Questions to Ask Yourself Before Starting a Business

Wheaton business lawyerDo you work hard every day so that the owner of your company or its shareholders can make a few extra dollars? Would you not be happier if your hard work allowed more money to find its way into your pocket instead—and not just because you got paid for overtime? Nearly every person who has ever had a job has given at least some thought to owning a business someday, but only a select few ever take action on those thoughts and dreams.

If you have been thinking about starting a business, there are many things to consider. Some of them are more abstract in nature while others are more concrete and logistical. For example, you should be asking yourself:

What Would My Business Do?

It is impossible to own a business without something to sell. Some businesses sell products they make themselves. Some sell products that other companies make. Some businesses sell services like accounting and tax preparation instead of products. Once you decide what you want to sell, you will need to figure out what will make your customers choose your business. This will require research to determine what needs exist in the areas you wish to serve. If your idea is much like many other businesses that already operate in a particular area, you might want to reconsider your idea—or at least your intended location.

Are You Up to It?

Working for someone else is nothing like working for yourself, especially in the early years of your new venture. Nearly all small business owners spend the first few years working long days serving customers during business hours, then managing paperwork, compliance, and other details late into the night. If something were to go wrong, you are the one that would need to address it. Do you have the skills necessary to run your own company?

What About the Intangibles?

Running a business takes passion and determination in addition to skills and ability. If you continued to work for another person, you could essentially quit at any time and start looking for a new job. While your immediate situation might suffer, you always have that option. When you open your own business, you will not have the same luxury of such freedom to decide to pursue something else. Your team, your clients, and most likely, your creditors are counting you to be open for business.

You might have all of the necessary knowledge and skill, but your commitment is a vital part of the equation. Your business has no chance unless you dedicate yourself completely to its success. This means that if you are uncertain about opening a business, you might want to wait until you are certain.

A Wheaton Business Lawyer Can Help

As you go through the decision-making process, a qualified legal professional can provide trusted guidance and helpful advice. Contact an experienced DuPage County business law attorney for a confidential consultation by calling 630-665-2500 today.

Sources:

https://www.sba.gov/starting-business/how-start-business/20-questions-starting

https://www.thebalance.com/thinking-of-starting-a-small-business-2947258

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