Power lunches are an important part of most executives' weekly schedule. But if you've never arranged a business lunch before, it can be a little intimidating. Here are some easy tips which will help you plan a successful business lunch, and hopefully pave the way to a successful transaction.
Whether you're hoping to generate extra income in addition to a regular job to help make ends meet, or you want to fulfill some entrepreneurial goals, starting your own home business can help you meet those goals. But home businesses can also offer many challenges. Follow these 18 tips from successful home business owners to help increase your chances of reaching profitability without spending every waking moment and every last dollar to get there.
Whether they are people who don't want to spend most of their waking hours commuting to and from work, parents of young children who want a more flexible work environment, retirees who have decided to get back into the mainstream, or entrepreneurs who want to start their own side gig as a means of making extra money, there are plenty of opportunities for anyone considering starting up a home-based business.
If you've ever thought about starting your own home business, there's no time like the present. But what sort of business should it be? How do you get started? How do you find potential customers? Let's go over the essential steps you should follow in order to answer those questions and help you in your decision-making process.
Everyone has skills, knowledge, experience and assets that can be channeled into a marketable home-based business. For instance, if you own a truck or have access to a trailer, you could start a junk hauling or recycling pick-up service. An accountant with space for an office has all the tools they need for a successful home business.
There are many types of businesses that can be run from your home, for example:
Do you know who your target customers are? How large is the potential market within your geographical area? You will need to answer those questions before you invest a lot of time and money into the venture.
Find out how many people in your area would be interested in your proposed product or service. Talk to the people in your neighborhood, take several informal surveys over a period of one to three months to determine what percentage of your target market would be willing to pay for your product or service.
Make the survey simple - just a few key questions. For example:
A business plan is an essential component of the process. It is a document that allows you to clarify what your business proposition is and how you plan to grow your business, set out your mission statement and goals, and convince potential lenders and investors why they should have confidence in its potential. A business plan is a vital tool for obtaining financing, especially if you require a start-up loan for equipment and supplies.
Your business plan should include:
Too often, enthusiastic and ambitious entrepreneurs jump into a self-employment project and suddenly find that the costs are too high, and the time requirements more than they can meet. It pays to lay it all out on paper before you get involved. The clearer the vision you have of the project before you start, the better your chances for success.
Regardless of what type of business you start, you should have enough capital available to sustain the business through the first six months of operation. Do not count on receiving or spending any business income for yourself or your bills during that start-up phase. All revenues obtained in the first 6 months should be reinvested into the business in order to reach your planned Year 1 projections. After that initial 6-month period you can set up a small monthly salary for yourself.
Don't expect instant success. Patience is essential. It takes time to build a business. But if you follow these five steps and stick with it, your chances of reaching your goals will be much improved.
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Joint ventures are much more common in today's business world as companies strive to gain access to new world markets and improve their profit margins in the face of increasing costs and the need to comply with rapidly changing laws and regulations.
Joint ventures, also referred to as "business alliances", "strategic alliances" or "corporate partnering", offer an attractive alternative to the traditional method of doing business, and there are numerous advantages to co-venturing:
A joint venture is basically a short-term partnering arrangement in which the parties involved jointly undertake a project for mutual profit. Similar to a partnership, a joint venture can involve any type of business transaction or project, and the parties may be individuals, companies or other types of entities or organizations.
The co-venturers share the costs and the risks, as well as any gains and benefits, and each of them contribute money, property, effort and/or know-how to the joint venture. The participants in a joint venture each retain ownership of their individual property, which is returned to them at the conclusion of the venture.
The parties may decide to enter into a contractual arrangement to cooperate with each other (a contractual joint venture), or they may decide it is more advantageous to incorporate a separate company to carry out the project (an incorporated joint venture). The life span of a joint venture is typically the life of the project for which it was created, although the co-venturers may determine that the joint venture should carry on for an additional period of time, if required by the nature of the project or business.
The laws governing joint ventures differ from country to country. For example, in the U.S. joint ventures are governed by state partnership and commercial transactions laws. In Canada, there are no specific laws governing joint ventures, and the joint ventures are governed by the written contract between the parties. Therefore having a written Joint Venture Agreement is of paramount importance.
