by eclewis | Jan 3, 2013 | Business News
One of the most common reasons new clients come into my office after the New Year is because the person (or persons) want to start a business. After yet another year has gone by working as part of a big corporation, people start to reconsider their purpose in life. Some decide that rather than working another year under someone else that this is the year that they are going to start their own venture – the year that they are going to enter the ranks of America’s small business owner.
There are many steps to starting, and then running, a small business. Meeting with an attorney is only one step in many. Some of the other steps include (and not necessarily in this order): meeting with a CPA, meeting with a banker, creating a business plan, researching your competition, finding business space, and finding a business advisor. It also requires deep soul searching to make sure that your personality and being a small business owner can work together – most small business owners (and I bet almost all successful ones) end up working longer hours than they ever believed imaginable!
There are many earlier posts about the types of businesses that you can start (and as always, I recommend speaking with an attorney like myself prior to starting a business to make sure you start it right). Therefore, rather than talking LLC/corporations/partnerships/etc., this month, we are going to talk about the basics of how to decide who to go into business with. Next week we will start with the pros and cons of going into business by yourself. The following week, going into business with a spouse or significant other and then with partners. Finally, we will talk a little about going into business with friends and family.
I hope you have a great New Year’s and that you have come up with some great New Year’s Resolutions! If any of your resolutions include business needs, make sure to call me, your Denver business attorney, Elizabeth Lewis, today at 720-258-6647!
by eclewis | Dec 27, 2012 | Business News
This month’s blog series has been focusing on preparing for the upcoming New Year. The first week of December, we talked about business planning and last two weeks we have talked about real estate and equipment leases. For that last post in this series, we are going to talk about changing your company’s legal structure.
When we talk legal structure, we are talking about the way that your company is treated under the eyes of the law. There are four main legal structures in Colorado that companies are organized under: sole proprietorships, partnerships, LLCs, and corporations. There are several others but those are typically less common for companies (for example, non-profits and co-ops) so we aren’t to discuss those today.
Sole proprietorships are set up by default when someone goes into business by him or herself and doesn’t set up an LLC or corporation. In some cases, people set up sole proprietorships intentionally for a variety of reasons including ease of setup and small liability issues. Standard partnerships usually are setup for similar reasons – by default because two people start working in a business. Both entity types can be appropriate for some situations. However, the situations are few and far between so if you are set up this year as a sole proprietorship or partnership, you really should be speaking to a business attorney to see if this is the appropriate structure for your business.
The next two types of business structures are by far the most common: LLCs and corporations. If you are set up as an LLC, you may want to speak with you business lawyer and your business CPA to determine if this structure is correct – especially as many times LLCs are taxed as either sole proprietorships or partnerships. If it is determined that you should move to s-corporation or c-corporation or depending on if your business has changed since it was organized, your business attorney may advise that moving to a corporation is a good thing.
In most cases, if you are a corporation, you will not be thinking about changing entity types. However, with some of the new regulations under ObamaCare and depending on what happens with the tax changes and the fiscal cliff, you may want to have a discussion with your business lawyer and business CPA to see if for tax reasons an s-corp or c-corp is still appropriate.
As always, if you have any questions about your small business or need help with determining if you business structure is correct, please call me, your Denver small business lawyer, today at 720-258-6647.
by eclewis | Dec 18, 2012 | Business News
This month’s blog series has been focusing on preparing for the upcoming new year. The first week of December, we talked about business planning and last week was reviewing your real estate lease. This week we are going to stay on the topic of leases, but move to a different kind of lease – equipment leases. Not all business have equipment leases, but those that do (or those that are thinking of entering one) have special things that they need to consider.
We are going to focus on three areas: (1) reviewing your equipment lease, (2) preparing to enter into a new lease, and (3) checking the status of any UCC filings. Doing certain tasks related to each of these areas can help make sure that you are ready for a successful new year!
If you have current equipment leases, you want to review them at least annually. Most equipment leases have automatic renewal terms in them. These terms are many times not favorable to the small business owner. You may be paying high prices for outdated equipment. By finding out if the equipment lease automatically renews, you can negotiate a better contract prior to the renewal or cancel the automatic renewal and find another company to work with. For example, you may have leased a copier and have two year old technology now. However, you may be paying the same monthly price for renting the equipment next year that you paid two years ago. As the equipment is two years old, the price for renting it should be going down. By knowing that the equipment is set to automatically renew, you can contact the copier company and say either they need to lower the monthly payment or take your business elsewhere and have a fancy new copier this next year! In addition, if you have had problem with your equipment, you may want to see if the lease includes maintenance and, if it is set to renew, will it continue to include maintenance. Maintenance can be costly if you have to do it on your own – and if you are renting, you won’t have anything to show for the costly maintenance when you turn the equipment back in.
