3 days or less!

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I meet so many people who are looking to raise capital for their business or they just want to write a business plan so that they can get their thoughts in place, so I decided to write a brief article about how to write a business plan.

If you are not convinced that you need a business plan then you need to read this article “6 Reasons Why You Need A Business Plan.”

If you are convinced you need one, let’s go out there and write a business plan real quick.

Step 1: Prepare a table of contents

Your table of contents is a template that will give your writing some direction.

You can research the internet for your table of contents or you can use the table of contents listed below. This will vary depending on your business. And, also feel free to customize it according to your needs.

1. Executive Summary
2. Products and Services
3. Company Description
4. Mission
5. Objectives
6. Business Model
7. Operations
8. Marketing
9. SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
10. Management Team
11. Future Products
12. Industry Analysis
13. Competitors
14. Exit Strategy
15. Financials
16. Capital Required
17. Uses of funds
18. Projected Income Statement
19. Projected Cash Flow Statement
20. Projected Balance Sheet
21. Exit Strategy
22. Entity Structure
23. Contact information

Step 2: Add information to your table of contents

Once you have your table of contents, all you need to do is add information into your table of contents.

This is only a basic process of writing a business plan. For a more detailed process of writing a business plan, read my book “How To Write A Business Plan For Astonishing Results. In Just 3 Days!”

About the author

Vinil Ramdev is an entrepreneur, business coach and author of the ebook “How To Write A Business Plan For Astonishing Results. In Just 3 Days!”

”Learn How to Write a Professional Business Plan

in JUST 3 days”

A step-by-step no non-sense guide to writing a business plan in 3 days or less!

Click here








Image:Yodel Anecdotal

I was contacted by a friend last month.  She and her business partner were considering a drastic change in their relationship and they wanted my help.  I asked her if they already had an agreement that defined their relationship and responsibilities.  She sheepishly paused before admitting that two years earlier another lawyer had drafted some documents.

The documents were full of legal jargon and boilerplate paragraphs which they didn’t understand and they weren’t even sure those issues applied to them.  One document alone was over 30 pages of fine print. They had been afraid to sign on the dotted line and now that they were at a crossroads where the agreement was needed, they had nothing as a guideline.

I spent a few hours with the business partners, sorting out the agreements they’d already made between them, writing those down, and figuring out how the new changes would be handled.  We wrote up the new agreements and they breathed a sigh of relief.  Their friendship was preserved and so was their business.  They had a plan that worked for both of them.

Policies, procedures, operating agreements, shareholder agreements, and contracts are all legal documents that are designed to make your business work! They’re there to serve you and the business.

1.  Use plain language that everyone can understand.

My client’s initial embarrassment was misplaced.  In the attempt to cover everything, boilerplate documents don’t fit anyone. Legal jargon doesn’t clarify issues for nonlawyers, it obscures meaning and sometimes prevents people from keeping the agreements because they don’t understand what they are supposed to do.  My friend shared the unsigned agrements. With over 20 years as a lawyer, I still had a hard time deciphering what their documents were trying to accomplish in some paragraphs.  How could a business owner with no legal training possibly use this agreement to run her business?

2.  All business documents should be working documents that serve the business.

Contracts, policies and procedures are about creating clear understandings so everyone can work together better. Business agreements should be flexible and organic, to the extent possible.  If there are only two partners and they’re working together every day, changes to the agreements may be constant and responsive to the changes that will happen in any new business. If a business has multiple owners in different locations, the agreements help to ensure that one partner does not go off in a different direction and that changes can be on an agreed-upon schedule, at quarterly or annual meetings, for example.

3.  They should cover what is necessary, especially how you will resolve conflicts.

It is important to create a foundation of good, understandable agreements in the beginning of a business relationship. How will profits be divided? Who will be responsible for making sure that taxes are filed?  Much of the skeleton of a business agreement will be just writing down what you have already talked about.  Legal documents are written records of what is agreed and sometimes what is un-said but assumed. They help us see what was not understood and to clarify.

The trouble with a lot of boilerplate is that it attempts to predict every possible issue that could come up but almost always fails. Legal documents should cover the most likely issues then create a plan for how to handle the unlikely ones.  The likely events will vary with the type of business and the circumstances.  A personnel policy that prohibits hiring family members is irrelevant in a mom and pop business but may be important to think about in a less personal environment where family relationships could complicate matters.

A business is like a marriage and can be very intimate. Deep hopes and fears can be triggered. Conflicts are inevitable and you need a foundation for resolving them, something short of dissolving the company or heading to court in the business equivalent of divorce.

4.  Focus on maintaining a good working relationship with your business associates.

Too much focus on legal documents, policies and procedures can be a sign that something isn’t working with the relationships in your business. Sometimes businesses pass more rules about behavior to try to control behavior rather than exploring the underlying motivations.  Don’t lean on your legal documents and create new rules when a face to face conversation is what is needed.

5.  Find a lawyer who can be your advisor

Not all lawyers are like those you see on television. Only around 2% of cases are actually settled in courtrooms.  There is a whole movement toward a more holistic, system-based approach that is preventive and oriented toward meeting your needs. Such lawyers can help you avoid pitfalls and legal traps while bringing clarity and workability to your relationships. That being said, make sure you interview your lawyer to make sure they have the holistic, preventive and coaching approach to law practice.  If not, find one who does.

About the author

Lawyer and coach J. Kim Wright, J.D. is the author of the best-selling Lawyers as Peacemakers, Practicing Holistic, Problem-Solving Law (American Bar Association, 2010). She is the managing editor and publisher of www.CuttingEdgeLaw.com.  Her other activities can be explored at www.JKimWright.com.

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