This article addresses some of the pros and cons of different types of legal structures for businesses. Even if your business has been in existence for a while, it may be time to review your options. There can be many complexities in determining the best legal structure and a qualified attorney may be of value when evaluating your choices.

At a minimum, consider the following issues when evaluating the business structure decision:

• Number of owners
• Personal liability of owners
• Tax treatment
• Control and management
• Capital contributions

Here is a chart that provides some of the basic information to consider.

Revisit your budget. The government’s most recent survey on the Consumer Price Index showed that an increase of 5.6% in the past year. Now is a great time to review your budgeted costs to ensure that they are on par with today’s reality. For example, while gas prices have recently declined, August’s national average was still $.75 per gallon higher than it was in December 2007, according to Consumer Reports.org. If you find that you have underestimated your expenses, be prepared to temporarily trim some non-essential items from your budget.

Review your accounts receivable. While profits may still be healthy, the success of your business relies heavily on having enough cash to pay your bills on time, especially now that creditors are tightening up on their lending practices. Keep a close eye on your accounts receivable aging list, and call to check on outstanding payments on a regular basis. Not only will this “remind” your customers to pay their bills in a timely manner, but will also help you gauge whether or not you can afford to keep providing the slow payers with your products or services.

Secure your lending relationships. Make it a priority to meet with the business services consultant at your financial institution. While credit is still available for small business owners, you’re going to have to work harder for it now than in previous years. You want to do everything you can to show that you are determined to be a good borrower and are a low risk for default. In preparation for your meeting, make sure your financials are clean and up-to-date. Think of it in terms of a job interview: with limited funds available for lending, you want to stand out as the most qualified applicant.

How are you surviving the current economy? Let us know if you’ve found success with any of these tips, or have others you’d like to share.

Smart startups can benefit greatly from social networking. A business that has, for example, a well-received product on social networks can ascend in the ranks while larger companies, which may have bigger marketing budgets but subpar products, can easily sink.

Social networking can also help you build a group of loyal customers, reconnect with valuable contacts, and become more interactive with your audience.

To maximize your social networking strategy, consider the following questions:

1. Do you know your audience? Would they use sites like Facebook or Linkedin?
2. Will such sites help or hinder your business’ credibility?
3. Will it provide value to your business?

If the answer to all three questions is yes, then your business can’t go wrong by joining Facebook, or connecting with people on Linkedin. If, however, your demographic is older or not quite as online savvy, then you should focus your marketing efforts and money elsewhere before wasting your time online.

Two more words of caution about social networking sites: Be sure to use these sites as a way to create connections and build relationships. Many businesses slap a profile online without really utilizing it. In my opinion, Linkedin does a more effective job at business networking than Facebook or any other site.

Finally, before you join a site, learn the rules of online etiquette. The biggest mistake businesses make is that they get online and try to sell, sell, sell. Instead of pitching, you should be engaging your audience.

Whatever you decide, happy networking! We’d love to hear about your experiences.

If you are a small business owner the answer is: a tremendously positive one!

Now, let’s be realistic. Chances are that maintaining, even growing, your small business during a recession won’t be easy, and you’ll have to do some “belt-tightening”. But you’ll be surprised at the unforeseen benefits such an exercise can produce. Here are a few suggestions to get you started:

• Institute an internship program: Beyond the obvious payroll savings, you’ll find an enthusiastic work force dedicated to learning. This type of program not only offers you great resources for talent but can also provide you with valuable lessons in managing a more sizeable staff. You can solicit interns via job search websites such as CareerBuilder.com or Monster.com, or even post an ad at the local college.
• Give discounts: You could increase your sales, customer loyalty and become a champion in your community by rewarding neighborhood or long-standing customers.
• Negotiate with your vendors: Ask for an extension of credit, or offer to pay in full up-front for a discounted rate. You may end up exchanging products and services: the classic “win-win” scenario.
• Don’t eliminate your marketing budget; instead, go local. Contact your neighborhood newspaper or cable provider and ask about their advertising plans.

Small businesses, those with annual revenues under $1 million, represent approximately 15% of the US market. The ones that thrive, particularly in difficult times, often do so because they trade standard conventional practices for more innovative ones. This “out of the box” thinking contributes significantly to our economic growth.

In essence, if you play your cards right, this could be your time to shine. So be inspired.

When you have a business, even a small home business, it should be separate your personal accounts for the following reasons:

1. Record Keeping: especially during tax time. You will be able to see how profitable the business is. I let the member know that I have worked with businesses that were losing money and did not know it until they isolated the account. Your accountant or whoever is doing your year end and/or quarterly tax returns will also love you.
2. Budgeting: once you can see the income and expenses of the business you can plan for major purchases and pay yourself a salary.
3. Professionalism: your Business check card, credit card, and checks will have your business name printed on them just like the big companies—giving you additional marketing exposure at no additional cost. You can accept credit cards for payment of services with a merchant services solution thereby reducing the time it takes to receive payment.
4. Higher limits: Business credit cards, lines of credit and check cards usually have higher limits for cash flow purposes.
5. Growth: if your company grows over time, you may need to add employees. This will require you to issue payroll checks, keep records of those checks, etc. Financial institutions usually provide a solution for your payroll needs through a business account.

The member has set up an appointment with me to talk about the details of his specific situation. Ensure that you too are using your resources to make informed decisions about your current and future business needs.