The Foolproof Training Method to Expand Your Business

One of the most critical components to building a company, as opposed to a solo practice, or even a business where you are managing everyone and everything, is to learn to step into your full leadership.

A primary key to that leadership is your ability to train your team so that you can confidently delegate key tasks and responsibilities that will free you up and allow your business to grow.

As a business owner, management is not the highest and best use of your time, energy, and talents. Carefully selecting support staff and then training them using a business model that emphasized leadership over management is an effective place to begin.

Most business owners train their team members using a project management style of training. Specific tasks are given, followed by specific instructions on how to do those tasks. The next logical step is for the owner to then monitor whether the tasks were done to the proper specifications.

This is not leadership. It’s project management. Using this model, the people you’ve hired will be disempowered, and you will get stuck in the role of babysitter, rather than leader.

Steve Jobs, former CEO of Apple put it well when he said, “When you have really good people, you don’t have to baby them. By expecting them to do great things, you can get them to do great things. A-plus players like to work together, and they don’t like it if you tolerate B-grade work.”

Unless you want to be your company’s project manager, micro-managing details and always feeling stuck in the weeds, there’s an alternative methodology for training your team members that will establish your leadership and get the results you want, right from the start.

Outcome, Resources, Deadlines, and Check-Ins

When you are bringing on a new team member, instead of giving them specific tasks and specific ways to perform those tasks, and then holding them accountable to those tasks, give them outcomes, resources, deadlines, and check-ins.

Here’s how that looks:

First, identify the specific outcome the company needs.

For example, we need to publish a weekly article to our website and then send it out as a newsletter to our clients. Or, we need to send out a monthly newsletter to our clients each month. Or, we need to use this tracking software to ensure that everyone who calls our office gets a response weekly, monthly, quarterly, and annually.

Second, give the team member the specific company resources available to meet this outcome.

In our case, using the weekly article as an example, I would let the team member know where I’ve found or curated articles in the past. Or let the team member know to ask me for the article each week. I would then give the team member a login to our website and the service we use to send out the newsletter. I would also provide a document with standards for posting the weekly article and sending out the newsletter.

Third, give the team member a deadline.

Let your new team member know specifically when he or she is expected to have this outcome completely handled without any input from you. Then, let your team member begin, with you working in parallel, also completing the task yourself as a transition period, and set a  deadline date for the team member to take it over completely.

Finally, schedule periodic check-ins between the time that the outcome is given and the deadline date.

This allows the team member to communicate challenges  and identify any missing information.

This method allows your new team member to get in there and just start figuring it out, and make some mistakes (which is a key part of learning) while also having the support necessary to fill in any gaps in the training or resources.

Still not clear? Imagine you are trying to teach someone to tie their shoes. You could explain it for hours and hours. You could even show them how to do it. But until they get their hands on the laces,play around with them and make mistakes, they won’t ask for help – and they won’t learn to tie their shoes.

Make a shift today from the project management style of training and into the leadership style of training and watch your business expand. As your Business Attorney, we can help you to make decisions around your hiring process and ensure you are bringing A-level people to your team, to allowing this effective leadership style to be effortless.

This article is a service of Gratia P. Schoemakers, Business Attorney. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

Steps You Can Take Now to Create a Succession Plan

Many small businesses are family owned. While family owned businesses enjoy the benefit of familial solidarity, their strength is often threatened when it’s time for leadership to be passed down. Succession plans help ensure the transition from owner to owner is an easy one, but many small and family-owned businesses do not have such a plan in place.

You may think that succession planning doesn’t reap immediate benefits, and as a result overlook it as a critical component of your current business success. However, what we’ve repeatedly found is that succession planning now strengthens your business, supports it to grow now and allows for the longevity and legacy you desire.

And, the best part of succession planning is that it can allow you to chart the vision for your future, as the business owner, so that you can begin to experience the freedom you may have desired when you first started your business.

Growth

Employees brought in from outside the company (and the family) might become disappointed with the opportunities—or lack thereof—for growth. A family-owned business that cannot attract talent to take the reins and keep the company viable throughout a leadership transition is risking a lot and can keep your company from the growth you desire.

