Virtuoso Team Consulting, Inc.

They say the only two certainties in life are “death and taxes”. Each of these can, and will, have their own blog post, but I we shall start with Death. While this is a terribly morbid subject, I assure you it is something every business owner should take into consideration for a multitude of reasons. Business entities, continuation planning, and insurance are just a few issues that should be contemplated.

There are a number of different types of business entities, each with their own strengths and weaknesses, and I do not presume to know which entity best suits the reader. That is a subject best left to an accountant, tax advisor, or lawyer, and I am none of these. Having said that, one of my preferred entities is a subchapter S Corporation, primarily because it exists outside of the individuals who run it. It has its own name, tax identification number and legal liabilities. Most importantly, if anything happens to one of the principals, the corporation continues in perpetuity. This is in stark contrast to sole-proprietorships and partnerships which dissolve upon the death or incapacitation of a principal.

In the event a sole proprietorship or partnership has been chosen, a thoroughly detailed, legal document should be in place to dictate what happens in the event of someone’s death. The goal should be to keep “business as usual” for the remaining principals, not to mention addressing the rights and responsibilities of the survivors of the deceased. If the decedent is the business, as in the case of a lawyer, physician, or CPA et al, then what plan is in place to service their clients? Can these assets (client lists) continue to be served or sold to another individual or business?

Insurance is a tricky subject that I am licensed to talk about, but will only speak of in generalities for this blog. Insurance, in its simplest terms, is an investment you hope to never have to collect, but is of the utmost importance if it is ever needed. In particular, there are insurance policies to help offset the expenses of keeping the business running, searching for principal or executive replacements, and buying back stock from the decedent’s estate.

These situations should ideally be addressed before starting a company, but if that is not possible, they should be addressed immediately! Do not wait for this or that to happen before you plan for these eventualities or you may lose your ability to do anything about it at all.

©2008-2009 Virtuoso Team Consulting, Inc.   All Rights Reserved.

From the beginning, I knew it would be important to have a website for VTC, and since I had taken the last 8 months off from work so I could concentrate on school, I also knew I didn’t have the money to pay someone to build it for me. Two months later, it is finally ready to be hosted. This brings me to a simple premise; there are only two things we can invest, time and money. I had no extra money, so I had to spend time teaching myself all kinds of things about website development. While I can now speak somewhat intelligently on the subject, I hope to never again do much more than post blogs and podcasts.

The hours I spent working on the site took time away from my family and friends, an opportunity cost, but not one that can be easily measured monetarily. Would I have been better off saving my money in order to have a professional do it? At what cost? If the site had been up earlier, could I have increased my workload and by association my revenue? Questions such as these plague business owners. What I have decided for myself is, sooner is better than later, if the price is reasonable. I now determine “reasonable” by how much of my free-time will remain free, versus doing it myself.

For example, if it takes a professional website developer a week to create the page for VTC, and it costs $750, then I can say it will free seven weeks of my personal time. That is just over $100 per week, which in my mind is a great value. Everyone’s “reasonable” is going to be somewhat different, but it is important to look at the value of your time. Additionally, it is important to ask service providers about payment plans, and to establish the ROI (return on investment) such an expense will provide both you, as the owner, and the company.

©2008-2009 Virtuoso Team Consulting, Inc.   All Rights Reserved.