real diaper replanning 10.14.10
DESCRIPTION
RDIA 2010 Annual Meeting Presentation by SCORE Las Vegas - Replanning Your Business.TRANSCRIPT
Business Seminars
After Start Up…
Replanning Your Business
October, 2010Prepared for Real Diaper
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Welcome…
Bob Cushman
SCORE Business Counselor
The Perks of the Small Business Owner:
The Perks of the Real Diaper Owner:
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About SCORE ®
National Association formed in 1964; now with over 12,000 volunteers in 360 + chapters providing 500,000 counseling hours annually
SBA Resource Partner
Non-profit – all counselors donate their time – so all consultations are free and confidential
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About SCORE ®
Largest business Consulting organization in the World
Average Chapter provides free face-to-face counseling, free e-mail business counseling, and offers regular seminars
Find the office nearest you at score.org or use the site to find one of 1,100 online mentors
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FIRST - do you need to
re-organize Your Legal Business Structure?
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What are the Choices?
Proprietorship
Partnership
Corporation
Limited Liability Company
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Proprietorship
• Advantages• Easy to organize• Less reporting• One level of tax
• Disadvantages• Unlimited personal liability• Termination on death of owner• Difficult to raise capital
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Partnership•Advantages•Pooling of resources & talents•State registration normally not required
•Disadvantages•Unlimited personal liability•Partner conflict•Death of a partner causes dissolution
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Limited Liability Partnership
•Advantages•Pooling of resources & talents•Limited personal liability
•Disadvantages•Partner conflict•Death of a partner causes dissolution
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C-Corporation (Federal Registration)
•Advantages•Limited liability of shareholders•Survives shareholders •Transfer of ownership
•Disadvantages•More complex•More reporting•Possible double taxation
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S-Corporation (Federal Registration)
Advantages•Same as C-Corporation except one level of tax
Disadvantages
•No double taxation but no retention of profits
•Generally only people can be owners
•Limited to one class of stock
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Limited Liability Company
•Advantages•Flexible ownership and capital structure•Limited personal liability•Tax choices complex•Losses may offset other income (new)
•Disadvantages•No retention of profits•Complex Operating Agreement
But they don’t stay the same…
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PAUL D. GARNETT AND ALICIA GARNETT, Petitioners v.COMMISSIONER OF INTERNAL REVENUEFiled June 30, 2009.The Garnett’s owned interests in L.L.P.s, L.L.C.s, and tenancies in common. The parties request a ruling as to whether their interests are subject to the rule of sec. 469(h)(2), I.R.C., which treats losses from an “interest in a limited partnership as a limited partner” as presumptively passive.Held: Because they did not hold their interests in the L.L.P.s or L.L.C.s as “limited partners”, these interests are not subject to the rule of sec. 469(h)(2), I.R.C.
BUT THEY DON’T STAY THE SAME…
The Small Business Jobs and Credit Act provides an opportunity to avoid taxes.
Individuals who acquire stock in small businesses after October 1 pay NO capital gains if they hold the stock for more than five years. However, it only applies to C corporations and stock has to be acquired by January 1, 2011 — so act fast.
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Practical DifferencesProprietorship $14,000 13.3%
Partnership $82,500 23.6%
Corporation $28,600 17.5%
S-Corp $51,200 26.9%
Limited Liability Company
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Outline of other considerations:1. Government2. Facility3. Personnel4. Legal5. Accounting 6. Banking7. Risk Management8. Computer and Telephone9. Public Relations10. Suppliers
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Government
Legal Structure of Business
Government Relations
New Hire advantages
Independent Contractors
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Facility (physical location)
Stay at Location with rent reduction?Move to get lower rent?
Lease RestrictionsBuild-out AllowancesSignageLease Options
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Facility (Internet Presence)
Stay at One Website with upgrades?Move to Multiple Websites?
Traffic studies (Alexa, etc.)SEO studiesContent RestrictionsCompetitors
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Personnel
Contracts and Agreements Leased PersonnelUpgrading Job DescriptionsPolicy & Procedure ManualsPersonnel Training
Performance of the processMarketing and Sales
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Legal and Lawyers
Business StructureContracts, Guarantees and AgreementsIntellectual PropertyTax Law Leases
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Accounting and CPA’s
CASH versus ACCRUALAmortization & DepreciationBusiness Structure Tax changesAccounting systemBookkeepingTax strategy/Return preparation
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Banking and Loan Officers Establish relationship with a Second Bank
– Payroll and Payroll Tax AccountSBA approved program lender
– Preferred lenderCredit Card processingLines of Credit
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Risk Management and Insurance
Premises - property and liabilityDirectors & OfficersProduct Liability Errors and OmissionsContents - self and othersAutomotiveEmployeeBonding
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Computers and Telephones
Domain and WebsiteWebsite MaintenanceBackupSocial NetworkingPhone LandlinesCell Phones and Smart PhonesAnswering Systems
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Public and Press Relations
Disposable Diaper problemsLandfill problemsDiaper Rash problems
Social NetworkingLocal PressUnits of larger papers
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Suppliers
NEW SUPPLIERSCredit terms/DiscountsAssured pricesTime lineBusiness plan
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A Resource to MOVE FORWARD…
A NEW
BUSINESS PLAN
The Business Plan: Your Roadmap to Change
• Do I really need it?• Do I really have to write it?
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The Business Plan is a:Document that sells and explainsDiscussion of future plansDemonstration of achievabilityBenchmark for measuring progress
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Using The Plan: External
Bank financingNon-bank financing Investors Landlords Suppliers
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Using The Plan: Internal
A “Sanity” checkForces critical thinkingAllows goals to be setCommits participantsBasis for course correction
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Required Plan Information
Company BasicsPersonnel Resume’sMarketing PlansProduct/Service DescriptionProduction/LogisticsForecast in Units/Dollars
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Plan Length
Narrative:Five to fifteen pages of text
Financials: Longer than the text
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Sample Table of ContentsExecutive Summary (Write this last)Company HistoryMarket CompetitionMarketingProcessingFinancialsAppendices
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Valuable Plan ContentsMarket Overall Demographics – population trends Internet Demographics – usage trends County and Zip Code Demographics Competition How are parents deciding now? Where are they buying now? Include Competitor Information
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Marketing Plan
• Sales Projections (by month for years 1-2)
• Advertising and its cycles
• Promotion Programs and seasonality
A BUSINESS PLAN TOOL:
ULTIMATE BUSINESS PLANNER ®
SCORE evaluated many and choose this because of ease of use and for the sample plans that are included.
Because SCORE is a non-profit, we can sell it for less.
Because SCORE is a non-profit, we aren’t required to charge sales tax.
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ResourcesChamber(s) of CommerceCounty and Municipal OfficesTrade AssociationsData bases -D&B, List BrokersBureau of Census, Bureau of Labor StatisticsNon-competitors (Mentors, Colleagues, Coaches)Public Library
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SOME USEFUL WEBSITES
SCORE National www.score.orgSBA www.sba.govUS Governmentwww.firstgov.govBusiness Plan www.scorelv.orgLegal advice
www.businesslaw.comIRS www.irs.govIntuit www.quicken.com
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Next Steps
•Focus on your current needs•Develop your Business Plan•Use FREE SCORE Counseling
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GOOD LUCK!