Advising Entrepreneurs: Dynamic Strategies For Financial Growth

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.

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.

Preface.

Part One: The Financial Advisor's Role.

CHAPTER 1: The Regulatory and Ethical Environment.

Duties of a Fiduciary.

Initial Interview.

Compensation Approaches.

Engagement Letter.

Conflicts of Interest.

CHAPTER 2: Financial Management and Planning.

Pre-Start Analysis.

Entrepreneur as Manager.

Evaluating the Enterprise.

Eventual Harvest.

Part Two: Shaping the Venture's Financial Structure.

CHAPTER 3: Using the Tools of the Accountant.

Break-Even Analysis.

Forecasting Models.

Analyzing Financial Statements.

Managing Cash.

Managing Receivables.

Managing Inventory.

Managing Liabilities.

Managing Capital Assets.

CHAPTER 4: Entity Design Choices.

Tax Considerations.

Sole Proprietorship.

Partnership.

Corporation.

Limited Liability Company.

CHAPTER 5: Private Placements.

Federal Exemptions.

Private Placement Memorandum.

CHAPTER 6 Venture Capital.

Venture Capital Marketplace.

Business Plan.

The Venture Capitalist's Valuation Process.

Venture Capital Agreement.

Employment Agreement.

Shareholders' Agreement.

CHAPTER 7: Bank Loans and Debt Alternatives.

Characteristics of Debt.

Sources of Debt Financing.

Creditworthiness.

Types of Loans.

Leasing.

Working Capital Funding.

Selecting a Banker.

Negotiating a Bank Loan.

CHAPTER 8: Government Funding.

Federal, State, and Local Funding Sources.

Small Business Administration.

Other Federal Opportunities.

CHAPTER 9: Joint Ventures and Strategic Alliances.

Alliance Strategies.

Licensing.

Identifying a Strategic Partner.

Working toward a Strategic Alliance Agreement.

Part Three Protecting the Entrepreneur and His or Her Assets.

CHAPTER 10: Risk Management.

Organizational and Operational Considerations.

Developing a Risk Management Agenda.

Insurance Principles.

Insurance Strategy.

Property Insurance.

Liability Insurance.

Insurance Benefits for Employees.

Self-Insurance.

Director and Officer Liability.

Indemnity.

CHAPTER 11: Valuing the Entrepreneurial Venture.

Evaluation Methods.

Valuing Assets.

Valuing Liabilities.

Determining the Purchase Price.

CHAPTER 12: Buy-Sell Designs.

Buy-Sell Agreement.

Triggering Events.

Funding the Buyout.

Stock Redemption or Entity Agreement.

Avoiding Dividend Treatment.

Stock Attribution Rules.

Redemptions to Pay Death Taxes.

Alternative Minimum Tax.

Accumulated Earnings Tax.

Split-Dollar Redemption.

Disadvantages of Redemption.

Cross-Purchase Agreement.

Trusteed Cross-Purchase.

Partnership Cross-Purchase.

Split-Dollar Cross-Purchase.

Wait-and-See Buy-Sell Agreement.

Employee Stock Ownership Plan.

Estate Tax Deferrals.

Premium Allocation.

Valuation.

Transfers for Value.

Combining the Life Insurance Retirement Plan and the Buy-Sell.

S Corporation Buy-Sell Issues.

CHAPTER 13: Asset Protection Strategies.

Ethical Obligations.

Exempt Assets.

Gifting Strategies.

Choice-of-Entity Implications.

Part Four: Compensation Planning for the Entrepreneur and His or Her Employees.

CHAPTER 14: Cash and Deferred Compensation.

Bonuses and Deferred Compensation.

Constructive Dividends.

Company Retirement Plans.

ERISA Compliance.

ERISA for Deferred-Compensation Plans.

ERISA for Split-Dollar and Executive Bonus Plans.

Related Issues: Age and Sex Discrimination.

CHAPTER 15: Equity-Based Compensation.

Stock Options.

Incentive Stock Options.

Nonqualified Stock Options.

Restricted Stock.

Phantom Stock Plans and Stock Appreciation Rights.

Part Five: Managing Capital Events.

CHAPTER 16: Buying or Selling an Entrepreneurial Business.

The Client's Objectives.

Financial Information.

Guidelines for Reviewing Standard Accounting Opinion.

Contracts and Continuing Obligations.

Leases and Properties.

Federal Taxes.

State and Local Taxes.

Internet Domain Names, Patents, Trademarks, Trade Names, and Copyrights.

Permits, Licenses, and Franchises.

Liens, Judgments, and Deeds.

Employee Benefit Plans.

Unemployment Compensation Rating.

Stock Certificates, Options, and Records.

CHAPTER 17: Succession Planning.

Federal Tax Rules.

Tax-Deferral Opportunities.

Valuation Strategies.

Income-Shifting Techniques.

CHAPTER 18: Initial Public Offering.

Public Life.

Preconditions.

Registration Team.

Registration Process.

Nontraditional Alternatives.

Index.