Small-business owners need to clarify each employee’s role, including its limitations. Being upfront about the room for growth from the beginning can help employees make the most of their positions and allow them also to be clear about what they want out of the role and how they want their talents to be used. Small business owners should be flexible when attracting top talent. If they are not able to provide them room for growth, they should be sure the position is worthwhile in other ways if advancement is not a possibility.

Reluctant Leadership

When a business owner starts from the ground up and sacrifices years of time and money to grow his or her business, it can be hard to let it go. Some business leaders are reluctant to retire because they have a psychological investment in the company. This can create significant barriers to succession planning before it’s too late.

Begin by creating a phased transition plan. A phased transition plan can help you to retain some involvement while incoming leaders learn the ropes. This works to break down the barriers in passing the baton. Easing out of and into new roles creates a more successful transition as the incoming leader takes time to get to know and understand how the current leader sees the future of the company.

If you are ready to create a succession plan, start by sitting down with us. As your Creative Business Lawyer®, we can guide you in making the difficult decisions you face every day as a leader in business, including when and how to hand off leadership roles. We can look out for your business’s future, so you have time and energy to focus on growth and expansion.

This article is a service of Gratia P. Schoemakers. We, at GP Schoemakers, PLLC, offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule your private and confidential session and find out your business LIFT status.

The 4 Deadly Legal Mistakes Small Business Owners Need to Avoid

Small businesses dominate the American business landscape, but those that survive several generations are relatively rare.  If you are a small business owner, you need to be sure you are not committing any of these four deadly legal mistakes:

  1. Mixing personal and business finances. If your small business started as a hobby or a sideline but has grown to a point where it is your main source of income, you need to consider forming a legal entity for it, like a corporation or limited liability company (LLC).  Most small business owners choose an LLC for the personal liability protection it provides without the formalities of a corporation.  An LLC also makes it easier for you to transition the business to other partners or future generations and since it is taxed as a pass-through entity, profits are not taxed separately but instead flow through to the owner.
  1. No employment agreements. Employment agreements should be used to spell out expectations, especially in family-owned businesses that may have been funded by one or more family members who expect reimbursement or those who expect a job at the family firm based on nothing more than a familial relationship.
  1. Failure to obtain proper licenses. Most businesses are required to have local, state or federal licenses to operate, with fines assessed for those that fail to get these licenses.  They are generally inexpensive but are often overlooked.  Check with your city or county offices to see if your business requires a license to operate.
  1. No succession plan. If your business has no formal legal entity, it will pass when you do.  Many small businesses fail to last through the first generation due to the lack of a succession plan.  Consult with a Creative Business Lawyer® about creating a succession plan for your small business, so the value you have built over the years is protected after you are gone.

We can help you discover if you have what it takes to start your own business and guide you through the steps to successful entrepreneurship. Whether you are new to entrepreneurship or already operating a business, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.

 

The Family Business: Avoid These 4 Lethal Legal Mistakes

If you operate a family-owned business or are considering starting one up, there are four potentially lethal legal mistakes you should take care to avoid, including:

No employment agreements.  Family members who work together are usually hesitant to confront one another if someone is not pulling their weight.  Having an employment agreement for everyone ensures that expectations for job performance are spelled out and what the grounds are for termination.

Mixing family and business finances.  Many family businesses start with loans from various members, and as the business grows, those initial investments need to be protected.  This is the stage when you want to consider setting up your family enterprise as a limited liability company (LLC) or a corporation.  Most small businesses use an LLC structure, which provides liability protection for personal assets and allows for company profits to flow through to owners.

No licenses.  Even if you operate out of your home, you will likely need to obtain a local, state or federal license to operate your family business.  While licenses are generally inexpensive, the fines for not having them can be costly.  You can find out what the requirements are in your area by contacting your city hall or county office.

No succession plan.  Family business feuds can easily occur when there is no succession plan in place.  Also, legally speaking, if a business has not been incorporated or formed as an LLC, the business dies when its owner does.  If you started a family business to keep it in the family, you need to follow through with a formal succession plan.