If the joint venture is incorporated, with the co-venturers as shareholders, the legal status of the venture is governed by the laws that govern incorporated entities in the jurisdiction in which it was incorporated. It is important to note there have been court decisions where shareholders in a corporate joint venture have been deemed partners.
This is particularly true when you're expanding into a new market in another part of the world. Before you decide to venture into a foreign market, be sure that everyone on your team is well aware of the local laws and the cultural differences, customs, holidays, and social taboos.
Be clear on what the purpose of the joint venture is and how your business would contribute to and benefit from the venture. What would be required of you? What would your expectations be? What contributions would you be expected to make in terms of money, property, resources, and expertise?
Foreign joint ventures are subject to international trade laws and to local laws governing commercial transactions, labour, and consumer rights. Tax laws differ from country to country, and you should be fully aware of what these laws are in the countries you're moving into.
It is critical to know whether there are restrictions on the amount of investment or capital distribution that foreign entities are allowed to make. Can you freely move money into and out of the business, or are there limits imposed by law? Many problems can be avoided if everyone involved is very clear on the joint venture's goals and objectives and has a good understanding of how those goals are to be accomplished.
A well-researched business plan for the venture must be developed with a full analysis of the aims and objectives. Everyone involved should be well acquainted with the business plan and how it will be implemented. All of the participants must also agree on how the venture will be managed and what each party's role will be in that regard. These points should be clearly spelled out in the Joint Venture Agreement.
You should choose partners that can supply resources, property, assets, and/or know-how that complement your business. As with any other business relationship, you will want to check out all potential partners before deciding to embark on a joint venture.
Do thorough due diligence - on the principals as well as the company (if applicable). A Google search can bring up a wealth of information, comments, feedback, personal experiences - favourable and unfavourable - that can help you form a fairly accurate overall picture of the other partners.
Once you have prepared a draft of your agreement, review it with your co-venturer(s) and legal counsel prior to signing it. At a minimum, the joint venture agreement should include the following:
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A. A partnership is an unincorporated business that is owned and operated jointly by two or more parties. It is typically an ongoing long-term business operation, the end goal of which is to create profit for the partners.
A. The biggest difference is that a corporation has a legal existence separate from its owners, with the same legal rights and obligations as a natural person. A corporation can hold property and assets in its own name, it can sue and be sued, and it must file its own income tax returns. A partnership does not have this type of separate and distinct existence.
Unlike a corporation, a partnership is not required by law to hold meetings, elect officers, or maintain a corporate minute book. Usually the partners will all participate in the management of the partnership and will share pro rata (according to their individual contributions) in the profits and losses, and assume equal responsibility for the partnership's liabilities.
Shareholders of corporations and LLCs are not personally liable for the obligations of the corporation / company. By contrast, partners in a general partnership are all personally liable for its obligations and can be sued by the partnership's creditors.
A. If you go into business together with someone else, you have automatically formed a partnership and are not required to file anything to "create" the partnership in the eyes of the law. That having been said, depending on where the business is located and what type of partnership you are forming (such as a limited partnership), there may be some forms that are required by local government authorities for business and/or tax purposes.
Do your research to find out if you are required to submit any documentation to satisfy those requirements in your state, province or territory. It is beneficial for all parties that the details of how the partnership will be run are clearly set out in a written partnership agreement.
If you don't have a written agreement, the partnership laws of your state, province or territory will govern the partnership. A written partnership agreement will remove any ambiguity as to the parties' rights and their responsibilities to each other and to the partnership, and can eliminate many sources of conflict before they arise.
A. Having a formal written agreement in place will allow you to set out the exit process for partners. The partners must decide what will happen to the partnership if somebody wants to leave the partnership for any reason - whether by choice (retirement, change of circumstances, etc) or by necessity (illness, incapacity, bankruptcy, death). Every Partnership Agreement should contain buy-sell provisions to deal with these situations, in order to avoid loss of income, litigation, tax implications, and other negative consequences.
A. As discussed above, a partnership is not considered a separate entity in the way that a corporation is, so the partnership does not pay income taxes on its own behalf. Partnership profits and losses pass through to the partners, who must claim them on their own income tax returns. The partners then pay taxes on their share of profits or deduct their share of partnership losses, as appropriate. Nevertheless, partnerships are required to file certain forms with the taxing authority - this is true in both the United States and Canada.
