by eclewis | Dec 11, 2012 | Business News
This month’s series of blog posts are focused on preparing for the new year. Last week, we discussed business plans and why they are important. Today, we are going to shift focus and talk about your business’s lease. As the new year approaches, it is a great time to review a document that you may not have looked at for a few years. Depending on your current situation, it may be a good time to negotiate a lower price, ensure that you are paying the right CAM charges, or make sure that you have sent in your renewal notice if it is due.
So when reviewing your lease, what should you be looking for? If you are in a space that you hate or you think you are paying too much for, you may want to look at the lease to see if you can either get out of it or negotiate an early termination. Reasons for early termination may include failure to calculate CAM charges correctly, failure of the landlord to keep the property to minimum standards, and other terms present in your lease. As leases vary greatly, you will have to look at your lease to find out if there is anyway to get out of it specifically. If there is not a way to get out of it and you are struggling financially, you may be able to negotiate lower rent or an early termination for a fee. Again, this varies on many facts so you may be in a situation you cannot get out of.
If you love the space you are in and think that your base rent is about market value or if you are in a situation and cannot negotiate an early termination or reduced rate, you still want to review your CAM and other charges above the base rent if you are responsible for them. In some cases, you may be paying more than you should for things such as water, electricity, insurance, and common area maintenance charges. If you have not had an accounting recently, you should request a written accounting. If you have had an accounting, you will want to review it to make sure you are actually paying what you should. If you are being overcharged, you need to talk to your landlord to rectify the situation.
Lastly, many leases include rights of renewal if you negotiated it when you signed the lease. These rights of renewal many times include specific time frames that you need to comply with to excise your right to renew. If you have a space that you love, one that you put a lot of money into, or one that meets your current needs and you want to stay in, make sure that you know when you need to inform the landlord that you are renewing. If it is in the next few months, you may want to have the renewal notice ready to go. Either way, you want to make sure your calendar is marked with the date you need to send it in so you don’t miss the deadline.
If you have any questions about leases, your rights and obligations under your lease, or any other business needs, please feel free to call me, your Denver small business lawyer, today at 720-258-6647!
by eclewis | Dec 4, 2012 | Business News
The New Year is only five weeks away! Today is a great day to review your business plan for 2013. And if you don’t have a business plan, today is a great day to start one. So, why is a written business plan important? And, what are the essential areas that you should make sure are in your business plan?
Written business plans are good because they give you, the owner of a small business, the chance to sit down and really think about your business. When writing a business plan, you have to think about a lot of areas of your business. What kind of growth plan do you have in mind? What kind of financials do you currently have? Are you going to need loans or other capital infusions? Are you going to be moving into a new space? Hiring employees? Where has your business come from? Have you met your financial and other goals since you have started? If not, why not? All of these are important questions to ask and answer. When you sit down for a few hours to focus on your business plan, you can take the time to invest in your business to make sure it gets to where you want it to be.
When you are preparing a business plan, you don’t need to pay someone thousands of dollars to help you. You can start with the business plan available on SCORE’s website and get the basics. Even if you are looking for financing and need a more formal business plan in order to secure money, you can find many free or low cost resources to help. If you need any, please call or email me.
The essential parts of a business plan will be your vision for the business, financial status, your marketing plan, and your goals for the future. Your vision statement will include what your business does, who your target customer is, and how you are a different from the competition. If you have been in business for several years, you may have a clear idea of this. If you are new to business, you can take time to determine how you are going to position yourself.
Your financial status will include your past information (if in business) and your future projections. Again, if you are currently in business, doing this may be easier than if you are just starting. Either way, you want to make sure you have three different scenarios you are working with – best case, worst case, and most realistic. Your best case, while still being in the realm of realistic possibilities, should forecast your sales if everything goes according to plan. While this rarely happens, it gives you a goal to shoot for. Your most realistic plan should account for some issues coming up such as bad weather during busy sales times leading to lower sales, issues with employees, higher than anticipated expenses, and other issues. This lets you know what is a realistic financial goal for you to reach. Finally, and hopefully this will not happen to you, you will want to plan for the worst. What are your financials going to be if everything goes wrong? How are you going to cope with this situation? By being prepared, it helps ensure your business can overcome difficult times.
Your marketing plan can be an essential part of your business. In fact, some business schools are moving away from having a formal business plan writing requirement and going only to a marketing plan requirement. Marketing plans help you determine how you are going to find customers – something that is essential for every business from business attorneys like myself to plumbers to coffee shops. If you don’t have clients, you can’t make money (well, most of the time). You will want to plot out what you are going to do for both online and offline marketing and how you are going to get your services in front of those target markets listed in your vision statement.