Having a business attorney who understands the individual needs and unique circumstances of your company is key to helping your business thrive and prosper. If you are interested in learning more about legal protection strategies for your business and how we work with you as a partner in protecting your company, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.

Insurance Considerations for Small Businesses

Opening a small business brings excitement as well as uncertainty. As a small business owner you face many risks, but there are steps you can take to protect yourself against them. Obtaining insurance coverage is one big way you can protect your small business and help minimize many of the risks you face.

The kinds of insurance you will need to protect your business will vary based on what type of business you run, how it is structured, and where its potential liabilities fall, so make sure you speak with a lawyer about what specific protections your business needs.

At a bare minimum, if you provide services, you should have professional liability insurance to cover you against negligence claims from errors or omissions. If your business produces a product, you will also need products liability coverage. This coverage will protect you if you are sued because a defective product harmed someone.

If you have employees, even just one, you also need to have workers’ comp insurance. This covers medical care, disability and death benefits for an employee who was injured or killed as a result of the work. And, you may want to consider employment practices coverage, which will pay for you to have a lawyer represent you if you are ever sued by an employee, which is one of the biggest lawsuit risks you have as a business owner.

Most businesses also need some form of property insurance. If you have a home-based business, some losses may be covered by your homeowners’ insurance, but be sure to check your policy thoroughly. And you will definitely need separate insurance to cover business assets such as inventory and equipment.

You will need vehicle insurance if you have a vehicle for your business. Your personal auto insurance policy may cover you for some limited business use, but you won’t be covered if the vehicle is used primarily for business purposes. Make sure you optimize your policy to suit your businesses’ needs.

Business interruption insurance covers your day-to-day losses in the event you experience a closure or some other barrier to normal operations. This can help keep you afloat while cash flow is reduced.

And, of course you will want to consider personal insurance, such as disability coverage for yourself, in case you cannot work, and life insurance, as well, to cover your family and business in the event of your death.

As you can see, there are several types of insurance coverage for small businesses. Businesses in certain industries, such as manufacturing or logistics, may need additional insurance policies to cover industry-specific losses.

Knowing what types of insurance you need and the amounts that are right for your business and family is crucial, and it is not uncommon for business owners to need help with this step.

A good place to start is speaking with a trusted legal advisor who can help you determine what kinds of legal risks you face and what kind of insurance you need. Sit down with us as your Family & Business Lawyer to discuss how to best protect your business. Choosing the right insurance package can make all the difference in your business’s stability and security.

This article is a service of Gratia P. Schoemakers, Family & Business Lawyer. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

Do You Have a Business Succession Plan In Place?

As a business owner, you’ve taken on a big responsibility to your family, your clients/customers, your team and your partners. Most businesses are not sufficiently liquid to keep the company going and the owner’s family thriving, in the event of death. But with the right plan in place, you can ensure the people you care most about are well provided for if anything happens to you.
While facing death is not the most pleasant prospect, doing so can actually make your life and business a whole lot better. A life and death plan – also called a succession plan – for your business will ensure you have:

  • Enough insurance (and the right kind of insurance) to provide cash to keep your business going in the event of your death;
  • A written plan to designate who will run your business (or prepare it for sale), when you are no longer able to do so;
  • Documented access to your digital business assets so your business can continue to serve customers, collect payments and pay expenses;
  • A plan to keep your business (and your family) out of probate court, which is totally unnecessary and avoidable;
  • An updated inventory of your business and personal assets so nothing you own is lost to the State Department of Unclaimed Property and so your intellectual property is well-protected and capitalized upon;
  • The story of your business, written, video or audio recorded, so you can leave a documented legacy of the lessons and experienced you learned along the way.

With a succession plan in place for your business, you can rest easy knowing that if anything happens to you, the people you care about most — your family, clients and customers, your team and partners — will be well cared for, in just the way you want. The peace of mind  which comes with that knowledge frees you up to focus on creating more income and a bigger impact now.

