1. Advice from CPAs Ten Ways To Protect Your Business

2. Business Plan Reflects your goals for the company Identifies steps necessary to accomplish them Plan describes: – Where you company is today – Where you want it to be tomorrow – How you plan to get it there

3. Financial Aspects Getting started Financing sources include: – Angel Investors –Venture Capital Firms –Local Banks – Small Business Administration Determine the loan schedule that best fits your needs

4. Debt and Equity Financing Debit 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

5. 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

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

7. Marketing Customer loyalty is key Promotional efforts to raise your visibility – 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

8. Legal Structure Sole proprietorship Partnership – General – Limited Limited liability company C or S corporation

9. 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 Legal Structure

10. 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

11. Managing Business Risk Types of Insurance: – Group, life and health – Casualty and theft – Disability – Workman’s compensation – “Key man” – Liability – Automobile A CPA can appraise your business to assess risk

12. Managing Your Workforce Effectively Determine the need for adding a position Follow federal and state hiring guidelines to avoid violating discrimination laws The job description is an important tool What is your responsibility as a business owner? – Clearly communicate philosophy to employees – Provide regular evaluations – Carefully document legitimate reasons for termination

13. Effectively Using Technology Is your technology serving the needs of your business and customers? Businesses can deduct new equipment purchases Government allows you to recoup depreciation deductions not taken from prior years May want to consider leasing equipment

14. Succession Planning 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 Life insurance is an important planning tool Create incentives to retain key employees CPAs can provide invaluable advice

15. 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 computer

16. Using Professional Advisors Effectively How can you find a CPA? – Ask business associates, friends, state CPA society Legal guidance may be necessary Screen before hiring – Conduct an in-person interview – Ask for written proposal outlining objectives – Make sure fees and expenses are listed

17. Thank You!