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Is your small business ready for transition?
Whether your Texas business is just starting out or you have worked for decades to build a strong reputation in your industry, you likely have great plans for the future. Perhaps you have ideas for expansion, or you may simply want to establish a successful company that will support your family and provide something you can pass on to your children.
If creating a legacy from your business is in your plans, you should know that this does not happen automatically. In fact, it might behoove you to understand exactly what may happen to your small business if you should become incapacitated or pass away before you have a transition plan in place.
Don't leave a mess behind
A sole proprietorship is a business that has a single owner. You own your business and oversee its daily operations. You may have employees, but the ownership of the operation rests solely on your shoulders. In fact, in many respects, you are the business. If you should die, your business may die with you. If this is not your wish, it is not too early to take steps to protect the future of your company by creating a succession plan. Failing to do this may leave your loved ones with the following challenges:
Could your company benefit from a liability release form?
Owning and operating a business comes with many risks for being liable for certain outcomes. For instance, if a person participates in an activity on a company's premises and suffers injuries, the company could be liable for those injuries. Unfortunately, facing liability for such incidents could be detrimental to your company in various ways.
As a business owner, you undoubtedly know the importance of protecting your company as best as possible. If you know that certain elements of your business operations could put clients or customers at a certain amount of risk for harm in the event that something goes wrong, you may want to consider having a liability release form.
What is the purpose of this form?
In general terms, a release form indicates that a person using your company's product or service assumes the risk of injury and that your company's liability for any resulting injuries is limited. Having this form and having clients or customers sign it could help keep a company from facing lawsuits. However, that does not necessarily mean that one could never sue your company. If the injury-causing incident resulted from negligence or recklessness on the part of the company, a form may not protect you.
Having a client list is important to growing a business
Whether you have just started your business or have been in operation for years, you undoubtedly want to ensure that you provide a quality product or service. You understand that having happy clients and customers can ensure that your company sees further success in the future.
Building a customer or client base is an important aspect of running a business. Keeping up with these individuals through email or other forms of contact could provide you with useful information that you could use for a variety of purposes, including expanding your operations, ensuring customer satisfaction and providing new information to those who have already utilized your company.
Why stay on top of your client list?
Staying on top of your client and customer list can help you more than you initially realize. Some benefits of periodically reaching out to individuals on this contact list include the following:
Does your contract have all the right stuff?
You may think of your small business as something very personal to you. Your employees and customers are like family, and you enjoy the comfortable, informal relationships you have with them. However, business is business, and at the heart of many successful business deals is a solid contract.
While you may not be ready to ask your employees to sign a non-compete clause, you are losing some critical protections if you are not using contracts with your clients. A contract may not prevent a lawsuit, but a well-written agreement can provide you with solid ground on which to stand if a dispute should arise with one of your clients.
Contract terms
Contracts simply outline what each party expects from the other. Having these terms in writing and reviewing them with your customer before agreeing to work together gives both sides a chance to discuss, negotiate and fully understand what you promise to do. Some important elements of a contract include the following:
Is a merger or acquisition best for your company?
Like most business owners, you are probably always on the lookout for ways to improve or expand your company. No matter how long you have been in business, you understand that the world can move quickly around you, and standing still can mean becoming obsolete. This is what motivates you to keep current with the trends of your industry and stay alert for new opportunities.
If you have learned that the fate of another Texas business is on the line, you may wonder if this is the right opportunity for you. The other business may be struggling to remain solvent, seeking to sell or looking for a company to partner with, among other circumstances. It is possible that this could be just the chance for you to grow your business, but you must first gain as much information as possible about your options.
Understanding the difference
The two alternatives you may be considering are a merger or an acquisition. With a merger, you and the owner of the other company agree to join forces to form a completely new entity. You may change your name to combine the two business names, and you may work as a partner with the owner of the other business.
A small business and a startup are not the same
Wanting to start a business is an admirable goal. You likely already understand that you will have a lot of difficulties to face as you work to achieve this goal. Fortunately, having the right information about where to start could help you immensely.
As you think about your future company, you may want to decide whether you want to create a small business or a startup. This decision may seem unnecessary because you may have thought that a small business and a startup were the same, but that is not the case. Knowing the difference between the two could help you decide your business path.
Small business
If you want to start a small business, you likely need a business model that can help you run a company that will generate revenue immediately and that overall works for business operations. Generally, if you start a small business, you will have a few employees and conduct sales on a relatively small scale. You likely also do not desire to enter into a major market. Instead, you want to focus your business on a market that allows you to operate efficiently.
Are you considering using restricted stock for your company?
Running a company has its ups and downs. If you have recently gotten your company off the ground, you may not have garnered substantial success as of yet. However, you may have reached a number of important milestones and feel that your company is well on its way to making it big.
As your company grows and you bring in more parties, you may consider the use of stocks in your business. One area that you may have a particular interest in is the use of restricted stock. As a small company, restricted stock may prove more useful to your business.
Using restricted stock
When your company does not have much value, restricted stock can provide certain stipulations on the stocks that may better benefit the company than simply utilizing stock options. If your company does become considerably valuable later on, using restricted stock may not have the same benefits because, at this point, the restricted stock will likely have significant value as well, which could result in tax burdens on those who receive the stock.
Is a former employee stealing your clients and staff?
When a customer comes into a business and steals an item from the shelves, the business suffers a loss. A prudent business owner will take steps to prevent such theft and even to pursue restitution from someone who commits the offense. However, in some Texas businesses, there is a type of theft that may have an even more devastating effect on the business.
An ex-employee who steals clients and other employees can quickly send your business into a tailspin. You may find your production grinding to a halt while you try to fill vacancies on your staff, and your profits may plummet as your customers jump ship. Like the prudent store owner, there are steps you can take to prevent this type of theft and options for seeking justice.
How can a non-solicitation agreement protect you?
One of the most important contracts you may have as a business owner is your employment contract. Not only does this contract outline the expectations between you and your employee while the employee is associated with your company, but it can also include restrictions on what your employee can do after leaving the job. A common restriction in an employment contract is a non-solicitation agreement, which can offer you the following protections:
Protect your business in breach of contract matters
Contracts are useful way to protect the interests of your company. Unfortunately, however, other parties may deviate from the terms of the agreement or refuse to follow the terms of the contact. A breach of contract is more than just an inconvenience – it is a threat to the well-being of your Texas business.
It is in the interests of all business owners to understand how to proceed when contract matters do not go as planned. You have the right to take action, enforce the terms of the contract and seek a beneficial resolution to the matter. There are various remedies that may be available to you, including securing damages.
The next steps for your company
Businesses of all types use contracts for anything from sales to employee agreements. In the event you find your company involved in a dispute over a contract, it is prudent to seek a satisfactory conclusion in a timely manner. It may be possible to reach an out-of-court agreement, but often, it is necessary to take legal action to recover losses from any financial damage that occurred and compel the other party to fulfill the terms of the agreement.
Are you ready to create a buy-sell agreement?
Owning a business means understanding that you will not always be around to run the company. The time may come when you choose to retire, or you may suffer from a disabling event in the future or pass away, any of which will make it impossible for you to continue owning and operating the company.
Because such possibilities exist, having a buy-sell agreement in place could greatly benefit your business. This document would allow you to have arrangements in place for the continuation of the business in the event of your retirement, disability, passing or other event that prevents you from moving forward with the company.
The buying parties
When it comes to buy-sell agreements, business owners typically utilize one of four types of arrangements. Those agreements include the following:
- Selling the company to the company itself
- Selling the company to an outside third party
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508 N Ridgeway Dr., Cleburne, TX 76033|
817-645-1717
