As an entrepreneur, you want to start a business. You know that the first step is to consider drafting a business plan to organize all of your ideas. For this assignment, you will be submitting a business plan for your imaginary business. For research purposes, you can choose any state for the location of your business. Your business plan should include the following:
Introduction of the proposed business/executive summary
The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to attract a potential investor’s interest.
The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it appears first in your business plan.
Identify and describe the type of business entity that is best for your business.
Examples may include: partnership, limited liability company, or corporation, for example. (For purposes of this assignment, you should NOT choose a sole proprietorship for your business entity.)
Defend your choice of business entity (this may include advantages/disadvantages of the selected type of business entity based on your business concept).
Describe the specific legal steps needed to be followed to successfully start the business.
Note: Steps will vary, depending on the type of business you choose and the state in which you are located.
Good sources of research for this area include the following:
Textbooks
Information on the business formation process can be found at http://smallbusiness.findlaw.com/incorporation-and-legal-structures/business-formation-quickstart.html (Links to an external site.). The Small Business Administration website will be helpful; it includes information on how to start a small business.
Recommend and describe an appropriate written agreement for the particular type of entity chosen.
Examples: Articles of incorporation, articles of organization or partnership agreement.
As a reminder, you are to draft your legal entity agreement. Do not use templates found on the internet or elsewhere. The use of these templates will dramatically impact your similarity index score and more importantly, it does not fulfill the requirements of the assignments nor demonstrate your knowledge of the material.
A draft of a valid contract with a vendor, supplier, or customer, for example, that illustrates all elements of a contract and takes into consideration some of the topics discussed in Modules 6 and 7
As a reminder, you are to draft your contract. Do not use templates found on the internet or elsewhere. The use of these templates will dramatically impact your similarity index score and more importantly, it does not fulfill the requirements of the assignments nor demonstrate your knowledge of the material.
Explain potential ethical considerations for your business, including any social responsibility plans or attitudes that your business will embrace.
Describe a possible disagreement that could be encountered among the partners or investors and shareholders. Recommend potential resolutions (referring back to the formal documents, such as the articles of incorporation or the partnership agreement).
Examples could include the introduction of a new product line, borrowing money for expansion, or an advertising campaign.
Determine how the business would be terminated if the disagreement between the board of directors, shareholders, or partners could not be resolved.
Your well-written plan should be eight to ten pages in length, not including the title or references pages. Headings and subheadings may help you organize your work. Include at least four academic or other legitimate sources to support your findings, not including your textbook.
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NEW AGE REMODELING 10
Portfolio Milestone: New Age Remodeling
James Wyatt
New Age Remodeling Business Plan
Executive Summary
The new age remodeling and construction, inc.is a new business involved in remodeling residential and construction of new homes. The company deals with other services, such as roofing and creating new models of kitchen and bathrooms. The business is located in Denver, Colorado, around the enterprise zone and the industrial area of the metro area. I will keep my business relatively small and within the state. Starting a business in Colorado is the best decision considering the fact the state of Colorado holds the most successful small busineses. According to statistics the state of Collorado has employed a million and one peole where most firms hold more than ten employees. My business will follow the trend aand bring positive impacts to the state through offering quality services to clients. The business will hold not more than ten employees hence simple and highly maintained to provide the required service. The main reason that will make the business successful is its location, especially in enhancing convenience and accessibility. The strategic location will support transportation, supply and accessibility of potential clients (Wang, 2019). The business will grow tremendously and within a short period considering the American construction industry is growing rapidly every year. According to recent statistics, between 2008 and 2017, the government provided approximately 6.36% GDP as spending (Wang, 2019) Denver consists of 294,358 households, which will promote business growth due to the availability of potential customers, especially considering that it is located in the Denver enterprise zone.
Type of Business Entity
The business is a limited liability corporation (LLC) that uses a flexible management process and has various advantages, such as pass-through pass-through pass-through taxation and limited liabilities. The limited liability corporation uses the two business methods, partnership business method and corporation business method. The business will protect its clients from personal liabilities in case of an event. The business will secure the client’s asset and prevent loss where, in case of an event, the business will be held accountable for the loss (Wang, 2019). Additionally, the client is protected from claims, such as unsettled debts and in case of a lawsuit. The business is insured hence relieves most personal responsibilities, and ensures personal assets are protected. The business secured business liabilities, by separating personal and work finances, having a correct insurance policy.
