Important Business Formation Documents
Business Continuation Strategy Continuations strategies are a much-overlooked aspect that business owners must think about, especially if there is more than one principal owner of the business. Continuation strategies prepare for the unexpected personal circumstances that can seriously affect the business. This could include serious injury, illness, death or departure of a major partner in the company. By having a continuation strategy in place, it will clearly outline what guidelines are to be followed both financially and operationally with the company. If a principal dies or leaves the business, it will outline whether the affected party’s share in the company would transfer to another member, the ownership team or to another person outside of the corporate structure. This agreement should also outline how the duties of the departed principal would be redistributed within the operational activities of the company. This agreement between the ownership team gives the partners peace of mind that there is something in place to protect the owners financially in case the worst happens. Clearly documenting this information could help mitigate severe consequences. Buy-Sell Agreement A buy-sell arrangement is an important contract that much be signed by co-owners of a business that governs what happens if an owner dies or is otherwise forced to leave the company. This agreement would also document how proceedings would occur if an owner chooses to leave the business voluntarily. In most cases a buy-sell arrangement is backed by a life insurance policy covering all major principals of an organization. Buy-Sell Arrangements are a vital document within business development and should cover all situations that can occur, for assistance with these documents a professional business consultant should review the arrangements that you have...
Read MoreA Quick Look at Corporate Structuring
Corporate Structuring Defined: Corporate structuring is the management of recognizing the legal ownership and operational structure of a company. This structure is vital to the foundation of any company. This includes what type of incorporation is best for a business whether that be Limited Liability Corporation (LLC), an S Corporation, or C Corporation. In other cases the best structure will be that of Sole Proprietorship with a DBA or a General Parternship. The designation of S Corp over C Corp has very important tax consequences that must be considered prior to filing for S election. In the case of LLCs, included is the decision to be manager or member managed. There are different operational and tax advantages to all of these options and it is important to make the decision based on the independent needs of the business. This structure must be agreed upon by all incorporating officers or members and managers of the company and is a decision that should not be taken lightly. Also included in corporate structuring should be a detailed operational agreement between all of the principles of the company. This will secure a predetermined course of action for the business given any disagreement arises between officers or members. Corporate structuring can be done by the incorporating parties directly, but for situational advice and a “what if” perspective, it may be in the best interest to consult with a professional in order to structure the business. Should you have any further question or seek additional advice feel free to contact us....
Read MoreBipolar View of Business Development
Business Development Defined: Business development is the process of incorporating a number of techniques and responsibilities, which aim to attract new customers and penetrate existing markets. This includes everything from incorporation, business strategy, planning, projections, marketing, advertising, lead generation and fulfillment. Business development is for companies just starting as well as seasoned organizations. Although at times, the business development process will address every element of an organization, typically business development focuses on either a company’s “Value Stream” or “Commodities.” Value Stream Definition: Often referred to as the “Supply Chain,” the value steam for a business is the end-to-end milestones that drive to deliver a product or service to the customer. The process steps throughout the value stream may include, purchasing, planning, production, manufacturing, quality control and logistics. Throughout the value stream there are key points of product, service and information flow that can be analyzed for improvement in the overall chain. Value stream mapping is a common lean manufacturing technique that aims to analyze the supply chain efficiency and eliminated non-value added steps or procedures. The idea is that by removing these elements from the value steam, it will help minimize costs, increase throughput, decrease turn times and improve time to market. Supply Chain Consulting: Specialists in the world of supply chain consulting utilize “Six Sigma” and “Lean Principles” to diagnose symptoms of a poor performing supply chain and make suggestions for improvement that will allow the business to run more efficiently. Often, a more efficient supply chain will result in reduced costs that improve bottom line profits. Utilizing a supply chain professional allows the business to focus on their core competency and will also help identify what the core competency truly is. The benefit to the business is that they can focus on performing that company’s chief revenue earning practice, rather than spend time trying to improve the underlying processes. Business Commodities: Business commodities for this discussion, are all aspects of the business outside of the value stream and/or core competency of the business. For many businesses, the commodities are as follows… Human Resources / Payroll Marketing / Advertising Implementation Legal & Administrative Finance / Accounting Information Technology These business elements fall outside of the primary revenue source for most businesses and a majority of small to mid-sized business outsource all of these elements completely. For many small businesses, sales and marketing is an afterthought, yet thousands of ad agencies are consistently attempting to sell spots to them. How does the business know what type of ad campaign to run without a proper upfront strategy? Legal is another area that is commonly skimmed over because of the tremendous cost of 3rd party attorneys. For many small businesses, Finance / Accounting is another lightly visited area, and many small business owners are oblivious to their cost structure including basic concepts such as the business “break even” point. Information Technology tends to be either highly under or over utilized for small to midsized businesses. What good is a high priced E-Commerce web site without the proper marketing to let consumers know that it exists? Commodity Consulting: There are thousands of companies today that aim to sell various tertiary elements to the business owner but very few that truly align with the business in order to drive its overall success. Total Merchant Network is the first business development company that truly views the business as a client and not as the next sale. By aligning itself with the top providers for each commodity, Total Merchant Network gives the small business owner access to strategy development and...
