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      Start-Up Business, Business Tips

      Sucessful businesses are born from three key ingredients-- specific knowledge, expertise and passion.

      Even with an abundance of these ingredients, owning a business and ensuring that it is successful is a daily challenge. Sometimes success creates problems and how you meet these challenges can turn a failure into a success.  
       
      We do not often identify “problems” with successful businesses, but they too, experience setbacks that could be avoided or mitigated, particularly as companies grow and expand, and experience employee turnover and changes in ownership and management.
      When starting or buying a business, a significant emphasis is placed on developing a marketing and business plan, deciding on the type of entity and how it will be taxed, and arranging for initial financing. After getting past these critical decision points, business owners are anxious to begin operations and get their product or service to the market.
       
      New business owners spend a tremendous amount of time and attention making certain they have a product or service to sell from day one. It is also important to have a number of other fundamental elements in place early on, which will allow them to focus on operating their business while minimizing the risk that a “challenging event “could jeopardize the very existence of their business.  
      These include:
      • Obtaining a local business license,

      • Knowing federal, state and local wage laws, and 

      • Registering the business for sales and other taxes, especially when selling products and services at the retail level.

      Not having these in place can create problems for your business sooner rather than later, especially as your business grows and becomes more visible in the community.
      Other considerations and best practices will have a critical impact on your business somewhere “down the line.” Having all or many of these in place will have immeasurable benefits. These include:
      • Having a good partnership, operating or shareholders agreement in place. These agreements should define roles and duties, compensation, capital contributions and distributions, and what will happen when a party terminates, wants to leave the business or sell his or her shares or units.

      • Establishing a practice of “getting it in writing” and expect this of those you do business with. This includes Contracts with outside parties, independent contractors and employees. Written terms help clarify issues and alleviate misunderstandings and ambiguous conditions.

      • Crafting a Buy/ Sell agreement that define pricing options, valuation methods and triggering events. It is best to have this defined rather than having no terms or terms that are subject to interpretation, which often have costly consequences.

      • Utilizing Employee Handbooks to define what is expected of Employees and the Company; providing guidance and possible outcomes when established policies are not followed.

      • Establishing written Policies and Procedures so everyone knows what is expected of them.

      • Using Confidentiality, Non-Circumvention and Non-Compete agreements which are designed to protect trade secrets, valuable and sensitive customer information, and the company’s best practices.

      • Obtaining the appropriate types of business insurance and adequate amount of coverage, based on the nature of your business and its related risks. This should include business interruption coverage if you experience a significant loss, which helps you continue business until you are operational, and cyber security insurance. Cyber insurance is becoming more important as we become more mobile, rely on cell phones and virtual offices, and adapt to the Internet of Things.

      • Establishing adequate internal controls including segregation of duties whenever possible.  

      • Developing sound IT network practices, including the use of firewalls and encryption, strong passwords, control over who has access to sensitive files, establish regular file backup procedures, and provide employee training to avoid on line threats, breaches and shut downs.

      In our practice we’ve learned the benefit of these guides and a prudent business leader should be prepared for events that happen outside of their control.  It often seems that challenges come to us at the most inopportune time, and we appreciate the value of having best practices in place only after we experience a loss.  
      It makes sense to have a team of professionals, who can help identify and implement best practices for your business and offer assistance before a need arises to ensure success for many years.
       
      Contact us if you would like to discuss how we can assist you in protecting your business… Your most valuable asset.

      Tagged: Start-Up Business, Business Tips

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