Advantages and disadvantages of this type of company
Advantages
Industry Size- The construction industry will continually growing alongside with population levels. Continuous growth will enhance the expansion and development of new projects and practices in the business. The large business will hold many clients and offer more services and employ more workers in the future.
Specialized Industry / Special Skill Sets –My new age remodeling and construction, Inc. will develop and adopt advanced methods and special skills in improving the quality of work and making work easier. The remolding company will have a much more in-depth skill which will cater to the customer with unique needs a large construction company could never provide. The company will use the latest technology, such as human-computer based technology, to offer services, especially when dealing with customers around the area.
Higher earnings- The use of special skills and technology integration will enhance higher earnings for the company. The earning will be generated from clients after paying an added amount of money according to the quality of services and work provided.
Disadvantages
Cost: As the business grows and expands as contributed by population growth, it will require more finances and resources. The resources include human resources and physical resources, such as raw materials. The cost of the materials will go up since the high demand for materials will increase costs and reduce the supply. The company will also require more employees to handle more clients hence require more finances to pay workers.
Legal Issue- According to the United States small business, an attorney must assist in the whole business process and choose a legal structure. Organizations, such as the community economic development clinic, assist in the legal process, which requires finances. Things have changed due to the emergence of information technology, starting and registering a business legally is hard work, especially the LLC (Wang, 2019). Owning this type of business has lots of legal loopholes to jump through, such as obtaining a business license, maintaining a contractor’s license, and any permits needed for the remodel. Obtaining a business license requires one to visit or communicate with Denver excise and licensing to protect it. Other requirements include the FDA, special event sales tax, privilege tax and property tax acquired from the Denver treasury division. Additionally, the licenses should be taken for a recheck to use the license officially. Also, the new age remodeling and construction, Inc. corporation will require various business permits, such as the building permit.
Hard on the Body: In the remodeling and construction industry, health is a variable. I will have to plan for things like injury or even early retirement. My company will require an insurance policy to protect employees and clients in case of accidents (Wang, 2019). The insurance policy will reduce personal responsibility and liabilities covered in the limited liability corporation act. The health insurance will cover for the health of the victim and damages caused.
The legal Steps needed to Start this Business
Starting a limited liability corporation is not a onetime process but follows several steps. First, starting a business is a big financial risk that requires expertise and knowledge. The best part about the LLC is the fact the business protects personal assets from loss. To begin with, deciding a business name is the first step that requires intelligence and originality. A business name should be unique to avoid patent and copyright issues. The business name should be easy to remember and available. Ten steps are required when choosing a business name that begins with making a list of the names and making a business card with the name. Second, search the availability of the business name wherein case the name is used; another name should be selected to avoid copyright.
Register for both Federal and State taxes: After choosing a fictitious business name, registering the business name follows with the federal and state government. Registering LLC business will require filing the article of organization with the state of Colorado and article of incorporation and; limited partnership. According to the partnership principles, a legal name consists of the last names of the partners or the one registered with the state for corporations. Since the business uses the two business methods, deciding a name will depend on the agreement between partners or shareholders. In case the name is fictitious, I am supposed to file an “assumed name certificate” in the Colorado government office. Filling the document is done in the office or department of corporations.
The business name requires trademark protection, which is acquired by filling in with the united states patent and trademark Office (USTOP) or the state of Denver trademark. Besides, an LLC operating agreement should be signed to govern business operations. The LLC operating agreement consists of an ownership share of business co-owners, the share of profits and losses, and the owners’ duties and responsibilities. The operating agreement guards the status of limited personal liability. Before getting the license, an article of the organization is required to collect a business license and permits from the federal government with various requirements, such as a business structure, taxes and employer’s identification numbers, and Colorado’s state government.
Set up a business account: My remodeling and construction companies require a business account. Starting a business account will need a bank account in one of the banks in Colorado to track the expenses of the business. A bookkeeping system, payroll systems, sales tax procedures and obligations, application for funding and re-evaluation. Business accounting will consist of the above requirements, which cover the general role of accounting in the organization. Developing a business accounting requires an expert in economics and accounting to conduct a frequent evaluation and deal with practices, such as the payroll system.
Obtain a Business Insurance: The LLC’s protection on personal liabilities is limited, hence requiring an insurance policy. The business might be required to buy business insurance. The state of Colorado offers general liability insurance covers and business liability insurance Colorado which covers claims and damaging events, such as a fire. The business may also require commercial property insurance covering a wide range of incidents and is suitable for construction and remodeling.
The Appropriate Written Agreement’s for my Remodeling Company.
