Risk Management

Risky Expansion? Consider a Subsidiary

When a company embarks on a venture that’s high risk, it may make sense to protect the established company from liabilities that will or could arise in the new venture. A commonly used and quite effective (and relatively inexpensive) means is to set up a subsidiary corporation and operate the new venture within it.

Corporate Governance and Maintaining the Corporate Veil

The purpose for incorporating (C corp., S corp., LLC) a business is to protect investors (stockholders, owners, etc.) from personal liability for corporate (business) debts. To enjoy such protection, the corporation must be maintained in a certain manner.

Hey, Partner, We Need a Buy-Sell Agreement

If you have partners, you need to consider what will occur when a partner wants to retire or suffers death or disability. One way to minimize chaos and control the order of events is to design and execute a buy-sell agreement. Desirables include: 1. Preserve control by restricting transfers or sales of company stock to persons outside the company or owner’s immediate family. 2. Protect business assets and ongoing operations. 3. Provide cash or other assets (e.g., life insurance proceeds or promissory notes) to the retiring or disabled owner or family of the deceased. 4. Establish a method for determining the value of the business for estate tax purposes and transfer or sale of company stock. 5. Assure sufficient liquid assets are available to fund a buyout, pay federal and state estate taxes, and meet financial needs of surviving family members. 6. Reduce some of the risks inherent in grants of incentive stock awards to key employees.

Protect Yourself, Use Password Best Practices

According to an article by Ben Leach that appeared online at www.Telegraph.co.uk, data security firm Imperva analyzed 32 million passwords that had been exposed in a recent hack of RockYou.com. Cyber crime is rampant. Conduct your affairs prudently and cautiously or you’ll fall victim.

Business Owner Imperative: Ensure Continuity

Sudden and unforeseen events such as tornadoes, floods, fire and hurricanes can put you out of business in a heart beat. Just as the business owner must work each day to secure profit and liquidity, he or she must have contingency plans for the unexpected. So, identify critical assets, list things that could damage those assets, develop mitigation plans and conduct a periodic review of that plan.

Business Basics: Gross Profit and Gross Profit Margin

Your gross profit and gross profit margin are two of the key ingredients in a successful business. Even though revenue is important, your firm’s gross profit is more relevant. In addition, the gross profit margin provides the cash your business needs and it drives the bottom line. Maintaining healthy profit margins on individual sales is critical since one losing product line can have a significant negative impact on your company.

Peer Benchmarking: #1 Tool for Improving Your Business

The reality is, humans have a hard time figuring out what is possible. The interesting thing is, the art of the possible is about envisioning the future, but humans really only move into the future by peeking into the past. It's just the way we work.

Have a “Most Trusted”? An “Incredibly Loyal”? Watch Out!

Scams hide behind smiling faces. These are the words of Phil Mulkins, Tulsa World newspaper Action Line writer, in response to a question about how one might keep oneself from being stung by fraud.

Employee Non-Compete, Non-Solicitation and Anti-Piracy Agreements

Business owners who have non-compete and/or non-solicitation agreements in place with their employees should resist the temptation to place unmerited reliance on their usefulness and enforceability, that is, as a means for protecting against loss that could result from the departure of, and eventual direct competition from, a key employee.

Why Business Owners Should Use a Commercial Insurance Specialist

We live in a world where insurance, liability and risk are all complex. As a result, we've had to become risk specialists. To handle unique, multidimensional risk management needs, business owners should engage a firm that specializes in business risk management and placement of business risk management programs, including insurance.