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Ten Ways to Protect Your Business

Ten Ways to Protect Your Business. #1: Create and Stick to Your Business Plan. Reflects your goals for the company Identifies steps necessary to accomplish them Describes: Where your company is today Where you want it to be tomorrow How to plan to get it there.

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Ten Ways to Protect Your Business

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  1. Ten Ways to Protect Your Business

  2. #1: Create and Stick to Your Business Plan Reflects your goals for the company Identifies steps necessary to accomplish them Describes: • Where your company is today • Where you want it to be tomorrow • How to plan to get it there

  3. #2: Consider all Financial Aspects Financial sources Debt and equity financing Cash flow Annual budget

  4. Financial Sources Angel investors Venture capital firms Local banks Small Business Administration (SBA) Determine the loan schedule that best fits your needs

  5. Debt and Equity Financing Debt financing – loans must be repaid • Commercial, savings banks • Credit unions Equity financing – selling all or part of your business to others • Capital firms • Employee stock ownership plans • Joint venture or licensing agreements

  6. Cash Flow Effective cash management enables you to increase and invest your money Work with your CPA and review financial statements Simple ways to improve cash flow • Bill customers at the time of transaction • Offer discounts for early payments of invoices, if applicable

  7. Annual Budget Create an annual budget and review it Budget allows you to: • Compare performance to projections • Communicate your expectations

  8. #3: Market Your Services Promotional efforts raise your visibility Establish a presence for your business Ideas include: • Customize advertising to niche markets • Identify and respond to emerging trends • Set up joint promotions • Become involved in local business associations • Give speeches in your community

  9. #4: Select the Proper Legal Structure Sole proprietorship Partnership • General • Limited Limited liability company C or S corporation

  10. Sole Proprietorship v. Partnership Sole proprietorship – one person business • Do not need to file any papers to set up • All business income and losses are reported on personal tax return Partnership – owned by two or more people • General – responsible for operations and personally liable for debts • Limited – minimal control over decisions, but not responsible for debts

  11. LLC v. Corporation Limited liability companies, or LLCs – owners pay taxes on their share of the business income Corporation – separate from people who own, control and manage it • S corporation – stockholders pay income taxes on business income on personal tax returns • C corporation – company is taxed on business profits

  12. #5: Assess Your Risk Tolerance Assess the risks that can either propel your business forward, or expose it to loss Insurance is a tool you can use to protect against loss • Group, life and health • Casualty and theft • Disability • Workman’s compensation • “Key man” • Liability • Automobile

  13. #6: Manage Your Workforce Effectively Determine the need for adding new positions Follow federal and state hiring guidelines to avoid discrimination laws Use job descriptions as a tool for creating expectations Determine your responsibilities as a business owner: • Clearly communicate your philosophy to employees • Provide regular evaluations • Carefully document legitimate reasons for termination

  14. #7: Use Technology to Your Advantage Does your existing technology serve the needs of your business and customers? Consider leasing equipment Look into cloud computing options Protect using technology: • Employ solid IT security • Create a social media policy for your business and for staff

  15. #8: Create a Succession Plan Life insurance is an important planning tool Create incentives to retain key employees CPAs can provide invaluable advice More than 70% of family-owned businesses DO NOT survive from founder to second generation Planning should begin 5 years prior to leaving Tax saving strategies are an integral part

  16. #9: Beware the Possibility of Fraud A number of ways to reduce the risk • Conduct audits to uncover irregularities • Separate your recordkeeping functions What should you do if you discover a discrepancy? • Call your bank • Check your credit report every six months • Be sure you have virus protection on your computers • Place spam protections on email accounts and avoid opening email attachments from unknown senders

  17. #10: Seek Advice from a Professional How can you find a CPA? • Ask business associates, friends, state CPA society Consider legal guidance as well Screen before hiring • Conduct an in-person interview • Ask for a written proposal outlining objectives • Make sure fees and expenses are listed

  18. Thank you!

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