Finally, you want to think about growth. Where do you want to be next year this time? Two years from now? Five? Ten? You have to plan on how you are going to reach this growth. Are you going to grow slowly for several years and try to grow larger later (for example, if, like me, you started a business when your kids where young and want to wait to expand with employees until they are in school)? Do you want to grow quickly and then scale back later (for example, if you are wanting to retire in 20 years, you may want to grow now and scale back to part time then)? Do you want to hire employees? Or think you will need to? All of these are things to be thinking about.
As you write your business plan, be thinking about the services you will need this upcoming year. Financial, legal and tax services can cost money and should be planned for. If you need any help with your legal services, or determining what services you should be planning for, make sure to call me, your small business attorney, at 720-258-6647 or email me today!
by eclewis | Nov 5, 2012 | Business News
Recently at Starbucks, I mentioned that I had a “Lucky Dozen” alert on my iPhone showing I had earned a free drink or food item. The barista looked at me and said that what sounded really good was Dunken Donuts. While my three pump, non-fat, Chai was being prepared (free of charge due to their rewards program), we talked about the upcoming Dunken Donuts return to Colorado. For those not in Colorado, we are a Dunken Donuts desert. While we had these mythical places in my youth, they have long since disappeared along out mountainous background to places like Florida, DC, and New York.
It is rumored (well mostly confirmed) that several will be opening up next year bringing back the donuts we remember from our youth. However, much like Ikea, Steak and Shake, and Krispy Kreme, rather than opening in Denver proper, it is reported that these donut havens will be opening in South Metro Denver in the lands of Lone Tree and Centennial. So why when Denver is the capital of the state, did Dunkin Donuts and others choose to open down south? Business friendly policies.
While Denver is known for many things – we have Mile High Stadium, downtown, and Coors Field – unfortunately, it isn’t known for being particularly business friendly. So what makes a city business friendly? Here are my top two things:
1. Business Friendly Tax and Licensing Policies. Tax and licensing policies can make all the difference between a city being easy to work with and not being easy to work with. In business friendly cities, tax and licensing policies make sense. To open a business, the business owner doesn’t need to worry about filing tons of forms or worry about complying with taxes, rules and regulations to open a standard business (one look on Denver’s business page and you can find that businesses from a-z are regulated). Business owners need to worry about running their business.
2. Business Friendly Transportation. If you want to locate your business downtown, you have to worry about parking for employees. There are more options for public transportation, but there are only about 83,000 rides taken on pubic transportation each year in the Denver Metro Area – showing that most people still drive. If you are located in South Denver, parking comes with the buildings in most cases. There are no additional fees and less gridlock.
Whenever I work with clients, one of the first questions I ask is where the business is going to be located. When you are thinking of where to locate your business, consider the following:
1. Do you employees or clients need access to easy parking?
2. How many taxes will you need to pay?
3. What are the licensing fees?
4. What are the regulations for your business type?
5. Are your employees going to live in the same city where you are located?
6. Are there tax breaks for the city you are looking at?
7. Does the city tend to have business friendly policies?
8. Are other businesses moving into the city or away from it?
9. Are there other cities nearby that have better policies?
Where your business is located can have a huge impact on the bottom line of the business (and sanity of the owner).
by eclewis | Oct 17, 2012 | Business News
According to the Denver Business Journal, small business hiring in Colorado was only up 0.15 percent in August. This is lower than the national average of 0.16 percent, however only slightly slower. In addition, the number of online ads for jobs also fell in August to only 4,700 jobs being posted.
So what accounts for the fall in the number of new hires and jobs being posted? The number one cause seems to be uncertainty in the economic climate. US economic growth is still lower than it has been in years and companies are leery of hiring when they don’t know whether they can support the position for the long term. The few areas that seem to not be suffering are technology and other professional level positions.
Which leads to the second reason for lower growth: companies are having a hard time finding employees that can do the jobs they needs. Companies are looking to hire those with backgrounds in STEM fields (science, technology, engineering, and math). As the number of people with this backgrounds increases in other countries, companies are going to these countries for a steady educated workforce.
And finally, even those companies that can hire are waiting to see what regulations are going to be at the beginning of the year. Recent reports show that many companies are hesitant to hire when it will bring them to the point that they need to comply with federal regulations like the Affordable Health Care Act.
