Strategic Planning for Owners and Managers

All companies are facing challenges as the country faces the most serious economic times in recent history.

Take time now to sit down with your team. For large companies, this might mean your department heads and partners; for smaller companies, your bookkeeper, and your salesperson. Don’t forget outside advisers - your accountant, lawyer, insurance and benefit agent, financial planner and possibly your banker. And don’t forget your family; what affects the business effects you and your family.

A few things to consider:
 

Employees are either part of the solution or part of the problem.  If certain employees are part of the problem, you are better off without them. Reassess your need for all the employees you have; don’t keep all your employees because you’re trying to be a nice guy. If you don’t reduce a few, it could lead to everyone being out of a job.

As for salespeople, be sure your compensation program is fair to both the company and salespeople. Some commission structures generously compensate the salesperson, but short the company. If it isn’t a win for both sides, it doesn’t work.
             

Use financial statements and your bank as helpful tools. Don’t produce financials to put them in a drawer, or because you must have them for the bank. If you don’t understand your financials, sit down with an accountant and learn how they can help you manage your business. If you’re not sure your financial statements are credible, consider asking a third party - someone other than your accountant - to verify them.

Meet with your bank to ensure they are solid, and that they aren’t thinking your company would be better elsewhere.

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Choosing an Entity Type Which is Best for You and Your Business.

If you have just made the hardest decision of opting to go into business for yourself or if you have owned your own business for years, having a working knowledge of how your overall tax bill is determined can cost or save you thousands. Making the right decision for your business will be critical to both your short terms success as well as eventually how comfortable your retirement might be. To this end, setting up the right entity from day one is your best bet to ensure you pay no more taxes than are legally necessary. The job of your most trusted adviser, your CPA, is to assist and guide in this process being sure to ask questions and contemplate issues you might not have even known to be a concern. As a business owner or running your business, the options will appear to be daunting but these parameters will do much to “lift the veil’ on whether you want your business to be an S Corporation or an LLC.

Limited Liability Company.
Limited Liability Companies/LLC’s are legal in most, if not all, states where their respective legislatures approved them.  LLC’s allow for some flexibility options that are not allowed in some other entity selections as well as some liability limitations that are not otherwise available for professional service companies, those where professionals, such as physicians, are required to have a professional license in order to practice.

Advantages of being an LLC include:

• Ease of formation. LLC’s do not require a Board of Directors or an election of Officers.
• Anyone or entity can have ownership in an LLC. This allows other corporations or those who are not citizens of the United States to be owners.
• Unlimited number of owners.

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When a relationship between an employee and employer breaks down irretrievably a compromise agreement can be the only way to deal with the situation and prevent a possible complaint to an Employment Tribunal.     

A ‘compromise agreement’ is a legally binding agreement following the termination of employment. It usually provides for a severance payment by the employer, in return for the employee agreeing not to pursue any claim they believe they may have to an employment tribunal. Quite often, the compromise agreement will also deal with the notice element in the contract of employment and may provide for a “payment in lieu of notice”.  Employers are now increasingly using compromise agreements as a mechanism for preventing possible future complaints to a tribunal, especially in redundancy situations.  Compromise agreements are recognised by statute and are the only way a claim can be legally binding without tribunal proceedings having been initiated.  The employee must seek the advice of an independent solicitor before the agreement becomes binding.  The solicitor giving the advice must also sign the agreement and certify that the appropriate advice has been given.

Why is a Compromise Agreement Necessary?
The use of compromise agreements in redundancy situations is used mainly if an employer has not complied with the law in making redundancies (perhaps through failing to consult properly, failing to use fair selection criteria etc) where an employee can complain to a tribunal that the redundancy was unfair. This can be done after the redundancy and could result in an award of compensation or even reinstatement.  The only way an employer can be sure that an employee will not complain to a tribunal after redundancy is to persuade them to sign away their right to do so.

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The glitz and glamour of all the Christmas and New Year festivities are now over and summer is a long way away – have you counted the cost of the festive cheer?

For many employers, January is a hard month to get through and absenteeism has a direct impact on your bottom line. 

Have you reviewed who didn’t turn up on Christmas Eve or any of the due days over the Christmas period or on when you re-opened on 5 January and why they didn’t and also what impact this unreliability had on your business?

Current research by the CIPD (Chartered Institute of Personnel and Development) showed that on average an employee takes off 8 days a year and absence costs £666 per employee.   

The cost of absence can be felt in different ways.  For example, it can affect everything from quality of customer service to the speed of product development – issues that may have a negative impact on your sales figures.  If also affects employee morale as those in work shoulder the burden of their colleagues days off.

A CBI/AXA Absence Survey in 2008 showed that 1 in 10 absences are not genuine and 60% of employees have said that they fake sickness to extend a holiday.        
Everyone agrees that sick people need time off work, but as an employer you need to deal with two serious and expensive challenges – bogus sick days and helping employees on long-term illness return to work when they are fit to do so.

1 day sickies are the most common and if left unmanaged this can lead to an increase across your business and employees are more inclined to try it for themselves as they see their colleagues ‘getting away with it’.