Creating and documenting a business succession plan is truly a win-win-win situation.  If you are ready to set up yourself, and your business, and the most important people in your life to win, no matter what, we can help you accomplish just that.  We’ll ensure you get from where you are now – no matter what stage your planning is in currently – to exactly where you want to be. That’s our commitment to you.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you structure your operations for success. One of our primary services is a LIFT Start-Up Session,™ in which we guide you through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate.  Call us today to schedule a time to have a conversation!

 

Your Family Business Legacy Matters Enough to Do These Three Things

Your family-owned and run business can be the greatest gift or the greatest burden to the people you love, if and when something happens to you.

If you’ve planned well and properly for your business to be continued, managed or sold, it will be the gift that keeps on giving and shows your family just how much you cared about them.

If you have not planned well and properly, it will be the gift that keeps on taking and creates an energy, time, and resource drain that costs your loved ones years of headache and leaves them with a nightmare of a mess to clean up.

Fortunately, you are reading this article now and there is still time to take these three actions that will make it far more likely your family business legacy creates the outcome you desire.

Organization and Formalities

One of the key elements in creating a family business legacy you can be proud of is organization and following formalities you think may not apply to you.

The truth is that with a family business, it’s even MORE important to follow the formalities. Your family deserves it.

This means having an updated operating agreement governing the operations of the family business, clear terms with any partners, in writing, taxes up to date, and clarity regarding who takes over and how when something happens to you.

Some things to consider: Who will be in charge of daily operations? Who will make personnel decisions? What about inventory? What is the chain of command? How will clients and customers be handled? If you have partners, will they buy out your family after you are gone? How? In what time frame?

Considering the answers to these questions now will save your family a huge amount of stress and leave them with the biggest gift you can possibly give them.  If you do not want to deal with it now, imagine how they will feel dealing with it after you are gone and be willing to do what’s hard. We can help and make it far easier.

Communication

How do you know what to communicate about and who to communicate it with?

In most cases, not knowing has left you mute. So here’s your list, and if you don’t know what to say, call us to help.

First, communicate with your team members to let them know you have a plan for what to do if and when something happens to you and let them know the plan!  Then, communicate with each of the people you’ve named in your plan so they know what to do if and when something happens to you.

If you do not yet have a plan to communicate, call us, we can help.

 Integrate the Younger Generation

In most cases, the key to a successful family business legacy is to involve the younger generation sooner than you think it’s necessary and beyond your comfort zone.

When you can involve the younger generation by inviting them into a conversation and connection about the business early on, in a way that has them feel appreciated, you’re on the path to creating something far more than what you have now.

Integrating the younger generation can be a challenge, if you do not know how to meet them where they are, so contact us for support when you are ready to do it.

It’s worth it to ensure that the hard work you have put in over the years to build your business will be there to support the people you love, rather than leaving them with more work to clean up the parts you weren’t willing to face.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. One of our primary services is a LIFT Start-Up Session,™ in which we guide you through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate.   Call us today to schedule a time to have a conversation!

 

 

 

 

Overcoming Small Business Challenges through Operational Strategies

As with so many things in life, some of the same qualities that help small businesses succeed, can also lead to their demise. Fortunately, much of that risk can be lessened through operational excellence.

For example, the owners and managers of small businesses often know each other before they go into business together. Sometimes, they’re even related. Preexisting relationships can help propel small businesses forward, especially when there are high levels of trust and competence.

Unfortunately, however, familiarity is sometimes accompanied by a lax attitude toward operational formalities. Owners and managers may skimp in critical areas such as:

  • Governing documents such as articles of incorporation, partnership agreements, and bylaws;
  • Solid or regular auditing and accounting practices; and
  • Shareholder meetings and minutes.

In worst-case scenarios, business and personal funds are commingled or used for improper purposes.

The good news is that if you are just starting out, it is easy to avoid all of these issues and the accompanying potential for lawsuits and tax problems. A Creative Business Lawyer® can provide trusted advice and help position a small business in the most favorable circumstances for that unique business.

