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Planning for Your Business Future

Life can be unpredictable and does not always turn out as we planned. Being prepared for a catastrophic event is vital to the sustainability of every business. It is important to prepare for the worst case scenario, thus allowing you to relax and plan for the best. To help you create a plan that addresses the needs of your business, Below is information on the key components that are crucial to have in place to ensure the long term stability of your company.

Consult a Professional
Consulting with a professional will guarantee that you will understand the options available to meet the unique needs of your business. Therefore we recommend that you consult with the following professionals: an attorney, an accountant, and an insurance agent.

Insurance
In the unfortunate event of a death or disability, maintaining the financial stability of the business members is essential to the continuation of the business past the loss. We recommend requiring all members to have disability insurance, life insurance, and health insurance policies that are payable to the member’s families. This will provide financial security for the business members and their loved ones.

Every business should carry a life insurance policy on its owners. This will provide the partners/members/shareholders with the financial ability to purchase the business in the unfortunate circumstance of a death.

Prepare an Exit Strategy
It is important to have a plan in place that will allow the daily operations to continue if you are no longer able to participate in your business. The continuation of the company affects not only the owner’s family, but it also affects the job security of the employees. To protect your company, it is important to discuss possible third party options for ownership. Often times there are family members or employees that could step into your role in an emergency. Prepare that individual for this worst case scenario by speaking to them before an unplanned catastrophic event occurs.

In a partnership or corporation it is important to plan for the scenario that a partner/member/shareholder would want to leave the business. It is important to clearly define how the other owner(s) will buy out the individual and how the buyout will be financed. “Establishing the valuation process up front will avoid conflict at the time of the buyout” states Fred Meier.

Emergency Document
It is important to develop a document that lists your company’s combinations, log in information, passwords, daily systems, and other key information that is required for the daily operation of your business to continue. Keep this document in a safe place and communicate with employees what is to be done on a temporary and permanent basis if an emergency were to occur.

AliveMax Review – Legitimate Business?

AliveMax is a MLM business opportunity, which is primarily focused on health and wellness spray products. The company was founded by Nauder Khazan, who is an experienced internet marketer and has been in online marketing business for many years. The primary focus of this company is to create income earning opportunities for its members through home based business. Members would be able to join the company for $50. The products, which the company sells are spray nutritional supplements and are available for anti-aging, vitality and multi-vitamin purposes.

AliveMax claims the compensation plan starts working for its members, right from the moment they join. The distributors are provided with various tools as part of the training program, which will help them maximize their earning potential. Here is a list of the earning incentives, which are available to members.

  • Welcome Bonus – The members are paid a one-time commission on the first 3 customers, who will fall below them in the team. The commission will be paid irrespective of who enrolled them. This would mean that the members will start earning commission the moment they have someone in the team. Retail
  • Bonus – Members and distributors will be able to purchase the products at wholesale prices and sell it to the customers at retail prices. The difference in prices will be their profit.
  • Fast Track Bonus – Every time a member enrolls a new distributor or a preferred customer, they would be entitled to 20 percent commission of the business volume of the first month’s order.
  • Bulk order bonus – Each time a distributor, which a member enrolled makes a bulk purchase the member would get 10 percent additional bonus. Apart from this as an Executive Diamond member, they will also get 10 percent on bulk order purchases, if any one from their team tree makes a bulk purchase.
  • Dual Team Building Cycle Bonus – Apart from the efforts of the members themselves in getting new distributors and customers, members and customers can also be placed in the team from members above. Based on the business volume, which is generated the members will be able to get different commission packages.
  • Matching bonus – As the members move up each level of the company, they are offered various bonus packages. The amount of money each individual would earn will depend on the performance of their team and as the team performance goes up, so will the compensation plan for the member.
  • Leadership Pools – Every quarter members who help build the company will be share profits in the leadership pool.

AliveMax is a legitimate MLM business opportunity and provides members potential to earn a substantial amount of income through the various incentives in the compensation plan. However as in any MLM business, it will require patience and perseverance to be successful and members should not look for overnight success.

Laying Your Business Foundation, Part 2: Business Formation

In this series we will take about business formation. If you have not read Part One, stop what you are doing and read the article now.

Again, laying your business foundation requires the same intensity as building a bridge, school, museum or any beautiful structure. It takes planning, time and execution, which means doing whatever, needs to be doing to complete the project.

