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RDIA 2010 Annual Meeting Presentation by SCORE Las Vegas - Replanning Your Business.


1. After Start Up Replanning Your BusinessOctober, 2010Prepared for Real Diaper Business Seminars 2. Welcome Bob Cushman SCORE Business CounselorSCORE Southern Nevada Chapter 243 1 3. The Perks of the Small Business Owner: 4. The Perks of the Real Diaper Owner: 5. About SCORE National Association formed in 1964; now with over 12,000 volunteers in 360 + chapters providing 500,000 counseling hours annually SBA Resource Partner Non-profit all counselors donate their time so all consultations are free and confidentialSCORE Southern Nevada Chapter 243 4 6. About SCORE Largest business Consulting organization in the World Average Chapter provides free face-to-face counseling, free e-mail business counseling, and offers regular seminars Find the office nearest you at or use the site to find one of 1,100 online mentorsSCORE Southern Nevada Chapter 243 5 7. FIRST - do you need to re-organize Your Legal Business Structure?SCORE Southern Nevada Chapter 243 6 8. What are the Choices? Proprietorship Partnership Corporation Limited Liability CompanySCORE Southern Nevada Chapter 243 7 9. Proprietorship Advantages Easy to organize Less reporting One level of tax Disadvantages Unlimited personal liability Termination on death of owner Difficult to raise capitalSCORE Southern Nevada Chapter 243 8 10. PartnershipAdvantages Pooling of resources & talents State registration normally not requiredDisadvantages Unlimited personal liability Partner conflict Death of a partner causes dissolutionSCORE Southern Nevada Chapter 243 9 11. Limited Liability PartnershipAdvantages Pooling of resources & talents Limited personal liabilityDisadvantages Partner conflict Death of a partner causes dissolutionSCORE Southern Nevada Chapter 243 10 12. C-Corporation (Federal Registration) Advantages Limited liability of shareholders Survives shareholders Transfer of ownership Disadvantages More complex More reporting Possible double taxation SCORE Southern Nevada Chapter 243 11 13. S-Corporation (Federal Registration)Advantages Same as C-Corporation except one level of taxDisadvantages No double taxation but no retention of profits Generally only people can be owners Limited to one class of stock SCORE Southern Nevada Chapter 243 12 14. Limited Liability Company Advantages Flexible ownership and capital structure Limited personal liability Tax choices complex Losses may offset other income (new) Disadvantages No retention of profits Complex Operating Agreement SCORE Southern Nevada Chapter 243 13 15. But they dont stay the samePAUL D. GARNETT AND ALICIA GARNETT, Petitioners v.COMMISSIONER OF INTERNAL REVENUEFiled June 30, 2009.The Garnetts owned interests in L.L.P.s, L.L.C.s, andtenancies in common. The parties request a ruling asto whether their interests are subject to the rule ofsec. 469(h)(2), I.R.C., which treats losses from aninterest in a limited partnership as a limitedpartner as presumptively passive.Held: Because they did not hold their interests inthe L.L.P.s or L.L.C.s as limited partners, theseinterests are not subject to the rule of sec.469(h)(2), I.R.C. SCORE Southern Nevada Chapter 243 14 16. BUT THEY DONT STAY THE SAME The Small Business Jobs and Credit Act provides an opportunity to avoid taxes. Individuals who acquire stock in small businesses after October 1 pay NO capital gains if they hold the stock for more than five years. However, it only applies to C corporations and stock has to be acquired by January 1, 2011 so act fast.SCORE Southern Nevada Chapter 243 15 17. Practical Differences Proprietorship $14,000 13.3% Partnership $82,500 23.6% Corporation $28,600 17.5% S-Corp $51,200 26.9% Limited Liability CompanySCORE Southern Nevada Chapter 243 16 18. Outline of other considerations: 1. Government 2. Facility 3. Personnel 4. Legal 5. Accounting 6. Banking 7. Risk Management 8. Computer and Telephone 9. Public Relations 10. SuppliersSCORE Southern Nevada Chapter 243 17 19. Government Legal Structure of Business Government Relations New Hire advantages Independent ContractorsSCORE Southern Nevada Chapter 243 18 20. Facility (physical location) Stay at Location with rent reduction? Move to get lower rent? Lease Restrictions Build-out Allowances Signage Lease OptionsSCORE Southern Nevada Chapter 243 19 21. Facility (Internet Presence) Stay at One Website with upgrades? Move to Multiple Websites? Traffic studies (Alexa, etc.) SEO studies Content Restrictions CompetitorsSCORE Southern Nevada Chapter 243 20 22. Personnel Contracts and Agreements Leased Personnel Upgrading Job Descriptions Policy & Procedure Manuals Personnel Training Performance of the process Marketing and SalesSCORE Southern Nevada Chapter 243 21 23. Legal and Lawyers Business Structure Contracts, Guarantees and Agreements Intellectual Property Tax Law LeasesSCORE Southern Nevada Chapter 243 22 24. Accounting and CPAs CASH versus ACCRUAL Amortization & Depreciation Business Structure Tax changes Accounting system Bookkeeping Tax strategy/Return preparationSCORE Southern Nevada Chapter 243 23 25. Banking and Loan Officers Establish relationship with a Second Bank Payroll and Payroll Tax Account SBA approved program lender Preferred lender Credit Card processing Lines of CreditSCORE Southern Nevada Chapter 243 24 26. Risk Management and Insurance Premises - property and liability Directors & Officers Product Liability Errors and Omissions Contents - self and others Automotive Employee BondingSCORE Southern Nevada Chapter 243 25 27. Computers and Telephones Domain and Website Website Maintenance Backup Social Networking Phone Landlines Cell Phones and Smart Phones Answering SystemsSCORE Southern Nevada Chapter 243 26 28. Public and Press Relations Disposable Diaper problems Landfill problems Diaper Rash problems Social Networking Local Press Units of larger papersSCORE Southern Nevada Chapter 243 27 29. Suppliers NEW SUPPLIERS Credit terms/Discounts Assured prices Time line Business planSCORE Southern Nevada Chapter 243 28 30. A Resource to MOVE FORWARD A NEW BUSINESS PLANSCORE Southern Nevada Chapter 243 29 31. The Business Plan:Your Roadmap to Change Do I really need it? Do I really have to write it? 32. The Business Plan is a: Document that sells and explains Discussion of future plans Demonstration ofachievability Benchmark for measuring progressSCORE Southern Nevada Chapter 243 31