Here are some examples of the services a trusted legal advisor can provide:

  • Assistance in identifying recordkeeping products and in establishing high quality recordkeeping practices;
  • Helping owners understand the potential consequences of a lack of proper documentation;
  • Ensuring that clients know the deadlines for business and tax filings; and
  • Explaining the importance of keeping personal and business finances separate.

Perhaps most importantly, a skilled business lawyer can help you structure your operational strategies properly. This can be invaluable in helping your business avoid pitfalls and liabilities along the path toward success. We like to begin with getting to know your whole business, not just the legal side; but, also truly understanding your revenue model, how it serves your life, your team and your clients. Then, we can advise you on the best strategies for a business that meets not just your business objectives, but serves your life as well.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you structure your operations for success. One of our primary services is a LIFT Start-Up Session,™ in which we guide you through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate.

4 Fatal Legal Mistakes Family Businesses Can Avoid With Planning

Anyone involved in a family business knows that working with family has its pleasures and its pitfalls –incurring these legal pitfalls can prove deadly to your family business, so here’s how to fix them:

  1. Mixing family & business finances. Unfortunately, we live in a litigious society, so as soon as your family business is up and running, it’s important to shelter your personal assets by forming a legal entity like a corporation or limited liability company, which will protect the personal assets of investors/owners (i.e., family members) from business liabilities.  Without that protection, everyone’s assets are vulnerable if something goes wrong with the business.
  1. No business license. Many businesses, even those that are home-based, require a local, state or federal license to operate.  Without, you can face stiff fines or even be shut down.  Your city hall or county government office can tell you what is necessary to operate your business legally in your area. Or, you can contact us for a LIFT Start Up Session.
  1. No agreements. Unless you want employment in your family business to be a birthright, you need to have employment (or Independent Contractor) agreements that spell out – in writing – what the expectations are for the job each family member is doing and how they will be compensated, as well as termination guidelines.  Because there will probably come a time when you will have to transition a relative out.  Having a written agreement on hand to refer back to can help keep things civil.
  1. No succession plan. You must start your business with the end in mind so you can ensure your business takes care of your family throughout all of your life’s stages, including retirement and beyond your life as well. And what happens if the person who started it all suddenly wants to cash out, falls ill or dies?  If you want your business to go on without you, a succession plan that spells out how this will be accomplished is crucial.

We can help you prepare for the sale of your small business and guide you through the steps to a successful sale. Whether you are new to entrepreneurship or already operating a business, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.

 

What Will Happen to Your Family Business When You Die?

Maybe you have dreamed of leaving the business you have built to your heirs, but if you do not have a buy-sell agreement, a business succession plan, a business transition plan or a business preservation plan in place, that dream may not be realized.

Any number of factors can work against your dreams if you have not planned ahead. The IRS could value your closely held business for more than it can be sold for, and your family will not be able to pay the taxes. If it is a partnership, the other partners may not be able to pay someone to replace you, or have the cash flow to buy your share of ownership from your heirs. That’s why it pays to plan for the unexpected.

Buy-Sell Agreements Provide Options

A properly drafted buy-sell agreement provides for numerous trigger points to ensure that when something happens — you or your partner dies, becomes disabled, gets divorced, or simply wants out – the remaining partner is able to purchase your shares of the business or that your shares can pass outright to your heirs.

A buy-sell agreement is a binding agreement that is put into place before you retire or die.  Depending on the needs of your business, the buy-sell agreement can be prepared to involve many forms of payment to the selling shareholder or estate.

For example, you can choose payment via one lump sum or payments made over time.  In addition, a life insurance policy can be procured to ensure the payments do not adversely impact company liquidity.

Family Business Succession Planning Issues

Family businesses can be complicated, especially if there are multiple generations or blended families involved.  Some key business succession planning issues for the family business include:

  • Transitioning to the next generation
  • Aligning the interests of all family members
  • Balancing the financial returns
  • Anticipating family disputes
  • Estate planning and inheritance issues

Studies show that only one-third of family businesses make a successful transition to the second generation.  Working with an experienced business planning attorney will help ensure that your business can thrive even after you are gone.

To learn more about maintaining business viability through skillful business planning, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.