Services Contracts –Having clients sign a services agreement before beginning the prospective job. There must be clear client expectations; doing this will reduce the possibility of legal clashes. The contact also provides the setting to work out compensation as well as customer expectations.
Lien waivers- A lien waiver is acquired before an issue arises, which resembles a receipt after payments. It is a legal document that is important because it serves as a shield to the business owner to protect them from employees, putting a lean on them for “unpaid work” and saving a lot of time in court. The lien waiver will protect constructors in the remodeling industry from injuries and other contractors. The waiver
Potential Ethical Considerations/Social Responsibility
The business will follow the required social responsibilities and ethical considerations to protects the company from legal issues, develop ethical standards and protect business name and client’s interest (Somachandra, and, Sylva, 2018). Some of the ethical considerations include avoiding overstating and overcharging clients, which damaged companies-client relationships and led to trust issues. The company does not purchase and sell low-quality materials to clients regardless of the availability and original price of the materials. The price stated is reasonable and according to the customer’s affordability.
Our employees are provided with all the necessary safety equipment and clothing, especially during construction. Safety is a top priority in the company, which is extended to clients. In case of damages or incidence, employees are covered by the company’s business insurance (Somachandra, and, Sylva, 2018). The payment terms are per the written and signed agreement as per the requirements of the service contract. In case of changes, the necessary legal process is followed to notify all employees. The company follows the small business association requirements of Colorado, where audit and inspection are done legally. The company does not take bribe from any top government officials since accountability is key. The construction site is safe and follows the Colorado environmental and conservation regulations. Harmful equipment that could hurt employees and clients are well disposed and stored to avoid creating unsightly sites and harming individuals (Somachandra, and, Sylva, 2018). Cover pricing, bid cutting and poor documentation are the most common unethical issues in construction companies.
The remodeling and construction company does not treat contractors unfairly or get involved in any form of negligence. The human resource management does documentation, and in case of payments, receipts are provided with the required information. The Colorado laws regarding business ethics implement long-term, medium- and short-term measures to check and monitor unethical practices (Somachandra, and, Sylva, 2018). Employees receive full payments delivers according to the agreed date, where any delays are communicated earlier. The company does not operate with cash hence deposits all payments in employee’s bank accounts.
Possible Disagreements Among the Partners/Recommend Possible Resolutions.
To avoid conflict, Partner’s goals/values are misaligned with my own. Aligning goals with the partners enhances respect and accountability, where every individual is aware of their responsibilities and expectations (Ferrell, 2020). In case the partner’s concepts are different from the business objectives, the companies consider other alternatives, such as mediating and negotiating to find a solution. In case a partner goes against ethical requirements, the company may suspend or terminate the partner according to the partnership, and LLC agreed on terms and conditions.
Possible solution- The Company offers solutions to any arising issue and conflict considering various aspects. For instance, the company does not set up people with the same power and ownership in decision-making (Ferrell, 2020). To avoid conflict of interest and effective decision making, the company sets up people from different levels and with different authority in the company. (Thurston, 2014).
How the Business Would be Terminated
The business can be dissolved in various ways; one can file a certificate of termination with the state of Colorado after shareholders vote. The business should terminate following the IRS requirements to cease tax obligations. Third, the company will notify all creditors in the company through the mail with a specific deadline for claim submission. The company’s assets are shared among the partners following the required procedure through a tax adviser’s help. The employee’s identification number is closed as the business is terminated, which can be used in the future. The partnership can be solved to another company by trading shares. The end of the company may come to an end according to the partnership agreement developed at the beginning of the business.
Reference
U.S. Census Bureau QuickFacts: Denver County, Colorado. (n.d.). Retrieved from https://www.census.gov/quickfacts/denvercountycolorado
Wang, P. B., & 3, S. (2019, September 03). Construction spending relative to GDP United States 2017. Retrieved from https://www.statista.com/statistics/226361/us-construction-spending-relative-to-gdp/
Somachandra, V., & Sylva, K. (2018). “Ethical management practice” as a csr tool to ensure the corporate sustainability of construction industry: a conceptual review.
Ferrell, J. (2020). TENNESSEE SHOULD INCORPORATE DEFAULT PROVISIONS INTO LLC OPERATING AGREEMENTS TO SAFEGUARD UNSOPHISTICATED PARTIES AND FUTURE GENERATIONS. Transactions: The Tennessee Journal of Business Law, 21(2), 259.
Thurston, P. H. (2014). When Partners Fall Out. Retrieved from https://hbr.org/1986/11/when-partners-fall-out
