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Business Happens
Starting a New Business? Start Here.
The Great Recession had one bright side. It made lots of people think about starting their own businesses – or, at the very least, a small side business.
But here’s a sobering statistic to ponder: More than 50% of new businesses fail within the first five years. Clearly, it’s not enough to have a great idea and a boatload of enthusiasm. You need a solid plan, too. Mitchell D. Weiss can help.
A banking executive, entrepreneur, college professor and author, Mitch shares his experience and knowledge in Business Happens — a straightforward guide to launching a new business or professional practice.
He’ll guide you every step of the way – from writing a business plan to choosing the right legal structure, tracking financial performance, borrowing money and managing growth-because the goal is to create a business that will stand the test of time.
Written in plain English by someone who’s had a successful career financing all types companies and professional practices, Business Happens will help you to turn your own great idea into a success story.
Table of Contents
Why the Big Deal about Small Business
- Have You Thought It Through?
- Do You Have What It Takes?
- Do You Understand the Risks?
- Do You Know Your Responsibilities?
- Do You Have an Idea That Can Stand up to Pen and Paper?
- For Your Consideration
- Topical Readings and Resources
Organizing and Managing the Enterprise
- Choosing the Right Advisors
- Choosing an Appropriate Legal Structure
- Sole Proprietorship
- Partnership
- C-Corporation/S-Corporation
- Limited Liability Company/Limited liability Partnership
- Ownership Interest and Incentives
- The Size of the Pool
- How the Shares Will Be Allocated
- Triggers and Transferability
- Managing the Finances
- Accrual versus Cash Accounting
- Financial Statements
- Balance Sheet
- Income Statement
- Statement of Cash flows
- Statement of Shareholders’ Equity
- Analyzing the Data
- Cash Conversion Cycle
- Liquidity Ratios
- Leverage Ratios
- Profitability and Efficiency Ratios
- Financial Planning
- Managing the Risks
- Determining the Likelihood and Estimating the Costs
- Developing Policies and Procedures
- Protecting Intellectual Property
- Managing Employee-Benefits Programs
- Organization Design and Process Management
- Social Networking
- For Your Consideration
- Topical Readings and Resources
Debt, Equity and Coping with Financial Adversity
- Raising Debt Capital
- The Underwriting Process
- Whether to Make the Loan: the 5 Cs of Credit
- How Much to Lend
- How Much to Charge
- What Terms and Conditions to Require
- Personal Guarantees
- Additional Collateral
- Cross-Collateralization/Cross-Default
- Affirmative Covenants
- Restrictive Covenants
- Material Adverse Change
- Representations and Warranties
- Events of Default
- Indemnification
- Prepayments
- Assignment
- Preparing to Borrow
- Purpose and Justification
- Identifying Leverageable Assets
- Different Borrowing Needs and Different Borrowing Alternatives
- Small business Administration Programs
- MicroLoan
- 7(a) loan
- CDC/504
- Disaster-Assistance Loan
- Industrial-Revenue Bonds
- Bank and Nonbank Lending Institutions
- Small business Administration Programs
- Financing products
- Lines of Credit
- Asset-Based Lending
- Term Loans
- Commercial and Industrial Real Estate Financing
- Leasing
- Vendor Financing
- Credit Card Financing
- Peer-to-Peer Financing
- Transaction-Structuring Considerations
- Simple versus Compound Interest
- Fixed versus Variable Rates
- Interest Rates versus Annual Percentage Rates
- Even-Principal Reduction versus Mortgage-Style Amortization
- Level Payments versus Uneven Revenue Streams
- Financing Term versus Asset Useful Life
- Responding to the Four Decisions Every Lender Makes
- The Underwriting Process
- Raising Equity Capital
- Debt, Equity and Dilution
- Who and Why
- Company Structure
- Valuation
- Subordinations and Disentanglements
- Debt, Equity and Dilution
- Coping with Financial Adversity
- Under the Microscope
- Self-Directed Restructures
- Operational Restructure
- Financial Restructure
- Asset Restructure
- Forbearances and Modifications
- Payment Moratoriums
- Interest-Only Payments
- Abatements
- Negotiating Tactics
- Bankruptcy
- Chapter 11
- Chapter 7
- For your Consideration
- Topical Readings and Resources
Buying, Selling and Calling It Quits
- Mergers and Acquisitions
- The Difference between a Merger and an Acquisition
- Valuation Methodologies
- Payments and Protections
- Graceful Exits
- Succession Planning
- Establishing and Prioritizing Goals
- Orderly Transitions
- Orderly Liquidation
- Final Notes
- For Your Consideration
- Topical Readings and Resources