Articles Posted in Entrepreneur

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How Do Family Businesses Survive Transition?

The Cornell University Smith Family Business Initiative says that more than three-quarters (77%) of small businesses rest on significant family involvement. Family Enterprise USA has counted 5.5 million family businesses in the U.S., finding that they contribute 57% of the U.S. GDP, employ 63% of workers and create 78% of all new jobs. And not all are small businesses: Businessweek.com has reported that 35% of Fortune 500 companies are family-controlled.

But the statistics on how often family businesses don’t sustain themselves over time—whether due to squabbling or for other reasons—paint a stark picture. According to Business Week, 40% of family-owned businesses reach the second generation, 13% get to a third and just 3% are passed down to a fourth generation or beyond.  And familybusinesscenter.com calculates the average life span as 24 years.

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Subchapter V for Small Business Owners

For the past two years, small businesses whose bottom lines were impacted by the onset of COVID-19 enjoyed greater protections while going through Chapter 11 bankruptcy reorganizations in the form of higher debt limits under the Small Business Reorganization Act.

That act, passed in August 2019 and enacted as of February 2020, established what came to be called “Subchapter V” of the SBRA, aimed at providing a simpler, less costly and ultimately more beneficial Chapter 11 process for small business debtors who would struggle to afford administrative and other costs.

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New Laws for Small Businesses in 2022

From salary and benefits, to the hiring process, to non-compete agreements, an array of new state legislation that affects small businesses in one way or another has taken effect as of the first of the new year, 2022.

The legislation focused non-compete agreements (SB 6

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When is the Best Time to Start a Business?

During the pandemic there were over 400,000 new businesses formed, the most since 2007.  This outpaced the number of businesses which closed during the pandemic.  

We have seen a number of businesses which were formed over the past year by well-meaning and cost-conscious entrepreneurs.  These new ventures – both corporations and limited liability companies – frequently overlook some critical elements of a new business.   In fact, the first question to ask is whether you should organize as a small corporation or a limited liability company.  There are tax consequences and managment questions that should be considered in making the choice. 

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Attorneys Misty Cygan and Geo Bellas can help your get business off to a good start.

We’ve run a series of posts recently about the steps involved in launching a business.  These have covered issues like deciding what type of business you want to start and what your business model will be; putting together a business plan and identifying sources of capital investment; and naming and registering your business.

This final post will flesh out how forging a beneficial relationship with a law firm that delivers services in a punctual, professional and affordable manner is key to the endgame of getting started with your new venture.

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Considerations for Starting a Small Business

Recently, we ran a post What to consider when Starting a Small Business, Part One  about some of the early steps in starting a small business—deciding you’re ready, figuring out what type of business you want to start, surveying your competitors, and figuring out the optimal business model.

At that point, it’s time to get down to the proverbial brass tacks and put together a business plan, which really doesn’t need to be more than one page long unless you’re going to apply for a loan from a bank (in which case you should find out what the lending institution requires).

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Are you thinking about starting a small business?

It can be an exciting and challenging endeavor, although it’s more likely to succeed if you plan ahead, take it step by step, and surround yourself with trusted, experienced advisers.  Of course, such an important endeavor – not to mention a life alternating event – requires hard work, ingenuity and more than a little legal advice.   You can start by going to our webpage on What to Ask When Staring a Business.

Keep in mind that there might never be an absolutely perfect time to start your own business – so for starters you need to take stock of your mental state and make sure you’re as ready as you will ever feel.  

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Entrepreneurial Business Concepts 

Companies like GE, Disney and HP got their start during the Great Depression, while Airbnb, Uber, Slack and Venmo launched in cyberspace during the Great Recession.   Taboola’s analysis of more than 8 billion page views, along with data from the aggregated readership among 1,000 of its publisher partners, collected in March and April, shows several promising growth markets, as Singolda noted in an article published on CNBC.com.

Creating the next great videoconferencing platform is an idea that’s probably already taken, but the Taboola analysis of search engine terms revealed others:

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Protecting Data while Working Remotely

Cyber Security Issues while working remotely.

Does your cyber liability insurance cover data breaches that occur while employees are working at home, using their personal devices such as tablets and laptops?

There’s no time like the present to look into this issue, with most employees telecommuting and hackers perhaps sensing new opportunities to do what they do—and in fact, cyber intrusions have been on the upswing in recent weeks.

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crowdfunding-620x480-300x232What is Equity Crowdfunding?  Is this the Future of Raising Investment Capital?

It seems that while nearly everyone  has heard of crowdfunding, the concept of equity crowdfunding is not as well known but is gaining traction.  For those Chicago business owners that are new to this developing area, prior to May 2016 crowdfunding was available only to accredited investors (those with an annual income of at least $200,000 or a net worth of more than 1 million, not including the value of a primary residence).  Although the 2012 federal Jumpstart Our Business Startups Act[1] (JOBS) provided for non-accredited investors, the Securities and Exchange Commission (SEC) did not authorize equity crowdfunding to begin until May 2016.

Since that time, Article III of the JOBS Act has seen 49 successful offerings with 11.5 million dollars committed according to a November 17, 2016, Forbes report[2] on the state of equity crowdfunding.  While the report suggests that the large majority of startups are not yet using non-accredited crowdfunding under Title III, it is anticipated that equity investment platforms will see tremendous growth moving forward.

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