Advising Entrepreneurs : Dynamic Strategies for Financial Growth

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Format: eBook
Pub. Date: 2002-04-01
Publisher(s): Wiley
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Summary

This valuable book helps financial advisors address the needs of their entrepreneurial clients. Most people opening their own businesses are experts in their fields. But when it comes to the vital intricacies of running a successful business, many entrepreneurs find themselves struggling to survive.With more and more people starting their own small businesses, a growing need has developed for expert guidance to help today's entrepreneurs face their new legal, tax, and financial challenges. Advising Entrepreneurs helps financial advisors address the special needs of their entrepreneurial clients. It provides a comprehensive approach to growing wealth, shielding business assets from liabilities, lowering taxes, and much more by promoting prudent risk-taking. Marc Lane (Chicago, IL) is a business and tax attorney. He is a Master Registered Financial Planner, Registered Financial Consultant, and Certified Investment Specialist. He has authored thirty books, is an Adjunct Professor of Business at the University of Illinois College of Business Administration's Institute for Entrepreneurial Studies, and an Adjunct Professor of Law at Northwestern University.

Author Biography

Marc J. Lane is a practicing business and tax attorney in Chicago. He is a Master Registered Financial Planner, Registered Financial Consultant, and Certified Investment Specialist. He has authored thirty books and is an Adjunct Professor of Business at the University of Illinois College of Business Administration's Institute for Entrepreneurial Studies and an Adjunct Professor of Law at Northwestern University Law School

Table of Contents

Preface xiii
Part One The Financial Advisor's Role
1(26)
The Regulatory and Ethical Environment
3(10)
Duties of a Fiduciary
4(2)
Initial Interview
6(1)
Compensation Approaches
7(2)
Engagement Letter
9(1)
Conflicts of Interest
10(3)
Financial Management and Planning
13(14)
Pre-Start Analysis
14(2)
Entrepreneur as Manager
16(3)
Evaluating the Enterprise
19(5)
Eventual Harvest
24(3)
Part Two Shaping the Venture's Financial Structure
27(96)
Using the Tools of the Accountant
29(20)
Break-Even Analysis
29(2)
Forecasting Models
31(1)
Analyzing Financial Statements
32(5)
Managing Cash
37(4)
Managing Receivables
41(2)
Managing Inventory
43(1)
Managing Liabilities
44(2)
Managing Capital Assets
46(3)
Entity Design Choices
49(20)
Tax Considerations
50(1)
Sole Proprietorship
51(1)
Partnership
52(4)
Corporation
56(8)
Limited Liability Company
64(5)
Private Placements
69(8)
Federal Exemptions
70(4)
Private Placement Memorandum
74(3)
Venture Capital
77(10)
Venture Capital Marketplace
78(1)
Business Plan
79(1)
The Venture Capitalist's Valuation Process
80(2)
Venture Capital Agreement
82(1)
Employment Agreement
83(1)
Shareholders' Agreement
84(3)
Bank Loans and Debt Alternatives
87(14)
Characteristics of Debt
87(1)
Sources of Debt Financing
88(2)
Creditworthiness
90(1)
Types of Loans
91(1)
Leasing
92(1)
Working Capital Funding
92(3)
Selecting a Banker
95(2)
Negotiating a Bank Loan
97(4)
Government Funding
101(10)
Federal, State, and Local Funding Sources
102(2)
Small Business Administration
104(4)
Other Federal Opportunities
108(3)
Joint Ventures and Strategic Alliances
111(12)
Alliance Strategies
112(2)
Licensing
114(1)
Identifying a Strategic Partner
115(1)
Working toward a Strategic Alliance Agreement
116(7)
Part Three Protecting the Entrepreneur and His or Her Assets
123(88)
Risk Management
125(20)
Organizational and Operational Considerations
125(2)
Developing a Risk Management Agenda
127(1)
Insurance Principles
127(2)
Insurance Strategy
129(2)
Property Insurance
131(2)
Liability Insurance
133(2)
Insurance Benefits for Employees
135(2)
Self-Insurance
137(2)
Director and Officer Liability
139(3)
Indemnity
142(3)
Valuing the Entrepreneurial Venture
145(22)
Evaluation Methods
146(2)
Valuing Assets
148(8)
Valuing Liabilities
156(2)
Determining the Purchase Price
158(9)
Buy-Sell Designs
167(34)
Buy-Sell Agreement
168(1)
Triggering Events
168(1)
Funding the Buyout
169(1)
Stock Redemption or Entity Agreement
170(1)
Avoiding Dividend Treatment
171(3)
Stock Attribution Rules
174(2)
Redemptions to Pay Death Taxes
176(1)
Alternative Minimum Tax
177(1)
Accumulated Earnings Tax
178(2)
Split-Dollar Redemption
180(1)
Disadvantages of Redemption
180(1)
Cross-Purchase Agreement
181(1)
Trusteed Cross-Purchase
182(2)
Partnership Cross-Purchase
184(1)
Split-Dollar Cross-Purchase
185(3)
Wait-and-See Buy-Sell Agreement
188(1)
Employee Stock Ownership Plan
189(2)
Estate Tax Deferrals
191(1)
Premium Allocation
192(1)
Valuation
192(3)
Transfers for Value
195(3)
Combining the Life Insurance Retirement Plan and the Buy-Sell
198(1)
S Corporation Buy-Sell Issues
199(2)
Asset Protection Strategies
201(10)
Ethical Obligations
201(2)
Exempt Assets
203(1)
Gifting Strategies
204(1)
Choice-of-Entity Implications
205(6)
Part Four Compensation Planning for the Entrepreneur and His or Her Employees
211(50)
Cash and Deferred Compensation
213(38)
Bonuses and Deferred Compensation
214(1)
Constructive Dividends
215(2)
Company Retirement Plans
217(5)
ERISA Compliance
222(13)
ERISA for Deferred-Compensation Plans
235(7)
ERISA for Split-Dollar and Executive Bonus Plans
242(5)
Related Issues: Age and Sex Discrimination
247(4)
Equity-Based Compensation
251(10)
Stock Options
252(1)
Incentive Stock Options
252(2)
Nonqualified Stock Options
254(4)
Restricted Stock
258(1)
Phantom Stock Plans and Stock Appreciation Rights
259(2)
Part Five Managing Capital Events
261(52)
Buying or Selling an Entrepreneurial Business
263(26)
The Client's Objectives
263(3)
Financial Information
266(2)
Guidelines for Reviewing Standard Accounting Opinion
268(3)
Contracts and Continuing Obligations
271(2)
Leases and Properties
273(3)
Federal Taxes
276(2)
State and Local Taxes
278(2)
Internet Domain Names, Patents, Trademarks, Trade Names, and Copyrights
280(1)
Permits, Licenses, and Franchises
281(1)
Liens, Judgments, and Deeds
281(1)
Employee Benefit Plans
282(1)
Unemployment Compensation Rating
282(1)
Stock Certificates, Options, and Records
283(6)
Succession Planning
289(14)
Federal Tax Rules
290(1)
Tax-Deferral Opportunities
291(1)
Valuation Strategies
292(1)
Income-Shifting Techniques
293(10)
Initial Public Offering
303(10)
Public Life
303(2)
Preconditions
305(1)
Registration Team
306(1)
Registration Process
307(3)
Nontraditional Alternatives
310(3)
Index 313

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