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CPA Teaches Your Tax Payment/Filing Responsibilities

Paying Your Taxes/Extensions…The IRS Requires us to Pay as We Go

Since World War II, the IRS has been a pay as you go system. Prior to that time, the IRS simply collected their monies at the end of the year when one’s annual tax return was filed. Many entities by virtue of their tax treatment as flow through entities do not pay any income taxes when the returns are filed but rather the income is communicated to the partners via a K-1 which is a part of the return. The entity’s partners are then responsible for reporting their portion of the earnings on their personal/appropriate returns. Thus there are many entities such as Partnerships, LLC’s, LLP’s, an S Corporations for which no income taxes are due when these returns are filed. 

C Corporations are responsible for paying their taxes as they go and they do not have the ability to pay all of their taxes at year end and still avoid assessed penalties and interest. Thus, it is critical to tax plan several times a year to determine the ultimate amount of year end liability due and to take appropriate measures to plan accordingly. For S Corporations and individuals we suggest that you tax plan at least twice annually. At that time it is also advantageous to review a client’s internal finances and obtain their projections of profits for the rest of the year. By utilizing this information as well as by being aware of their personal return issues, itemizations, exemptions, etc. you are able to get an estimate of what your taxable income and your tax will be.Both the IRS and states require you to pay as you go thus requiring you to pay enough in estimates for the taxes due on the profits/taxable income generated.

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If you are considering investing in a franchise then you will need to become familiar with a whole host of terms, of which franchise agreement is just one. This should be one of the very first terms you become familiar with because it is effectively the document that will govern your business relationship with the franchisor and determine how you are to develop your entrepreneurial goals in the future.

About The Franchise Agreement

No matter which franchise you invest in, you will be expected to sign a franchise agreement because it is the legal document that binds you to the franchise and actually gives you the right to run your own business under it as well. It will detail the obligations that you have to the franchisor just as it outlines the obligations that it has to you as a franchisee.

Legal representatives of the franchisor and the franchisee often draw up franchise agreements. This is to ensure that both parties are treated fairly and have defined legal rights within the agreement. It is not unusual to have one but is actually essential if you want to ensure that you get what you want and need out of your investment.

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Coco Chanel was a female entrepreneur living in a world that was dominated by men in the early 20th Century. She was undoubtedly light years ahead of her time and helped women everywhere by giving them the inspiration and drive to break out of traditional female roles within the home and branch out on their own. Chanel was one of the first women to buck the male conventions of business, and as such will go down in history as an important figure in women’s history, but what exactly did she do?

The Early Coco

Gabrielle Bonheaur Chanel was born on August 19, 1883 in a poorhouse in Auvergne, France. Her mother worked there to try and feed the family. However, Chanel only knew her mother for some six years before she died and was left in the care of equally poor relatives. Chanel was determined not to spend her life working her fingers to the bone as her mother had and began making different entrepreneurial plans at the age of 18.

Coco, as she became known during a brief spell as a café singer, realised that the only way for a woman to make it on her own was to make connections, which she happily did through two wealthy men, a French military man and an English industrialist. She had affairs with both and seemed to capture their hearts, but it was their wallets that they gladly opened to give her the start she so desperately wanted on her way to becoming an entrepreneur.

Coco Fashion In 1910

With the support of both men and their contacts, Chanel was able to open a millinery shop in Paris in 1910. It soon became popular with the ladies that followed fashion. However, this success was not enough for Chanel, who soon became one of the most popular designers in Paris. In fact, many experts argue today that it was Chanel and her entrepreneurial aspirations that made fashion as big an industry as it is today.

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If you are looking for an entrepreneur to aspire to be like or an individual with a lifestyle that you would absolutely love to lead then you now need to look no further. Larry Ellison fills all the criteria as laid out above. Not only is he one of the most powerful and richest men in the world but he has also got to where he wanted to go the hard way. In fact, sheer hard work enabled him to overcome his poor early start in life.

Larry Ellison’s Early Life

Lawrence Joseph Ellison was born in New York on August 17, 1944. At the time, his father had abandoned his mother, who was herself an unmarried Jew. Larry Ellison did not actually meet her until the age of 48 though because an aunt and uncle adopted him at birth. They lived in Chicago, which is where the entrepreneur grew up. His adoptive parents were not poor but they lost their fortune in the Depression. As he grew up, this made sure that Ellison was determined not to follow in their footsteps.

Larry Ellison was always a gifted student when he put his mind to it but, unless a subject interested him, he paid little attention. As such, he managed to get to the University of Illinois but left after just two years. A year later, he enrolled in the University of Chicago but quit after having his first taste of computer programming. He was hooked and knew exactly what he wanted to do for a living.

The Entrepreneurial Path

Larry Ellison moved to California shortly after dropping out of university and worked hard at several companies in order to eventually get a job at the Ampex Corporation in the early 1970s. It was there that he first designed the program that would ultimately make him a billionaire. He worked on a project that aimed to complete a comprehensive database for the CIA and during the process, the entrepreneur invented Oracle.

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