If you are looking to grow (or are going to be needing a new lease for equipment because you aren’t automatically renewing your old equipment), and you are going to need new equipment, you need to have your financials in order. If you are looking for lease or lease to buy expensive equipment, the leasing company may want to do a credit check first and/or see your financials. If you have prepared a business plan, you may be able to get the financials directly from it. If not, you should be preparing for your upcoming taxes and be able to have the financials ready to go from that. If you have been bad about your credit, now is a good time to start looking at it – and if you are a small business, you will need to look at both the company’s and possibly your own credit. Having good credit can get you better terms and may make the difference between getting a lease and not getting one.
Finally, if you have leased equipment in the past (and to be honest, even if you haven’t), it is a good idea to check online to see if there have been any UCC filings against you or your business. You can check with the Secretary of State’s Office online by searching for your business name and your name. UCC filings show if someone is claiming a lien on your property if you don’t make a payment for debts owned to them. While a UCC filing is fairly common, if you have old ones that haven’t been removed and the underlying debt has been paid, you will want to get those taken care of sooner rather than later. You can contact the credit company directly or work with a small business lawyer like myself to get the matter cleared up.
As always, if you have any questions about your small business or need help with equipment leases, please call me today at 720-258-6647.
by eclewis | Dec 11, 2012 | Business News
This month’s series of blog posts are focused on preparing for the new year. Last week, we discussed business plans and why they are important. Today, we are going to shift focus and talk about your business’s lease. As the new year approaches, it is a great time to review a document that you may not have looked at for a few years. Depending on your current situation, it may be a good time to negotiate a lower price, ensure that you are paying the right CAM charges, or make sure that you have sent in your renewal notice if it is due.
So when reviewing your lease, what should you be looking for? If you are in a space that you hate or you think you are paying too much for, you may want to look at the lease to see if you can either get out of it or negotiate an early termination. Reasons for early termination may include failure to calculate CAM charges correctly, failure of the landlord to keep the property to minimum standards, and other terms present in your lease. As leases vary greatly, you will have to look at your lease to find out if there is anyway to get out of it specifically. If there is not a way to get out of it and you are struggling financially, you may be able to negotiate lower rent or an early termination for a fee. Again, this varies on many facts so you may be in a situation you cannot get out of.
If you love the space you are in and think that your base rent is about market value or if you are in a situation and cannot negotiate an early termination or reduced rate, you still want to review your CAM and other charges above the base rent if you are responsible for them. In some cases, you may be paying more than you should for things such as water, electricity, insurance, and common area maintenance charges. If you have not had an accounting recently, you should request a written accounting. If you have had an accounting, you will want to review it to make sure you are actually paying what you should. If you are being overcharged, you need to talk to your landlord to rectify the situation.
Lastly, many leases include rights of renewal if you negotiated it when you signed the lease. These rights of renewal many times include specific time frames that you need to comply with to excise your right to renew. If you have a space that you love, one that you put a lot of money into, or one that meets your current needs and you want to stay in, make sure that you know when you need to inform the landlord that you are renewing. If it is in the next few months, you may want to have the renewal notice ready to go. Either way, you want to make sure your calendar is marked with the date you need to send it in so you don’t miss the deadline.
If you have any questions about leases, your rights and obligations under your lease, or any other business needs, please feel free to call me, your Denver small business lawyer, today at 720-258-6647!
by eclewis | Dec 4, 2012 | Business News
The New Year is only five weeks away! Today is a great day to review your business plan for 2013. And if you don’t have a business plan, today is a great day to start one. So, why is a written business plan important? And, what are the essential areas that you should make sure are in your business plan?
Written business plans are good because they give you, the owner of a small business, the chance to sit down and really think about your business. When writing a business plan, you have to think about a lot of areas of your business. What kind of growth plan do you have in mind? What kind of financials do you currently have? Are you going to need loans or other capital infusions? Are you going to be moving into a new space? Hiring employees? Where has your business come from? Have you met your financial and other goals since you have started? If not, why not? All of these are important questions to ask and answer. When you sit down for a few hours to focus on your business plan, you can take the time to invest in your business to make sure it gets to where you want it to be.
When you are preparing a business plan, you don’t need to pay someone thousands of dollars to help you. You can start with the business plan available on SCORE’s website and get the basics. Even if you are looking for financing and need a more formal business plan in order to secure money, you can find many free or low cost resources to help. If you need any, please call or email me.
