Crawl. Walk. Run.

Crawl. Walk. Run. is an educational series for business owners at any stage of a company’s life cycle. Whether you have just an idea percolating, or are ready to grow your current business, CWR provides expert guidance to keep you in business and out of trouble.

Start Where You Are

Just as the President consults his Cabinet of subject matter experts, business owners must surround themselves with a team of advisors. At a minimum, this team should include a CPA, a banker, an insurance agent, and, of course, an attorney. (I know, groan.) Eventually you’ll bring a financial advisor into the mix to help you figure out what to do with your new wealth, and other more specialized consultants as your needs dictate. Because this team approach is so critical, and because no one wants to listen to a lawyer talk for long stretches, we’ll be enlisting the help of other experts to cover topics like business plans, accounting, understanding your insurance coverage, lending, and others.

Stage 1

Crawl

The first, Crawl, is geared toward those of you just starting out, and covers topics from testing the feasibility of your idea all the way through to getting your doors open.

Stage 2

Walk

Walk is tailored to business owners who have opened their doors and are experiencing some rough patches, are encountering new issues, or who are exploring other ways of positioning their companies for success.

Stage 3

Run

Run is for those of you whose businesses are running like well-oiled machines. You have key employees in place and they’re loyal. You have implemented systems that are being followed and are creating efficiencies. Now, it’s time to explore what’s next.

Crawl

So you want to start a business? During the recession, many businesses were started out of necessity, by people who were truly wired, or at least conditioned, to be employees. Owning a business is starkly different from working for someone else and it’s worth doing some introspection to determine whether being self-employed will fuel you or tax you.

We’ll talk about whether entrepreneurs are born or bred, how you analyze your hard-wiring, and examine whether business ownership is truly right for you. If you’re one of us crazy people who would rather work 80 hours for ourselves than work 40 for someone else, then let’s talk about getting your business going.

Some of the most important decisions you’ll make about your business need to be made long before you open your doors, including how you’ll eventually exit your business. Counterintuitive? Yes. Panic-inducing? Not necessarily. Having a business plan is critical, and now is the time to assemble your team. We’ll discuss how to choose the right advisors, how to structure your business, licensing and regulations, how to bootstrap, the nuts and bolts of getting your doors open, how to run a lean business, and some effective marketing methods.

The Business Plan

  • • Identifies strategy and exit
  • • Tests feasibility of the idea – does it pencil?
  • • Fosters swift, undistracted decision-making
  • • If in line with plan, go for it. If not, don’t.
  • • Helps team get on board and row in the same direction
  • • Review at least annually
  • • Try not to hire out – the journey is as important as the destination
  • • Tweak according to audience – investors, banks, internal compass

Resources Needed

  • • External Support
  • – Financial – Funding
  • – Team of Advisors: Lawyer, CPA, banker, insurance agent, financial advisor (like presidential cabinet)
  • – Business plan
  • – Family support and understanding
  • • Internal Support – Fortitude, analysis of motivations as a reminder when the going gets tough

Mechanics – Nuts and Bolts

  • • Entity Formation
    • – Which entity to choose?
    • – Corporation or LLC
    • – Difference between entity and DBA
  • • Licensing
    • – State and local; which jurisdictions
    • – Licenses for each type of activity
  • • Insurance
    • – Commercial broker, not P&C
    • – Workers’ comp
    • – GL
    • – EPL
  • • Owners’ agreements
    • – Single member – who takes over in case of death or disability?
    • – Multiple owners
    • – Buy/sell
    • – Termination – voluntary and involuntary
    • – Contributions, initial and ongoing (capital calls)
  • • Establish accounting processes that yield financial statements you can understand
  • • Divide revenue streams in QB to track profitability

Running Lean

  • • Leverage technology
    • – Cloud storage
    • – Google Voice
    • – Go mobile to be agile and responsive
  • • Virtual office/executive suite – grow into the services
  • • Don’t be office poor
  • • Sublease?
  • • Virtual staff
  • • Minimal equipment
  • • Square

Marketing

  • • Face to face or traditional advertising?
  • • Networking
  • • Market to others who share your clients, not to your clients directly
  • • What resources do you have available – do you have more time or money?
  • • Follow ups and keep in touch
  • • Invites to newsletters
  • • Online presence and social media

Walk

Being a business owner is a lot like the Wizard of Oz. You may want to give the appearance of being great and powerful, but we all know there’s a guy behind the curtain frantically working the controls. It’s okay to be that guy. It’s okay not to know what all the controls do, or how to work them. And it’s okay to ask for help.

