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Buying a Business? Consider Getting an Attorney’s Help

Business litigation attorneyIt’s part of the DNA of any business: a desire to expand and take on new challenges. One time-honored way for a business to do that is to simply acquire another business. Or, rather, it may seem simple – but as with many transactions in the business world, there are complexities beneath the surface, and a smart business owner will not tread those waters alone. Know the Different Types of Business Purchases When structuring the sale and purchase of a business, there are two options: an asset purchase or a stock purchase. Both have advantages and disadvantages, and to make the right choice, you need to understand the implications of each type, including what is actually included in the sale under each structure and the tax implications of both. In an asset purchase, the buyer agrees to purchase certain assets from the seller, including things such as fixtures, equipment, licenses,…

Why Is a Business Succession Plan So Important?

Business Succession planning attorneysFor many entrepreneurs, the present day is challenging enough. Starting and managing the day-to-day affairs of a business is a massive effort that can leave even the cleverest owners with little energy left to think about tomorrow. But every small business, sooner or later, will face the reality that its leader won’t be around forever. Planning for what happens after a founder moves on can mean the difference between success or failure for the business. The Second Generation—and Beyond The statistics are inarguable: Family businesses are an enormous part of the American economic landscape. Research has shown that family businesses account for 64 percent of U.S. gross domestic product, generate 62 percent of the country’s employment, and account for 78 percent of all new job creation. But research has also shown that less than one-third of family businesses survive the transition from first- to second-generation ownership. Another 50 percent don’t survive the transition from…

New Insight for Women Entrepreneurs

New Insight for Women EntrepreneursIf you’re a woman thinking of starting your own business, you’re not alone. According to SCORE, a national nonprofit dedicated to helping small businesses, women-owned businesses currently make up 39 percent of the 28 million small businesses in the United States. And, SCORE notes, that number is rising. Between 2007 and 2016, the number of women-owned businesses rose 45 percent—five times the national average, according to the U.S. Census Bureau. SCORE recently released the results of a wide-ranging survey of more than 12,000 female entrepreneurs. The report, “The Megaphone of Main Street: Women’s Entrepreneurship,” contains several key insights on the unique opportunities and challenges these business owners face. Why did these women start their businesses? They reported many different motivations, such as open opportunities, family considerations, job changes, and financial necessity. One interesting detail is how the reasons differed for each age demographic. Most of the women surveyed under age…

Tax Tips for Small Businesses

Maryland Tax AttorneyDecember is just around the corner, so if you pay your taxes based on the calendar year, now’s the time to take a look at your income and expenses. Depending on your 2016 profits and your earnings projections for next year, you may want to make some adjustments before year-end. Cash vs. Accrual Accounting The type of accounting method you use may dictate your end-of-year tax strategy. Businesses use either cash or accrual accounting. With cash accounting, your income and expenses are not counted until actually paid. So, if you send someone an invoice in December and they don’t pay it until January, you wouldn’t claim that income on your 2016 tax return. Accrual accounting records transactions immediately – that December invoice would be considered part of your 2016 income, even before you receive payment. If you use accrual accounting and want to reduce your taxable income for 2016, you…

How to make an effective strategic business plan

Most business owners in Maryland understand that strategic business planning is key to a company's success. However, understanding its importance and actually executing a strategic business plan are two different things. When a business plan just sits on the shelf, it becomes nothing more than a static document. Strategic business plans often fail to create change in an organization because they do not contain clear directions. To be effective, a business plan should set the trajectory for a company by outlining specific goals and articulating clear vision statements. A solid plan for how to reach the specified goals and achieve the company's vision should also be included in the strategic business plan. It is important for all of the executives to understand a strategic business plan so that they can work to achieve the goals that have been set. If the plan is too complex or vague, it could end…

Why small businesses fail in Maryland

Studies show that around 80 percent of small businesses fail within the first 18 months of operation. This is generally not due to major and obvious mistakes or lack of effort on the part of owners. Instead, things like lack of marketing, poor customer service and a bad location can be all that it takes to keep a business from doing well. No matter how great a product or service is, if people aren't aware that it or the business that offers it exists, the business will struggle and likely fail. It's important for business owners to determine what the best methods of advertising their goods and services are and to make sure that they are making potential customers aware of their existence. Customer service is another common issue for small businesses. Part of the problem is that people now expect great customer service, so if a business isn't ensuring…

Creating an effective business plan in Maryland

It is recommended that Maryland residents who are starting a new venture create a comprehensive business plan that outlines how their company will be run. While a business plan is frequently an essential part of the success of a new enterprise, it's also essential that these plans are accurate. Failing to take into account for things like cash flow or not being specific enough can create problems for a start-up company. While many business plans put an emphasis on ensuring that the business is profitable, many neglect the issue of cash flow. Cash flow ensures that an organization is able to pay its bills, and a business can be profitable while being strapped for cash if clients are not paying their invoices on time. Another common issue with business plans is lack of specificity. Planning for growth without detailing exactly how much growth or what dollar amount of sales are…

Handling cash flow issues as a small business

Many small business owners struggle with cash flow issues. This can be a problem because a company might generate a good deal of business but be waiting on payment for its goods or services. In the meantime, bills come due and the business may be struggle with basic expenses regardless of the size of the future payout. Sometimes, a business owner may be able to forgo a salary for a few months until things even out. However, sometimes the cash flow problem is severe enough that this is insufficient. Obtaining a bank loan may take too much time, or the business owner might not have good enough credit to get the loan approved. The solution to cash flow problems is in part based on the source of the problem. To help avoid unpaid invoices, business owners may want to ask for a deposit up front. Customers can be encouraged to…

Projections are not always accurate

Many Maryland business owners seeking capital will create projections that are fairly optimistic, but they may start running into problems if they believe these projections are accurate. Projections designed to attract investors normally focus on large amounts of growth and immediate success. This impression of a business may be bolstered when a startup is doing very well initially. The problem is that projections for new businesses, particularly those less than three years old, are often inaccurate. High levels of growth are frequently unsustainable, but business owners may spend capital on the basis that their projections are accurate. This often results in companies having to start reducing their spending, and cuts may involve making staffing reductions. When news gets out that a business is having to make these types of cuts, it may reflect poorly on the organization, hampering its ability to grow. It may be a good idea for companies…

Small business disaster recovery plans

Small business owners in Maryland may want to consider developing a disaster recovery plan in case of an emergency. For a small company, the loss of productivity that could result from a broken server, a severed relationship with a supplier or damaged physical property could be devastating. A disaster recovery plan should be created that addresses the potential for both digital and physical losses. In most cases, much of the work that a small business does relies on technology and digital assets. The information that a company stores on one of its servers could be incredibly important to the way that the business is run. Therefore, a business owner should take vital steps to protect its servers. If preventative steps are taken, digital data recovery can be relatively simple and fast in the event that a server goes down. Even in the digital age, a small business may rely heavily…