I cannot tell you which business formation is best for your business, only you can make those types of decision. Your attorney, spouse, children or friends cannot shape your reality for you, it’s personal. Before making a decision or selecting which business formations consult with a licensed attorney and accountant to advise you of your legal rights.

Let’s begin…

Sole Proprietorship (SP)

The term “sole proprietorship” means that the business is the same as its owner. The assets and liabilities of the business are one and the same as the owner. There is no mandatory filing requirement on the state level; however, a sole proprietor may register a trade name. Although I do not recommend this entity; however the choice is yours.

Advantages

No other documents needed to open a bank account; purchase materials or supplies needed for the business and you can file taxes under your name. There are other reasons but these are the main reasons for doing so.

Disadvantages

You are responsible for any lawsuits against your company; therefore, this will affect your family well-being. Lenders do not see your business entity as a mom and pop business without any growth. Vendors are less likely to extend credit for major purchases. Contractors, governmental agencies prefer to utilize the services of a company that is not a sole proprietorship.

Incorporated (Inc)

A corporation is a type of legal entity, often formed to conduct business. A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its members. The incorporated entity can be very complex; however, you can delegate these complexities to someone who is skilled with incorporation such as an attorney or accountant who are knowledgeable about business laws and taxation.

Advantages

Your business will be accepted as a major contender within the business arenas. You and your businesses are separate entities which mean if your company is ever sued or liable the plaintiff can only charge the company not you personally. Lenders are more apt to lend funds to an established corporation entity compared to other business structures. You are telling the world that you are serious about expanding, growing and or selling your business. There are a number of good advantages to this particular entity and the decision is entirely up to you.

Disadvantages

The number one disadvantage is double taxation. You or your account will have to file taxes in the company name and your name. This drives most potential companies to sway from incorporating under this business entity. Contact your attorney and account to help you navigate through the incorporation process.

Limited Liability Corporation (LLC)

A form of business whose owners enjoy limited liability, but is not a corporation. The State of Wyoming is known as the LLC formation capital since 1976.

Note: Wyoming is not the only state that welcomes LLC formations.

Advantages

LLC members are afforded limited liability and have pass-through taxes similar to a partnership. By forming LLC instead of a corporation, you get all the benefits of forming a corporation but you avoid a few drawbacks that you would run into if you formed a corporation. Specifically, when you form a corporation, you subject yourself to double taxation and excessive paperwork. Both of those annoyances can be avoided if you form LLC. The LLC allows for multiple owners, or members. Additionally, there is a managing member, who also enjoys the benefits of limited liability and is typically the person responsible for managing the business. Members of LLC can be other companies, trusts, organizations or individuals. Members share power, ownership and responsibility over the LLC operations based upon an agreement each member signs upon formation of the company.

Note: If you are the only LLC member or manager you are allowed to use the 1040 or 1040-A filing forms. Check with your accountant or tax provider for advice.

Disadvantages

The entity we were forming will be seeking outside investment and will be offering stock options to employees. Many angel investors and venture capital firms are not lenient about investing in LLC because it’s a new business formation that is not well understood. When raising capital, it helps to keep things simple and avoid anything that makes an investor think twice.

Limited Liability Partnership (LLP)

A partnership where a partner’s liability for the debts of the partnership is limited except in the case of liability for acts of professional negligence or malpractice. In some states LLP may only be formed for purposes of practicing a licensed profession, typically attorneys, accountants and architects. This is often the only form of limited partnership allowed for law firms (as opposed to general partnerships).

Advantages

Both LLC and LLP entities are treated as pass-through entities for federal tax purposes. This means that the owners report company profits and losses on their personal income tax forms. The business itself is not subject to a federal income tax, as a corporation.

Disadvantages

LLP offer the same type of limited liability that of LLC; however, some states require a minimum of one partner of LLP liable for the obligations of the company. There are other business formations; however, these are the most popular.

Until Next Time! Stay tuned to “Laying Your Business Foundation.”

The overall scope for choosing a business formation is to give your business an identity that is separate your personal identity. Doing so will level the placing field within the business community should you choose to grow or expand your business. The topic of discussion for the next article of “Laying Your Business Foundation – Part 3”: Customer Service.