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ICYMI: SBA Administrator Maria Contreras-Sweet Answers Your Questions Live from Google HQ

By Stephen Morris, SBA Official
Published: August 27, 2014 Updated: August 27, 2014

Note: the live event has now concluded. You can watch the entire Q&A in the video link above.

Looking for tips on how to start or grow a business? Gain insight from the expert, join SBA Administrator Maria Contreras-Sweet as she answers your questions during a live Google Hangout-On-Air on August 27. The Hangout will be hosted on the  Google Small Business Community. You can submit your questions before or during the Hangout.

Since being appointed by President Barack Obama to lead the agency that advocates and guides our nation’s entrepreneurs, Administrator Contreras-Sweet has made it a priority to meet with small business owners all over the country, to hear about their experiences, challenges, and opportunities in person and digitally. So join the Hangout and learn how SBA can help your small business start, grow and succeed straight from Administrator Maria Contreras-Sweet.

Who:
Maria Contreras-Sweet, SBA Administrator
Whitney Lemon, Marketing Associate, Google

When: 
Wednesday, August 27

Time: 
4:30 PM ET / 1:30 PM PT

RSVP and Submit Your Questions: 
http://goo.gl/9oe5MD

Where:
Watch the Hangout live on the Google Small Business Community or visit this blog article for a live stream of the Hangout.

Hashtag:
#SBAhangout

About the Author:

Stephen Morris

SBA Official

Stephen Morris is online media coordinator for the U.S. Small Business Administration where he manages digital outreach to the small business community.

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Use Your Business Plan to Get Ownership in Writing

By Tim Berry, Guest Blogger
Published: August 26, 2014 Updated: August 26, 2014

Way too often, you can add up the percent of ownership in the heads of the partners and discover between them they think they own 200% of the company. That’s because one thinks the idea was worth 50% or more of the ownership, the other thinks the day-to-day work was worth 50% or more of the ownership, and another thinks having written checks and invested was worth 50% or more of the ownership.

What I particularly hate in this context is when people spend the time and do the work and develop the business without spelling these things out, and then, when it’s way too late, discover that they had radically different ideas about who owns what.

This is a great use of the business plan. If there’s awkwardness about who owns what when friends and family are involved, you solve that with the need to spell it all out for the plan. Don’t wait. Don’t wonder. Talk it out. The business plan is a built-in natural format that all of you can understand.

The key here is to get it in writing. That doesn’t mean legal contracts written and negotiated by attorneys, at least not in normal cases, and not in the beginning. What it does mean is getting your people together and iron out who owns how much of the company, and what the responsibilities are. And write that down – share it, so everybody is clear. And you can use it later.

Now, who owns what percentage?

Start with the money. Until proven otherwise, the one who put in all the money deserves all the ownership. That’s simple enough.

And then, from that starting point, if two or more partners agreed that one would earn ownership by working for free or less than market rate, then that can equate to money. Or if one contributes existing intellectual property such as written material or software code because that can equate to money too. But that should be spelled out and agreed upon before you start. Avoid vague promises related to so-called “sweat equity,” meaning work compensated by shares of ownership. Build a formula based on market value of the work. And put it in your plan.

And I personally don’t believe having had the idea, or not, matters. Ideas have no value. Work has value. Creative work and patents have value. Content has value. And money has value.

Always get a business agreement in writing!

I’ve said business plan above, but the underlying need here is bigger than the business plan. The plan is a great format, but let’s emphasize the main point: To me this is yet another example of why I’ve said, and written, over and over again, spell it out at the beginning and get it in writing. Not necessarily all legalese like a contract, but at least the basic points of agreements, with signatures. Here‘s what one lawyer (and I’m not a lawyer, so don’t think I’m giving you legal advice here) says about that:

It goes without saying: the best way to deal with a botched verbal contract is to avoid the whole mess in the first place. Get it in writing. People remember things differently. People don’t remember. People lie.

Get it in writing. And then stick to it.

About the Author:

Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.

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Ask the SBA Administrator: Join the Live Google Hangout-On-Air for Business Tips

By ngoriel, SBA Official
Published: August 21, 2014 Updated: August 27, 2014

Looking for tips on how to start or grow a business? Gain insight from the expert, join SBA Administrator Maria Contreras-Sweet as she answers your questions during a live Google Hangout-On-Air on August 27. The Hangout will be hosted on the  Google Small Business Community. You can submit your questions before or during the Hangout.

