Bob Kalish’s Quick Tips on Small Business Formation and Management
Starting and owning a small business is challenging. The key is organization. The following lists are designed to help you “hit the high points” when forming and operating your small business.
Use the following guides as a starting point to organize your information before coming to the office so that we can make the most of our time together. They cover three areas: 1) Starting a Small Business; 2) Running a Small Business; and 3) Selling or Dividing a Small Business.
Starting a Small Business:
Make an outline of your plan and make an appointment for a consult. Bring your notes with you. Here is what I will ask in order to guide you.
- Ideas for your business name (to be checked for availability)
- Information about other owners, shareholders or partners that will be involved
- Type of entity (sole proprietor, LLP, LLC, etc.)
- How many employees will you hire and when, bookkeeping/accounting method and fiscal year
- Required filings for your particular business or profession at the federal, state and county level
- Location of the business. Review of lease or purchase documents.
- What contracts will you need to have drafted or reviewed? Lease, partnership agreement, supplier contracts and so on.
- Proper amount and type of insurance
Running a Small Business:
The following are some tips for keeping things running smoothly
- Proper hiring/employee evaluation/firing procedures to avoid liability
- Security of data and record disposal
- How to deal with disgruntled employees or customers
- Procedural manual so that employees and owners don’t keep “reinventing the wheel” daily
- Job descriptions so everyone knows what they are doing and why.
- Administrative calendar so owner(s) have important dates flagged (tax payments, permit renewal, insurance premiums and so on).
- Safe, secure place to keep organized business files
- Emergency procedures training for entire staff (natural emergency, human threat, how to contact law enforcement and when).
- Update your corporate/partnership paperwork on a yearly basis.
- Contact me RIGHT AWAY if you get sued! READ all of the paperwork, including the answer date.
- Have a plan as to what would happen in the business in the event of your death or disability.
Selling or Dividing a Small Business:
- Should it be a 50-50 split? How much time and money did each person put into the business? (In divorce- is the business separate or community property? Review the decree or settlement. Even better, deal with these issues before or during divorce with an attorney who understands both family law and business law!)
- Will the goods, assets, and customer lists be split or will one person “buy out” the other?
- How to get a true valuation of what the business is worth. Methods of evaluation.
- Is there any ongoing litigation between the parties that need to be dealt with? Current litigation with third parties?
- If the business is sold to a third party:
- How to make a smooth transition
- How to decide on the allocation of purchase price for tax purposes
- How to transfer ownership of assets and debts
- How to be compensated for your time if you will remain available
- How to protect yourself from ongoing liability.
Whether you are starting a new business, making changes in your current business structure or looking for ongoing legal guidance, we can help you!