Choosing the Right Person for a Business Partner

partner, Wheaton business law attorneyIf you are starting a new business or thinking about a potential deal that could have a dramatic impact on your existing company, it is critical to choose your partners carefully. Selecting the right partner is especially important if your business is still in its infancy.

Perhaps the best way to think of a business partnership is as similar to marriage: the two of you are uniting your interests and efforts with the idea of building something that will be successful. The comparison to a marriage is even more appropriate when you consider that you will probably be spending more time with your business partner than you do with your spouse. An experienced business lawyer can assist you in selecting the right partner for your new enterprise.

Do You Need a Partner?

The first thing that you should consider when looking for a business partner is whether you even need a partner or not. To determine your needs, you should carefully analyze your business plan, your finances, and the current state of the market. In a partnership, both—or all, as the case may be—partners must take on certain risks and work with very little financial return for a period. Depending on your situation, it may be possible for you to stay in that role by yourself and to hire an employee that you trust but who is not invested financially in the company.

What Will Your Partner Do?

Before you select a partner, you should have a solid idea of what you need from him or her. If you only need capital and investors are not a viable option, you might wish to take on a silent financial partner. Conversely, you might need a great deal of assistance with certain parts of your company. If you have good sales and marketing skills, for example, your business may need someone with a more technical background to focus on product development.

It is also helpful to understand the level of personal investment that you expect from your partner. You may be fine with working 16-hour days, but will you want your partner to do the same? It is patently unfair to surprise your partner with your expectations only after you have signed a partnership agreement. Your attorney can work with you in identifying your needs and expectations for your ideal partner. From there, you can start your search for someone who fits the bill.

Compromise May Be Necessary

While you should develop an idea of what your perfect partner would be, keep in mind that you might never find a person who checks all of the boxes on your list. For example, you might find someone whose skills complement your own almost perfectly but who cannot commit to working long hours every week. In such a case, you might need to compromise on some of your expectations. With the help of your attorney, you can customize the compensation and risk structure of your partnership to account for your compromises.

Call a Wheaton Business Lawyer for Help

If you are considering a new partnership, an experienced DuPage County business law attorney can help you address all of the important details. Call Stock, Carlson, Oldfield & McGrath LLC at 630-665-2500 today for a confidential consultation.

Sources:

https://www.inc.com/minda-zetlin/how-to-tell-if-youve-found-the-right-business-partner.html

https://www.entrepreneur.com/slideshow/300168

Examining the Different Types of Business Mergers and Acquisitions

DuPage County mergers and acquisitions lawyerMergers and acquisitions are highly misunderstood legal terms, and are often considered to be synonymous among small business owners and the general population. However, there are some distinct differences between the two; understanding them and how they change the dynamics of a business transaction can be critical for ensuring a company’s future success.

Mergers

A merger is a business transaction in which two companies join together to form one company. Many times, one of the two companies ceases to exist. One example is the2007 merger between Digital Computers and Compaq in which Digital Computers was absorbed by Compaq.

Yet, not all mergers are the same. Instead, there are five types of mergers, all of which are listed and described below:

  • Horizontal merger. This involves two companies in direct competition with one another, both in market and product line.
  • Vertical merger. This is an agreement between two companies in a similar industry, but different type of business. An example would be a merger between a framing company and a drywall company.
  • Market-extension merger. An agreement between companies in different markets but with similar products.
  • Product-extension merger. An agreement between companies in similar markets that sell distinct products.
  • Conglomerate merger. Two companies with seemingly nothing in common merge. An example would be an electronics company merging with a company that sells car parts.

Acqusitions

An acquisition is a business transaction in which one company purchases another company. The latter of ceases to exist. In this scenario, the buyers take over the operations and decision-making of the purchased company. Many times, acquisitions have negative connotations, while mergers are viewed in a positive light. Whatever the case may be, it’s important to know that there are three main acquisitions

  • Strategic Remix acquisition. This is an agreement in which the acquired asset, including operations and product line, are combined with an existing business to increase profit.
  • Private Equity acquisition. This is when a company buys another business at a cheap price, pumps it full of resources, and then sells it at a higher cost.
  • Alphabet acquisition. An agreement between two companies that is a hybrid of the other two types of acquisitions. When this happens, the buyers take on the operations and product line of the acquired company with the intention of waiting to see how the acquired company does. If they improve, the buyers have the choice to sell or pump in more resources and potentially keep running the company for their own profit.

If you are looking to enter the world of mergers and acquisitions, contact Stock, Carlson, Oldfield & McGrath, LLC. Backed by more than 40 years of legal and business experience, our Wheaton small business attorneys can help you make informed decisions about your organization’s future. As a small business ourselves, our legal team knows how important a transaction like this can be for your business’ future. Call 630-665-2500 to schedule a consultation with our office today.

Sources:

https://www.investopedia.com/terms/m/mergersandacquisitions.asp

https://www.investopedia.com/terms/m/mergersandacquisitions.asp

https://www.investopedia.com/terms/m/mergersandacquisitions.asp

 

Establishing a Business in Illinois – What Entrepreneurs and Small Business Owners Need to Know

Wheaton small business attorneysFew things in life are as satisfying as running your own company and being your own boss, but such a privilege requires a lot of hard work and dedication. There are also multiple steps – some strategic, some legal – to starting your own company. Learn more about establishing a business in Illinois, discover what resources are available to you, and obtain detailed information on how a seasoned business law attorney can ease the process and help to ensure your business is protected in the years to come. 

Preparing for Business – The Initial Steps

Ideally, business owners would start preparing for business long before they plan to open their doors. They would have a complete a market analysis and have an in-depth business plan, and they would have already started to engage with people on social media to ensure they have a solid customer base before opening their doors for business.The world is not perfect, however, and sometimes business owners jump in, head-first, without really knowing what it takes to be successful in today’s digital world.

Thankfully, even if this occurs, there are ways to recover. There are also numerous resources at the business owner’s disposal, such as the Small Business Association (SBA), which offers detailed information on how to create a business plan. Entrepreneurs can also outsource some of the work, like social media engagement and website creation, to ensure they have more time to focus on other tasks, such as:

  • Conducting a market analysis;
  • Choosing and protecting your business name;
  • Developing a marketing plan;
  • Finding financing for your business;
  • Opening a bank account;
  • Hiring your first employees (if applicable);
  • Choosing a location for your business; and
  • Speaking with an attorney to ensure all the legalities of opening a business are covered.

The Legal Aspects of Opening a Business 

In addition to ensuring that your business has a solid customer base, creating a marketing plan, and setting up the company’s financials, business owners must comply with state and federal laws, including those relating to taxes and employment. These laws require that entrepreneurs: 

  • Decide on and create a business entity;
  • Register the business name;
  • Obtain a federal employment identification number, or EIN, (if applicable);
  • Register for local and state taxes;
  • Obtain any required business licenses or permits; and
  • Ensuring you meet all state and federal employment laws (if applicable).

Many of these aspects of opening a business contain multiple steps and complex processes. To reduce the chances of a mistake or missed element, business owners can seek the aid of a seasoned and competent business law attorney. 

Contact Our Wheaton Small Business Lawyers

As a small business ourselves, Stock, Carlson, Oldfield & McGrath, LLC understands the challenges and obstacles that entrepreneurs face when opening their own businesses. We aid in all ways possible, and we can even help protect your business from litigation and other legal issues in the future. Schedule a personalized consultation with our DuPage County small business attorneys to get started. Call 630-665-2500 today. 

Sources:

https://www.sba.gov/business-guide/

https://www2.illinois.gov/business/registration-licenses-permits