So what do you do if you are a company that needs, or even wants, to hire someone? An HR consultant can help you draft the job description and create employment packages to retain the best people. In addition, speaking to your small business attorney and your CPA can make sure that you aren’t incurring legal or tax obligations that you can’t handle.
If you are looking to hire and want to make sure you are doing everything right, please schedule an appointment today!
by eclewis | Oct 10, 2012 | Business News
As mentioned on Facebook, I recently attended a seminar on the Patient Protection and Affordable Care Act (PPACA) and how it affects businesses. While the seminar offered information on businesses of all sizes, this post will deal primarily with small businesses.
PPACA was signed into law in March 23, 2010. It has multiple provisions that are phased in beginning in immediately until 2020. Immediately after passage, multiple groups began attempts to fight the legislation, including through the court system. At this time, the results of some of these attempts have made it through levels of the court system, including the National Federation of Independent Business v. Sebelius, which was heard by the United States Supreme Court and decided in June of 2012.
PPACA breaks companies up into three main categories. The first is self-employed individuals – those who are self-employed and have no employees. The second is small businesses – businesses with less than 50 full time employees. The third is large businesses – businesses with 50 or more full time employees.
Self-employed individuals have two options for health insurance under the law. Regarding insurance, self-employed individuals can buy either small business plans or individual plans depending on what is offered in the state. Self-employed individuals can also choose to be uninsured and pay a tax for failure to purchase insurance.
Small businesses are not required to provide health insurance for their employees. In some instances, small businesses can get tax credits if they choose to purchase insurance for their employees. Starting in 2014, small businesses can also purchase plans for their businesses through insurance exchanges, with the idea that the plans will be similar in costs to group plans offered by large employers. (Of course, this is in theory as exchanges are not currently up and running.) However, if a small business crosses from being a small business to a large business (hiring that 51st person), then new regulations come into play, including requiring the business to offer health insurance or pay large fines.
So, where does this leave the small business? Small businesses that didn’t have any insurance advisor now need someone in their rolodex (or the more 21st century version address book online). Prior to bringing on any new employees, and especially one that will increase the number employed by a business to 51 (which may include owners in some instances), small business owners must talk to their insurance agent and CPA to determine if PPACA makes hiring someone else a small financial burden or a huge one.
If you have questions about PPACA or need a referral to an insurance agent that works with small businesses, contact me, Elizabeth Lewis, your small business lawyer, today at 720-258-6647 or by email at Elizabeth.Lewis@eclewis.com.
by eclewis | Aug 14, 2012 | Business News, Misc. Legal Tidbits
thedenverchannel.com recently reported that only 5% of lenders have eased their standards to loan to small businesses. This confirms what many small businesses already know – it is tough to get funding. So what is a small business to do when it needs money?
If your business needs a loan to survive, there are several things that you should do as a small business owner first. While these strategies cannot guarantee a loan, they can help you have the best chance to secure funding when you need it.
1. Get your personal credit in order. If you are borrowing money from a financial institution, the institution is going to want to see your personal credit unless your business has substantial assets and financial backing. In most cases, you will need to personally guarantee the loan. If your credit score is low, you have had recent bankruptcies, or you are requesting a large loan amount and have no collateral, you may need to look at other funding sources.
2. Have a good business plan. Banks want to know you have thought about your business. The lending officer will want to see the business plan and know that the financial targets are achievable. As part of the business plan, be able to clearly define where the funds will be used. If you can’t explain your business and its goals (and why you have), a bank can’t determine what type of risk you are.
3. Have good tax and legal records. Make sure you have copies of your Articles filed with the Secretary of State and any periodic reports (and make sure your periodic report has been filed!). Have current bylaws or an operating agreement. Have proper paperwork between the owners of the business. Have intellectual property agreements when needed. Have copies of the business’s tax returns for at least the previous three years (and maybe up to five). If the business is closely held (especially with fewer than four owners), have copies of the owners’ personal tax returns. Make sure all local, state, and federal taxes are current – including employment taxes and unemployment insurance. Finally, do a checks to see if there are any liens or UCC filings.
4. Lastly, schedule a small business checkup with your attorney and your CPA. I can go through all your paperwork and see what is missing from a legal perspective, make sure everything is up to date, and then be a reference for the bank to call with any questions. A CPA would be able to do the same thing from a financial perspective.
If you have any questions, don’t hesitate to call me, your small business attorney serving the Denver Metro Area, the Front Range, and beyond at 720-258-6647.