Read MoreCredit Card Processing Explained
Credit card processing also referred to as merchant processing is a highly competitive industry that uses multiple channels to allow businesses to accept credit and debit cards as a form of payment. These channels include the card issuers such as banks and credit unions, which issue card brands such as Visa and MasterCard, the merchant processors who take on the risk, and the acquiring banks that transfer the funds. The Reason for Fees From Processors Credit card processing is essentially a loan between the merchant and the processor. This is because the consumer will use his or her card for a purchase and the merchant will acquire the funds from that transaction generally within 48-72 hours even though the consumer may not pay the credit card bill for another month or longer. The merchant processors cover the non-payment risk of the consumer and in return charge a service fee typically group into tiered rates or as basis points. Visa and MasterCard create what is called the interchange rate, which is the rate they charge per transaction for their service and to cover fraud. The merchant processor then charges the merchant above and beyond that rate for holding the risk of the transaction and for generating profits. Qualifying for a Low Discount Rate Many merchants will qualify for relatively low rates especially if they are in the retail sector and are an established business. Some businesses especially start-ups, ecommerce (online) businesses, or businesses in certain industries fall into the category of high risk credit card processing. These high risk merchants will typically only be able to work with processing companies that specialize in supporting high risk merchants and high risk transactions. These merchants will pay fees that are somewhat higher than low risk merchants based upon the level of risk for each transaction. Merchant processors also charge additional line item fees, some of which are listed below… Statement fees – Monthly charge for paper or online transaction and settlement (batch) records. Authorization Fees – A charge in addition to the percentage or discount rate fee for every transaction made. This is commonly the only fee for debit card transactions. Settlement (Batch) Fees – A fee that is charged every time the merchant “batches” or does a settlement on their terminal, which is usually performed at the end of each business day. PCI Compliance Fees – Fees charged by processors to make sure their merchants are in accordance with the Payment Card Industry (PCI) standards and regulations. Monthly Minimum – Charge to the merchant if they do not reach a monthly processing minimum. How can I start processing? In order to start to accepting credit cards as a form of payment, a merchant is required to fill out a merchant application with a processing company. There may also be other required documents including business financials, articles of incorporation, bank information, copy of a personal identification card and possibly other depending on the type of business. If you are interested in exploring this business solution further follow the link below to apply. Click Here to Apply for a Merchant Account...
Read MoreSecure Online Accounting Explained
Secure Online Accounting Defined Secure online accounting, which is often referred to, as cloud accounting is a service that removes site level bookkeeping from personal computers and hosts it securely online. This creates protected accounting information, allows for multiple-user access and gives bookkeepers, accountants and financial professionals more efficient access to business financials in real time. Some of the ways in which online accounting mitigates data loss risk is by keeping sensitive information securely hosted off site and backed up in multiple ways regularly. Examples of how online accounting removes the risk of data loss include the following: Eliminates loss of data due to computer malfunction and tampering Removes the risk of data loss due to on-site disaster or theft Creates redundancy by data being hosted in more than one location Adds security of daily and weekly backups to multiple sources Cloud accounting also provides an ease of functionality and convenience for the business owner in several ways, including: Full access to accounting information in any location at any time Full access for bookkeepers from any location Real-time accounting updates for the business and bookkeeper Multiple-user access affords the ability to instantaneously review client data and update books Removes the hassle of file exchange between business owners and financial professionals Cloud accounting is a no-brainer for any business but is often not thought of during business development. It is an easy low cost solution that every business owner needs but is overlooked frequently. It is an easy fix for those who spend countless hours at the end of year and at tax time consolidating financial information when it could be avoided with some simple planning and implementation of a virtual accounting program. Wouldn’t it be better to spend minutes throughout the year, instead of hours or even days at the end of the fiscal year? Cloud accounting also integrates seamlessly with POS systems and credit card processing allowing the business to eliminate non-value added man-hours manually importing and exporting data. If you are interested in exploring this business solution further follow the link below for a free trial. Click here to sign up for a your 30 day FREE trial of secure online accounting (clouded...
Read MoreTimeline of Major Events in Payment Processing
As we learned in payment processing, electronic money has a long and varied history. From Western Union’s advances in the late 1800’s to the release of the Google Wallet in 2011, the world has seen vast changes in the way that commerce is conducted on both a local and global scale. With advances in mobile technology and the continued prevalence of the internet, there is no limit to where payment processing can go in the next 140 years. Timeline of Major Events in Payment Processing 1871 – Western Union introduces money transfer 1914 – Western Union introduces first charge card 1918 – Federal reserve banks begin to move currency via telegraph 1939 – Concept of automatic teller machine created 1950 – Dinners club releases first plastic card limited to 27 restaurants in NYC 1958 – Bank of America realease the BankAmericard 1964 – IBM & American Airlines develop online reservation process 1968 – Modern ATM conceptualized 1973 – First ATM installed into the Chemical Bank in NYC 1979 – Michael Aldrich developed predecscorr to online shopping 1981 – Thomson Holidays, UK is first B2B online shopping 1982 – Minitel was introduced nationwide in France and used for online ordering. 1985 – Nissan UK sells cars and finance with credit checking online from dealers’ lots 1986 – Discover Card is unveiled at the Super Bowl 1989 – Visa adds electronic signature capability 1990 – Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT computer. 1994 – Netscape is released promoting online ordering and the needed for SSL encryption 1995 – Amazon.com launched by Jeff Bezos 1998 – PayPal and the idea of the eWallet developed 2000 – Dot.com bust 2002 – eBay acquires PayPal for $1.5 billion 2004 – Antitrust court ruling against Visa and MasterCard initiated 2006 – The Payment Card Industry Security Standards Council is formed 2008 – Groupon redefines how customers shop for discounts 2010 – Durbin Amendment introduced; aimed to reform credit / debit card fees 2011 – Google releases Google Wallet If we have missed any major milestones you feel should be added, please let us know by leaving it in the comments section below…...
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