Business Planning

Why, how and when to change your business’ DNA

May 9, 2019 by Jim Blasingame

In nature, all life comes in two forms: plant and animal.

In the marketplace, all business entities are found in two forms: human and non-human. But unlike plants and animals, a human business can morph into a non-human entity.

A human business is a sole proprietorship or a partnership. Of the non-human species, there are three: C Corporation, Subchapter S Corporation (aka, Sub S, or S Corp) and the Limited Liability Company (LLC). All corporations begin as a C, and some, typically small businesses, “elect” to morph into the Sub S structure for reasons revealed in a minute. The LLC is the new kid on the block, only being available for about the past 30 years. It can be a very handy legal structure, but not for everyone.

So why should your human business morph to non-human? There are at least three excellent reasons:

[Continue Reading]

What is your small business exit strategy?

July 29, 2018 by Jim Blasingame

In the United States, it’s very easy to start a small business. Maybe too easy.

If you remember those early startup days, then you’ll also remember that very soon the easy part ended. Indeed, from the moment you transitioned from your initial capital to needing to generate the Holy Grail of capital – profit from sales to customers – things started getting really hard. And over the next few years, maybe decades, if running and growing your business ever got a little easier, it was only because you figured out how to do it without killing yourself.

Then, one year you started tinkering with the idea of, you know, actually leaving your baby. Tossing the keys to someone else and riding off into the sunset. You know – retiring. And the more serious you got about the idea, the more you realized you were entering another phase of business ownership that’s also really hard – selling a business.

[Continue Reading]

Four business buying factors to keep in mind

May 6, 2018 by Jim Blasingame

Continuing my series on buying a business, here are summaries of four critical factors to consider when acquiring a small business.

Old sellers are the best sellers

One of the best opportunities to acquire an existing business is when you can buy one from an owner who wants to retire from a business that’s still viable. Two good reasons are: They’re less likely to change their mind before the transaction is complete, and they’re more likely to finance a larger part of the sale price to get monthly income.

Notice I said, “still viable.” Sometimes the end of the current owner’s career coincides with the end of the life of the business. Don’t buy a business that should retire with its owner.

[Continue Reading]

Buying a business? Consider these principles first

April 29, 2018 by Jim Blasingame

Recently I wrote an article on how to “Buy Your American Dream” by buying a business from someone else. Let’s continue that theme with a few more principles to employ when considering this ownership option. Thanks to my friend, Russell Brown, and his book, “Laws of the Business Buying and Selling Jungle” for the inspiration.

Buyer beware – of himself.

In the securities industry, full disclosure is the coin of the realm. But in the marketplace, caveat emptor – let the buyer beware – is the fair warning standard. If a seller misleads or misrepresents something, legal redress may be available. But business purchases that don’t work out are born more from inept buyers than from seller malfeasance.

[Continue Reading]

How to get success to come and play in your backyard

January 14, 2018 by Jim Blasingame

This is a “How to get your business off to a good start in the New Year” column, without any resolutions. You’re welcome.

It’s about fundamentals that have served businesses since proto-market was born, when Og dropped his club and suggested to Gog that they do business instead of killing each other for what they wanted. If you’ll find a way to incorporate these ten fundamentals into your daily/weekly/monthly management practices this year you’ll have more fun because success will come and play in your backyard. If you don’t, well, you know.

1. You must produce and manage with regular and accurate financial statements: profit and loss (a/k/a P&L, a/k/ an operating statement) and balance sheet. In business, you can’t get where you want to go if you don’t know where you’ve been.

[Continue Reading]