A. A general partnership is a partnership in which all the partners participate in managing the business. In a limited partnership, one or more general partners are responsible for running the business while the limited partners (of whom there may be many) are responsible for capitalizing the business. The limited partners have very little control over the day-to-day operations, but in return for giving up that control their liability for partnership debts and obligations is limited to the extent of their investment.
Securities laws may apply to the sale or transfer of limited partnership interests. If you're considering setting up a limited partnership to attract investment capital, you should consult a lawyer.
A. Because a partnership has no legal status as a separate entity, the partners are personally liable for all of the partnership debts and obligations. Partners in a general partnership have the same degree of liability as the owner of a sole proprietorship. If one of the partners creates an obligation for the partnership, all of the partners are bound by it.
Limiting the liability exposure of the partners can be encompassed in a written agreement, by stipulating that all or a majority of the partners must consent to enter into certain types of obligations or to incur debts over a certain limit on behalf of the partnership.
Limited partnerships reduce the liability of the limited partners to the extent of their original investment. The general partner manages the partnership and accepts full liability for the partnership obligations, and the limited partners give up any management authority in return for the protection from liability.
A. A written Partnership Agreement should contain the following:
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If your business hires outside consultants, it's worth your while to learn how a consulting contract is structured. And if you're a consultant yourself, you'll want to know how to prepare your own agreements with clients to cut down on your legal fees.
While people often assume you need to have an attorney draw up your contracts, if you acquaint yourself with the various provisions that are included as standard elements in a consulting agreement, you should be able to confidently draft your own contracts.
The terms of the contract should be discussed and agreed to verbally first, before putting it in writing. It might be a good idea to prepare a Letter of Intent first, to make sure that both parties are on the same page before you enter into a formal written agreement.
1. The Preamble. At the top of the first page you will set out the full legal names and a brief description of each party, and a summary of the parties' intents and the purpose of the contract. This is referred to as the preamble.
2. Services to be Provided or Excluded. Fully describe the scope of the services that the consultant will provide, either in the main body of the contract or in an attached schedule. If certain services are specifically not included, these exceptions should be clearly set out. All deliverables, completion dates and deadlines should be listed.
3. Employees and Contractors. If more than one person will be providing consulting services, identify them and how they are related, i.e. which ones are employees and which ones are independent contractors retained by the consultant to assist with the project.
It may be helpful to include an organizational chart with each person's name, position and job description, and the reporting hierarchy. Each of these persons should agree in writing to be bound by the terms of the Consulting Contract.
4. Qualifications. The consultant's qualifications should be described, or if the parties prefer, the consultant can make representations to the effect that he/she is fully qualified to provide the services.
5. Term and Renewal. Define what the term of the agreement will be. If it is project-specific, clarify the circumstances that define completion of the project.
6. Contract Price. The contract price should be clearly set out. You also need to be very clear about:
7. Invoices. If an invoice is required to initiate the payment cycle, it's advisable to include a description of the invoice format or attach a sample invoice as a schedule.
8. Approval Process. Describe the procedure for approval and acceptance of each phase or deliverable, as well as the procedure for revisions if any are required.
9. Contract Extras. Describe how changes or additional services can be requested by the customer, the additional amount that must be paid for those extras, and when and how it must be paid.
10. Currency. Be clear on what currency is the basis for the amounts quoted by including a paragraph like this one: "All amounts required to be paid under or in connection with this Agreement shall be paid in lawful money of ___________ (name of country)."
11. Expenses. Detail which expenses will be paid by the customer, what proof is required for reimbursement by the customer (e.g., receipts), any maximum limit on expenses, and which expenses or amounts require the customer's prior approval. Clarify whether expenses will be included as line items on the regular invoices or if they will be billed separately.
12. Reporting. What kind of reports will the consultant be required to deliver, how often and in what form? This should all be clearly established in the contract.
13. Ownership. Be very clear about who will own the work product, including any intellectual property rights included in that work product. If the contract is made on a work-for-hire basis, the customer should be the owner of the work product and IP rights.
14. Insurance. Will the consultant be required to carry E&O / professional liability insurance during the term of the agreement? Make sure the insurance provision establishes the amount and type of coverage to be maintained.