Since being appointed by President Barack Obama to lead the agency that advocates and guides our nation’s entrepreneurs, Administrator Contreras-Sweet has made it a priority to meet with small business owners all over the country, to hear about their experiences, challenges, and opportunities in person and digitally. So join the Hangout and learn how SBA can help your small business start, grow and succeed straight from Administrator Maria Contreras-Sweet.

Who:
Maria Contreras-Sweet, SBA Administrator
Whitney Lemon, Marketing Associate, Google

When: 
Wednesday, August 27

Time: 
4:30 PM ET / 1:30 PM PT

RSVP and Submit Your Questions: 
http://goo.gl/9oe5MD

Where:
Watch the Hangout live on the Google Small Business Community or visit this blog article for a live stream of the Hangout.

Hashtag:
#SBAhangout

About the Author:

Natale Goriel

SBA Official

Hi, my name is Natale and I'm serving as a Moderator for the SBA Community. Our goal is to continually improve this site to meet your needs, so we appreciate your feedback and participation.

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6 Franchise Purchasing Tips

By FranchiseKing, Guest Blogger
Published: August 19, 2014 Updated: August 19, 2014

It can be pretty overwhelming to find a franchise business opportunity that you feel is right for your town, your investment level and your skills. There are so many choices these days, with new franchise opportunities appearing all the time. Lucky for you I have some steps you can take to help you make the purchasing process easier to manage.

1. Use The Internet’s Power

Don’t allow you to get sucked into a 5-day franchise website click-a-thon.

Instead of clicking from one website to another, hoping to find that “perfect” franchise to buy, use the search engines to help you narrow your choices.

Choose your favorite search engine, and type in very specific search terms. In other words, don’t type in “franchise opportunities.” Type in “franchise opportunities in healthy food,” or “franchises for sale commercial cleaning.” You’ll save hours of time.

Compare Opportunities

When you find one franchise opportunity that looks really interesting and matches your skillsets and personal traits, don’t stop there. Look for one or two more that are similar.

With an investment that will probably end up being more than $100k, it’s important for you to find the best franchise for the money, both short-term and long-term. One way to do that is to have conversations with the franchise development representatives from a few different franchises.

The other way to find out which franchise opportunities will give you the most bang for the buck is by talking to existing franchisees.

2. Research

In order to get to the heart of the matter and decide which franchise to focus your time and energy on, it’s crucial to talk to and if possible, visit franchisees of the concept you’re looking into. And, you’ll want to do this earlier rather than later…but not too early. Make sure you have a deep understanding of the business concept before you spend time in-person or on the phone with franchisees. They’re busy trying to make a living and will be more open to talking with you if you come across like you’ve done your homework.

3. Use The Franchise Disclosure Document

Once you’ve received the Franchise Disclosure Document (FDD), read through it. Highlight the things you don’t understand or that you have legitimate concerns about.

The 23 items you’ll find in the FDD are all important. Try not to get overwhelmed by the scope of the document. When the time comes, hire a franchise attorney (only) to go over the things you’ve highlighted. Franchise attorneys look at franchise documents every day and they know what to look for in them, and how to explain the legalities of franchise ownership.  

4. Use Professionals

Once you’ve found a franchise or two that you’re quite interested in, and you’ve done a good amount of research, it’s time to invest some money.

Consider hiring a small business accountant who can educate you on some of the future tax implications of being the owner of a franchise. Some of those tax implications have to do with how you’ll set up your franchise business. Some of the entities include an LLC, an S-Corp or a C-Corp. You’ll want to know the pros and cons to each one, so you can make an intelligent decision when and if the time comes.

A franchise lawyer (as I wrote above) is an important asset to have by your side as you get closer to making a yes or no decision on the franchise(s) you’re thinking of buying. It’s important to know all you can about the documents you may end up signing.

5. Use Your Instincts

Purchasing a franchise is a big thing.

Compiling all the data you’ve collected is important. Understanding the franchise contract, and going through the numbers is too. But, there’s another thing that’s equally important – and that’s you.

You have to trust your instincts.

If what you’re about to do feels right, you may want to move forward. If it doesn’t…if it just doesn’t feel right, you may want to move on. You can always come back. And, there are plenty of other opportunities in franchising to look into if the one you thought was “The One” turns out to not be.

About the Author:

Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and is a franchise ownership advisor. He shows people how to carefully choose and properly research franchises.   

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