The essential parts of a business plan will be your vision for the business, financial status, your marketing plan, and your goals for the future. Your vision statement will include what your business does, who your target customer is, and how you are a different from the competition. If you have been in business for several years, you may have a clear idea of this. If you are new to business, you can take time to determine how you are going to position yourself.
Your financial status will include your past information (if in business) and your future projections. Again, if you are currently in business, doing this may be easier than if you are just starting. Either way, you want to make sure you have three different scenarios you are working with – best case, worst case, and most realistic. Your best case, while still being in the realm of realistic possibilities, should forecast your sales if everything goes according to plan. While this rarely happens, it gives you a goal to shoot for. Your most realistic plan should account for some issues coming up such as bad weather during busy sales times leading to lower sales, issues with employees, higher than anticipated expenses, and other issues. This lets you know what is a realistic financial goal for you to reach. Finally, and hopefully this will not happen to you, you will want to plan for the worst. What are your financials going to be if everything goes wrong? How are you going to cope with this situation? By being prepared, it helps ensure your business can overcome difficult times.
Your marketing plan can be an essential part of your business. In fact, some business schools are moving away from having a formal business plan writing requirement and going only to a marketing plan requirement. Marketing plans help you determine how you are going to find customers – something that is essential for every business from business attorneys like myself to plumbers to coffee shops. If you don’t have clients, you can’t make money (well, most of the time). You will want to plot out what you are going to do for both online and offline marketing and how you are going to get your services in front of those target markets listed in your vision statement.
Finally, you want to think about growth. Where do you want to be next year this time? Two years from now? Five? Ten? You have to plan on how you are going to reach this growth. Are you going to grow slowly for several years and try to grow larger later (for example, if, like me, you started a business when your kids where young and want to wait to expand with employees until they are in school)? Do you want to grow quickly and then scale back later (for example, if you are wanting to retire in 20 years, you may want to grow now and scale back to part time then)? Do you want to hire employees? Or think you will need to? All of these are things to be thinking about.
As you write your business plan, be thinking about the services you will need this upcoming year. Financial, legal and tax services can cost money and should be planned for. If you need any help with your legal services, or determining what services you should be planning for, make sure to call me, your small business attorney, at 720-258-6647 or email me today!
by eclewis | Nov 5, 2012 | Business News
Recently at Starbucks, I mentioned that I had a “Lucky Dozen” alert on my iPhone showing I had earned a free drink or food item. The barista looked at me and said that what sounded really good was Dunken Donuts. While my three pump, non-fat, Chai was being prepared (free of charge due to their rewards program), we talked about the upcoming Dunken Donuts return to Colorado. For those not in Colorado, we are a Dunken Donuts desert. While we had these mythical places in my youth, they have long since disappeared along out mountainous background to places like Florida, DC, and New York.
It is rumored (well mostly confirmed) that several will be opening up next year bringing back the donuts we remember from our youth. However, much like Ikea, Steak and Shake, and Krispy Kreme, rather than opening in Denver proper, it is reported that these donut havens will be opening in South Metro Denver in the lands of Lone Tree and Centennial. So why when Denver is the capital of the state, did Dunkin Donuts and others choose to open down south? Business friendly policies.
While Denver is known for many things – we have Mile High Stadium, downtown, and Coors Field – unfortunately, it isn’t known for being particularly business friendly. So what makes a city business friendly? Here are my top two things:
1. Business Friendly Tax and Licensing Policies. Tax and licensing policies can make all the difference between a city being easy to work with and not being easy to work with. In business friendly cities, tax and licensing policies make sense. To open a business, the business owner doesn’t need to worry about filing tons of forms or worry about complying with taxes, rules and regulations to open a standard business (one look on Denver’s business page and you can find that businesses from a-z are regulated). Business owners need to worry about running their business.
2. Business Friendly Transportation. If you want to locate your business downtown, you have to worry about parking for employees. There are more options for public transportation, but there are only about 83,000 rides taken on pubic transportation each year in the Denver Metro Area – showing that most people still drive. If you are located in South Denver, parking comes with the buildings in most cases. There are no additional fees and less gridlock.
Whenever I work with clients, one of the first questions I ask is where the business is going to be located. When you are thinking of where to locate your business, consider the following:
1. Do you employees or clients need access to easy parking?
2. How many taxes will you need to pay?
3. What are the licensing fees?
4. What are the regulations for your business type?
5. Are your employees going to live in the same city where you are located?
6. Are there tax breaks for the city you are looking at?
7. Does the city tend to have business friendly policies?
8. Are other businesses moving into the city or away from it?
9. Are there other cities nearby that have better policies?
Where your business is located can have a huge impact on the bottom line of the business (and sanity of the owner).