15. Termination. This section should set out:
16. Dispute Resolution. Include a provision to deal with how disputes arising out of the agreement will be handled, such as having the parties agree to submitting disputes to binding arbitration or a third party mediator. It should also include the legal remedies available to each party.
17. Governing Law. Clarify the jurisdiction which governs the agreement (eg. "This Agreement shall be governed in all respects by the laws of _________________.").
18. Notices. Provide an address for each party for service of notices and other communications. If copies are to be provided to attorneys, accountants or other advisors, include an address for each of these persons as well.
19. Confidentiality. Include confidentiality provisions in the consulting contract or, alternatively, have the consultant sign a separate Confidentiality Agreement, make reference to it in the contract and attach a copy as a schedule. The confidentiality provisions should survive the expiration or termination of the contract. Clarify what the legal consequences will be for disclosing any confidential information without consent.
20. Non-Competition. Consider whether to include a non-competition clause (also called a "non-compete"), which restricts or limits the consultant's ability to perform similar services for a client's competitors (or its customers) during the term of the contract.
21. Entire Agreement. Make sure that all items agreed to verbally are set out in writing in the agreement. And include a standard clause that says the agreement supersedes any other verbal or written agreements between the parties and that no modifications or amendments are binding unless they are in writing and signed by both parties.
22. Limitation of Liability. Limit your liability to the extent legally possible. You cannot completely eliminate or avoid liability, but you may be able to limit the amount an unsatisfied client can claim to a reasonable amount, such as the amount that the client has paid under the contract plus attorneys' fees.
The contract should specifically prevent recovery for consequential damages. Include your employees and subcontractors under the limitation of liability clause to reduce their exposure as well.
Both parties should review the contract with a legal advisor and ask for explanations of any clauses that are not completely clear. Whether you're the client or the consultant, you should not sign anything unless you fully understand what you're signing.
If the contract is for a lengthy project, don't agree to wait until the end of the contract term to get paid. Split the payments up over the duration of the contract.
If a non-compete provision is included, you must ensure that it does not unfairly restrict the consultant's ability to earn a living in his/her field of expertise. This can result in the provisions being struck down in the courts. For instance, in California courts non-competition provisions are very likely to be deemed invalid. And in most other jurisdictions the more restrictive the provision is, the more likely a court will strike it.
The ownership provision should be worded so that it does not give the client title to ALL work performed by the consultant during the term of the contract. This could be interpreted by a court as giving the client title to work performed for other clients. You should get legal advice on this subject to ensure that (i) your rights are protected and (ii) other parties' rights are not infringed upon.
You should be wary of provisions that unreasonably restrict the consultant from assigning their interest in the contract or from subcontracting any of the work. Renegotiate this with the customer to ensure that the contract allows for assignment with consent, which should not be unreasonably withheld.
Almost any contract - even a "standard" form contract - is negotiable. If you're signing someone else's standard contract and any condition or provision of that contract makes you nervous or uncomfortable, it's your responsibility to bring it up.
Remember: Don't sign anything until you're satisfied with it. Review it with your lawyer, who can then assist you in negotiating a more favorable arrangement.
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Not only do you have to decide who to leave your property to when you die and who will be the executor of your estate, but you have to wade through a lot of confusing legal terms. This brief Glossary explains some of the words and phrases commonly used in wills, as well as a few other terms that you may encounter during your estate planning process.
An administrator is a person or firm that is appointed by the Court to manage and distribute the estate assets of a person who died without making a will, or of a person who died with a will but whose named executor is either unable or unwilling to act in that role.
Anyone who benefits under your Will by receiving a gift of property or money is a beneficiary.
A bequest is a specific gift of property or money to a specific beneficiary under a Will. To give a gift to someone under the terms of your Will is to bequeath that gift to them.
A codicil is an addition or addendum to a Will, which has the effect of making a change to the Will without entirely replacing it. Codicils are typically used only to make minor changes, but since the requirements for witnesses are the same for a codicil as for a will they really have no advantage over just making a new will.
A person who has died.
This term refers to the transfer of real estate property to a beneficiary through a Will.
To cut off a person from their inheritance in an estate where they would have been a natural heir. For instance, a child can be disinherited by a parent in the parent’s Will.