Once you’ve gotten your business up and running, you will inevitably encounter things you never expected – employee issues, disputes with partners, regulations you never knew about, and nuances of your industry that weren’t in the brochures. We’ll help you tackle those issues head-on and implement processes and procedures to help keep you out of trouble.

It’s not all rainclouds, though. We’ll also discuss getting your business certified to create new marketing opportunities, how to choose a business location and what to look for in your lease agreement, and ways to maximize efficiency. This is the phase in which you’ll want to start delegating some responsibility to others. Many business owners are terrible delegators, so we’ll discuss ways you can begin to loosen the white-knuckle grip you have on all aspects of your business, so you can focus on more important things.

DBE Certifications

  • • Minority, woman, veteran owned
  • • Supplier diversity departments

Delegate Weaknesses

  • • Make a list of all activities – delegate those that are non-revenue generating
  • • Do you have more time or money?

Hiring Employees/Contractors

  • • Difference between
  • • IRS vs State analysis

Importance of Contracts

  • • Confidentiality
  • • Non-solicitation
  • • Non-competition
    • – Enforceability
    • – Reasonableness in geographic scope and duration
  • • Job duties and responsibilities

Handbooks

  • • Outlines guidelines that can lead to discipline and termination, to avoid wrongful termination claims
  • • Outline expectations
  • • Social media policies
  • • Dress code
  • • Workplace injuries
  • • Document everything to avoid trouble

Hiring

  • • Job description
  • • Job application
  • • Retain notes
  • • Employment agreements w handbooks

Managing

  • • Disciplinary process
  • • Timekeeping

Firing

  • • Written documentation of discipline
  • • Final check within statutory timeframe

Possible Trouble

  • • Wage claims
  • • Unemployment insurance claims
  • • Workers’ comp claims
  • • Wrongful termination
  • • Audits – IRS and state

Bringing on Partners

  • • Roll up their sleeves partners (actively involved)
    • – Expectations in owners’ agreements
    • – Consequences for failing to meet expectations
    • – Involuntary termination of ownership
  • • Buying in with cash or services?
  • • Investors (depend on the efforts of others)
    • – Securities laws

Expanding into Commercial Space

  • • Real estate brokers
  • • Review of lease agreements
  • • Types of leases
  • • CAMs
  • • Termination
  • • Auto renewal/option to extend
  • • Exclusivity Agreements
  • • Annual escalators
  • • Hidden tenant obligations
    • – HVAC
    • – Repairs
    • – Inspections

Lines of Credit

  • • Manage cash flow
  • • Community banks vs big banks
  • • SBA loans
  • • Microloans

Systems & Efficiency

  • • Establish processes and procedures, systems for more efficiency and less duplication
  • • Identify and solve common issues that arise
  • • Regularly review financial statements for opportunities to tweak
  • • Employee training
  • • Procedures/manuals
  • • Customer processes

Run

Congratulations. Your business is humming along, you’ve hired and retained key employees to handle the heavy lifting, you need only make minor tweaks here and there, you’re cutting out early to go golf or to the spa, and you’re mastering the art of working only a few hours a day. If you’re like most business owners, you’re bored and thinking “what’s next?” In this segment, we’ll discuss expanding into other markets, seeking new opportunities, buttoning down your processes, and how to prepare – both yourself and your business – for an exit.

Delegating to Key Employees

  • • Insurance policies
  • • Checks and balances – keep everyone honest

Additional Locations

  • • Series LLC?
  • • District Managers – expansion of the org chart – someone between you and the rest of the company. Be the CEO – provide overall vision and guidance, but the ship is heading in the right direction thanks to the foundation.

Buttoning Down Your Business

  • • Common issues – how to rectify
  • • CFO consultant to uncover leaks
  • • Get advisors in one room for regular meetings
  • • Tweaking and improving systems
  • • Maximize efficiencies

Identifying Other Opportunities

  • • Mergers & Acquisitions
  • • Buying a competitor
  • • Strategic Alliances/joint ventures
  • • Offering additional services
    • – Align with established firm, or do it yourself
    • – Do you have the capacity, infrastructure, etc?
  • • Offering fewer services – is there something that isn’t as profitable?

Possible Exit

  • • Sale
    • – Clean up financial statements
    • – No personal expenses
    • – Gather and organize needed information for due diligence
  • • Pass to children

Ready to grow – and stay out of trouble?

Wherever you are in your company’s life cycle, Crawl | Walk | Run gives you the expert guidance to take the next step with confidence.

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