When you start a business, you must decide whether it will be a sole proprietorship, partnership, corporation, or limited liability company (LLC).
How do you decide which of these structures is right for your business?
There are many factors to consider in the decision including the type of business you run, the number of owners it has, and its financial situation. No one business structure is suitable for all businesses. Business owners should select the one that best meets their requirements. Some important factors to consider include:
- The potential risks and liabilities of your business
- The formalities and expenses involved in establishing and maintaining the various business structures
- Your income tax situation
- Your investment needs
In large part, the best ownership structure for your business depends on the type of services or products it will provide. If your business will engage in risky activities such as trading stocks or repairing roofs, you’ll most likely want to form a business entity that provides personal liability protection (“limited liability”), which shields your personal assets from business debts and claims. A corporation or a limited liability company (LLC) is probably the best choice for you.
Please contact us to learn more about the advantages and disadvantages of each type of business structure.
Do you have a strategic plan for growing your business?
You may have an idea of the direction you want to take your business, but have not thought about formalizing it on paper. Hence, the need for a strategic plan, regardless of your business size or its products or services. Developing strategy is one of the most important and demanding responsibilities a business owner faces.
A strategic plan should declare the objectives of your business, the goals you hope to achieve over a five-year period, and how you plan to execute them. Details are essential. Try a “what and how” exercise:
What do I want does the business want to accomplish in five years and how will it I achieve those goals?
A strategic plan also provides an opportunity for your business to evaluate its current operations and explore opportunities. By knowing the company’s current operational status, the company has a benchmark to move forward from. The process of strategic planning can then assist you in seeing the bigger picture. Please contact us to learn more about our strategic planning services and take control of where your business is heading.
A focused business plan is crucial to the future success of any business, including entrepreneurial- driven, owner-managed businesses. A well-developed business plan will illustrate tell the story on who you are, the product or service you sell and how you plan to be profitable. A properly formulated plan will help you gain confidence with lenders, investors and shareholders.
Writing an investor/lender-grade business plan can be challenging and time consuming, even for those who have done it before. If you are As a typical entrepreneur, you’re already too busy focusing on other priorities, such as building your customer base, perfecting your product, or recruiting key management.
We can help can help you develop a dynamic, comprehensive, cost effective and professionally written customized business plan. Our business plans are tailored to suit your specific business vision and in meeting lender or investor expectations of content, organization and clarity.
Cash Flow Management
What is cash flow?
It’s basically the movement of funds in and out of your business. This should be tracked on a weekly, monthly or quarterly basis.
Cash flow is one of the most critical factors of success for a small or mid-sized business. Without cash, the business will cease to exist. Many a profitable business on paper have ended up filing for bankruptcy because the amount of cash coming in does not equal or surpass the amount of cash going out. Firms that don’t exercise good cash management are at risk of not making the necessary decisions or purchases to keep their business operating effectively and as a result, may have to rely on borrowed money to stay afloat.
In order to achieve a positive cash flow you have to work at it. You need to analyze and manage it to effectively control the inflow and outflow of cash. We recommend undertaking a cash flow analysis to ensure you have enough cash each month to cover your business commitments in the coming months. There are numerous online cash flow spreadsheets and websites offering management services yet cash flow management is much more than plugging numbers into a spreadsheet as a numerical exercise.
A good cash flow management involves:
- Customer payment histories
- Thorough identification of pending expenditures
- Awareness that past receivables are not accurate indicators of future receivables
- Mindfulness that payables may not follow the historical pattern as before
- The inclusion of expenses such as capitol improvements, loan interest and principal payments, taking into consideration fluctuating seasonal sales
We can help you achieve a cash flow management process that is customized for your specific business.