A testator's estate consists of ALL of the testator's assets and property, including cash, investments, real estate and personal possessions.
The person you have named in your Will who will be responsible for administering your estate is your executor (also called a personal representative or trustee). The executor is responsible for obtaining the grant of probate, collecting debts and other amounts owed to your estate, managing any testamentary trusts set up in your Will, filing the final income tax return, paying any estate taxes due, and making the final distribution of estate assets to the beneficiaries.
An adult person appointed by you to care for your minor children, or, if the guardian is a property guardian, the person responsible for managing any estate property left to a minor child in your Will.
An heir is a person who takes title to a deceased person's property by the laws of descent in cases where the deceased has no will. That is different from a beneficiary, who is bequeathed a gift in a decedent's will. When an heir takes or receives property through the legal right of succession in this manner, they are said to inherit the property.
A will that is handwritten, signed and dated totally in the handwriting of the testator is called a holographic will. Holographic wills are not recognized as legally valid in all places.
When estate assets are distributed to beneficiaries in their present form, that is a distribution in specie. The alternative would be for the executor to sell the assets and distribute the cash proceeds.
All persons who are descended from a common ancestor (for example one's children, grandchildren, and so on), either through birth or adoption.
A formal document issued by a probate judge giving a personal representative the authority to conduct business, enter contracts, sell estate property, pay bills, distribute estate property, and otherwise act on behalf of a decedent's estate.
This is a provision that you can add to your Will which provides that any beneficiary under the Will who makes a legal challenge to the validity of the document will be disinherited. You should review this with your legal advisors beforehand if you are considering adding such a provision.
Any real or personal property which has been disposed of by a decedent by any means other than through a will, such as proceeds of life insurance policies, retirement plans, or property held in joint tenancy with right of survivorship.
The method of dividing an estate by giving an equal share to each of a number of persons, all of whom stand in equal degree to the decedent.
This is the most common way of distributing an estate such that if one of the decedent's children is dead, that person's children will share equally in his/her share of the estate distribution. This is also known as "by right of representation".
Any estate property (real or personal) which has been left to beneficiaries under the testator's will, and which is managed by the executor prior to being distributed to the beneficiaries.
The legal process which facilitates the transfer of a deceased person's property, whether they have a will or die intestate (without a will). The court will establish the authenticity of the will, appoint a personal representative or administrator if necessary, identify heirs and creditors, direct the payment of debts and taxes, and oversee the distribution of the assets.
As in "last will and testament". The word simply means the written contents of your Will which consists of your instructions and wishes regarding the disposition of your estate.
This refers to your legal ability to make a will, meaning that you are of legal age and of sound mind.
A trust that is created under a will and does not come into existence until after the testator's death. Testamentary trusts are the most common method of managing estate property on behalf of beneficiaries who are not of legal age.
The testator is the person making the will - in other words, you.
An arrangement under which assets are set aside by an individual and administered by a trustee for the benefit of another person.
If you leave property or money in trust for minor children, the trustee is the person responsible to administer the trust until the conditions you have set (for instance, until the children reach a certain age) are met. The trustee has the authority to use trust funds for medical expenses, education costs, and other necessary expenses - basically the same authority as the parent would have if still alive.
You might feel honoured to be named the executor of a person’s estate. After all, it is an indication of the high regard and level of trust that the testator feels for you. However, it is a demanding, time consuming and often complicated role.
Acting as the executor of an estate involves dealing with all the legal, fiduciary and tax implications arising out of the person's death, as well as coping with the financial and emotional needs of beneficiaries. And if the deceased person is a loved one, the role becomes even more difficult because you will be dealing with your own grief and loss as well.
To aid you in properly carrying out the duties of an executor, we have put together a list of the duties that are most often required from an executor. But be aware that this list is not exhaustive. Other tasks may be required, depending upon (i) how complicated the deceased's estate is, (ii) where the property is located, and (iii) the marital and family status of the deceased (e.g., divorced, step-children, disabled dependents, etc).
1. Find and read the will, and organize funeral arrangements. Locate the deceased's will and read it over to familiarize yourself with their wishes and instructions. As soon as possible after that, arrange a meeting of the deceased's immediate family (and, if appropriate, include close friends or business associates). The meeting should discuss funeral arrangements, and identify and locate important documents and items such as banking and tax records, stocks and other securities, insurance policies, safe deposit boxes, title deeds, etc.
