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
  • 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
• Raising Equity Capital
  • Debt, Equity and Dilution
    • Who and Why
    • Company Structure
    • Valuation
    • Subordinations and Disentanglements
• 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

Epilogue: From One CEO to Another