Category Archives for "Articles"

When building your dream house, don’t put the roof on first!

Articles

When building your dream house, don’t put the roof on first!

Close your eyes and imagine your dream house. Imagine all the memories you are going to make in that house. Now, imagine building this dream house with every custom nook and cranny. It’s going to be spectacular, right?! You consult with an architect to draw up a plan, and you hire a general contractor to oversee the project and ensure the home is built well.

Everything is on track and going great. You are so excited that you decide to show the plan to your friends and family. Immediately, they start telling you about this fantastic roof you should have on your house. You, too, get excited about this roof and decide this is what the construction team needs to build first. Of course, they object. Not only is it unwise to honor your request, but it’s also not possible.

You can’t build the roof first.

Sadly, this is one of the most common mistakes I see within the world of small business. While it is usually unintentional, many business owners try to build their business by putting the roof first before creating the foundation. Just like building a physical house, building the roof first is a huge mistake that will end in disaster.

I get it. You want to pursue your passion and start making money. And starting a business can be complicated. It’s more fun to ignore the boring stuff. But to create a rock-solid foundation for your business, there are five essential strategies that must be appropriately incorporated.

Just as you would build your dream house on a firm foundation, you also need to treat your business the same way. You must set your business up correctly (i.e., a properly formed LLC), develop a solid strategic plan to guide you, implement sound financial practices to ensure your business will remain solvent, and create a marketing blueprint to guarantee your message reaches your ideal customer.

While friends and family members are well-intentioned and may even be small business owners, there are unique intricacies with each small business that a professional needs to address. 

Kent Gustafson Consulting is here to help you build your successful business and implement the five pillars of success. I created this roadmap after learning the hard way just how difficult starting a small business can be. Since then, I’ve worked with thousands of small business owners to help them create a rock-solid foundation and a structurally-sound business.

If you are ready to start a business or have recently started a business and want to make sure you are building a profitable, sustainable business that can maintain that success, reach out to Kent Gustafson Consulting today.

Build Your Business on a Firm Foundation

Articles

When you are building a house, it’s vital to build your home on a firm foundation. The same thing is true when building a business. In my time as a business consultant, I’ve seen far too many people build their business on the sand. 

Are you familiar with the story of the two men who built houses? One man built his house on a rock, and the other man built his house on the sand. When the rain and floodwaters came, the man who built his house on the sand was left with rubble. But the man who built his house on a rock-solid foundation was fine.

While it’s hard to know what your business will come up against, you must be prepared. This is why the majority of aspiring entrepreneurs set up LLCs for their business. But, in many cases, these business owners aren’t sure why or if an LLC is right. They were just told by a friend or someone else that they needed one.

Let’s start with the basics. LLC stands for Limited Liability Company. When an LLC is formed and maintained correctly, it provides liability protection for you as a business owner. In other words, if something goes wrong with your business and you face any legal action, you can’t be held personally liable, and your personal assets are protected.

But, it’s critical that the LLC was correctly formed for any of it to work as intended.

I’ve seen many aspiring entrepreneurs use a cheap online filing service or get help from a friend who has filed an LLC before. I get it. You have limited funds as you start your business, and you want to find a cost-effective way. But this is where you can encounter problems later.

All LLCs are not the same. Each state has different filing requirements. It is critical to understand the specific statutes that govern your state and make sure your LLC is customized for your business. When filing your LLC, you will need:

• Articles of Organization
• Operating Agreement
• Federal Tax ID#
• Membership Subscription Agreement
• Membership Certificates & Ledger
• Register of Officers, Managers, Governors
• Declaration of Management Structure (i.e., Member-Managed, Manager-Managed, Board of Governor-Managed)
• Bank Authorization Resolution
• Organizational Meeting Minutes
• Etc.

If your LLC is not done correctly, you are not any better off than the man who built his house on the sand. When you use an online filing service or get help from a friend, you are getting what you paid for, and you may not be protected long-term, which is likely going to cost you more than if you were to have just invested in a better foundation at the get-go. This is why it is crucial to avoid the cheap, sub-standard service or the DIY approach.

If the LLC’s liability protection is rendered worthless, you can be held personally and financially responsible for any legal action against your business. No one wants that.

Piercing the Corporate Veil is a legal metaphor for when a court disregards the separation between your business and you. It means you and your personal assets are exposed. I will talk more about this concept in the future.

Starting a business is hard enough. I want to help you make sure your business is built on a firm foundation that will protect you and the wealth you are accumulating.

This was a lot of information to take in, and I’d love to help answer any questions you may have. Please, feel free to schedule a call with me or shoot me an email at kent@kentgustafson.com.