2. Determine the location of all estate assets and property. Make a list of everything and ensure that all assets (real property, personal property and funds) are protected and sufficiently insured. If the deceased was a business owner and there is no one available to take over managing the daily operations, you will have to hire a qualified manager on an interim basis to manage the business during the estate administration period.
3. Probate the estate. You may need to consult a lawyer to help you through the process, depending on the complexity of the estate. Probate will not be necessary (i) if all estate assets are jointly owned with right of survivorship, (ii) if the estate assets are held in a trust, or (iii) in some jurisdictions, if the estate is considered a "small estate". Any assets that have named beneficiaries (such as life insurance or registered investments) bypass the estate and are not probated.
4. Advertise for creditors. This is essential if the deceased is the sole owner of a business. Place a notice in a local newspaper with the name of the deceased, date of death and your contact details, so that any creditors who have an interest in the estate assets have an opportunity to come forward and make a claim. If you fail to do this and a creditor turns up after all the money has been distributed, you will be responsible for paying the debt.
5. Transfer all of the deceased's property into your name. As the executor of the estate, you are entrusted with the power and authority to dispose of the estate assets. You will need to deal with financial institutions, brokers, transfer agents, and land titles offices to transfer title deeds into your name first, before you can distribute the assets to the beneficiaries. This ONLY applies to property that is not jointly held with rights of survivorship.
6. Arrange for payment of all of the estate's legally enforceable debts, including funeral and probate costs. All of the debts must be paid out or the funds allocated to pay such debts, before any distributions are made to beneficiaries.
7. Prepare the deceased's final tax return. If you are not familiar with the tax laws related to estates, you may want to consult an accountant for expert advice.
8. Create any trusts provided for in the deceased's Will. A trust is a legal arrangement that requires assets to be held by a Trustee for a specified period of time - typically this will be when a minor beneficiary reaches a certain age. The income may be paid out or accumulated for distribution to the beneficiaries once the trust conditions have been satisfied.
9. Arrange for payment of legacies and distribution of the estate residue to the beneficiaries. This cannot occur until all estate debts are paid but in general, if the estate is not overly complicated the distribution will usually occur within the first 12 months following the death of the testator.
10. Keep complete and accurate records of everything you do. You may be required to produce these records as evidence if anyone contests the will or questions your actions as an executor.
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If you are about to make a Will for the first time, you may find that choosing an executor to administer your estate can be one of the most difficult - but possibly the most important - decision you will need to make with regards to your Will and estate planning.
Your executor (also called a "personal representative" or a "trustee") is the person you appoint to carry out the instructions in your Will, to distribute your property according to your directions, and to wrap up your estate after you die. You can name one person to act alone, or several people to act together in this role.
You also have the option to appoint a trust company or your lawyer to act as your executor, if you don't want to place that responsibility on a family member or friend. And make no mistake - it is a lot of responsibility and it's a task that can take years to accomplish.
The executor is responsible for dealing with all matters related to distributing and winding up your estate. The duties of an executor include such things as:
When you name someone close to you to act as the executor of your estate after your death, it's an indication of the high esteem and trust you have for that person. Certainly, you should appoint someone that you trust to manage the estate property and assets until they are all distributed according to your instructions in your Will. But you must also consider the fact that the role of an executor is a demanding, time consuming and often complicated one. It involves dealing with all the legal, fiduciary and tax implications of a death, as well as coping with the financial and emotional needs of the beneficiaries.
Choosing an executor who cannot handle all of these pressures may result in a delay in settling your estate, which in turn can result in higher fees and costs that can eat away at the estate funds. This will leave fewer assets for distribution to your beneficiaries.
Talk to the person about your plans, and find out if they are willing to act in that capacity. It is essential that you have their consent before you name them in your Will.
When choosing someone to act as your executor, consider the following questions:
It is a good idea to name an alternate executor in case the person you name as your original executor is unwilling or unable to act when the time comes. Another option is to retain a trust company or a lawyer to administer your Will. They will perform all the required duties, including administration of trusts, for a fee.
