It was recently brought to my attention that a certain financial author is preaching to business owners that “slow and steady wins the race.” While there might be some truth to this it does not take into account who the business owner is and what is that business owner’s end goal. These are important factors to take into account when determining what pace is right for your Michigan business.
It should be noted that the individual delivering this message filed for bankruptcy protection and two decades later has a net worth estimated around $55 million. I am sure any business owner would like that kind of slow and steady growth.
Different Types of Business Owners
If you are a business owner that is looking to create a job for yourself, then the slow and steady approach works great. You do not take on a lot of risk. You generally control of your own destiny for years to come. The slow and steady approach is conservative and generally is sustainable for the goal you are looking to accomplish. You likely will not grow your West Michigan business into a Midwest, National or International business, but you likely will have what most consider a nice lifestyle business.
Single-member limited liability companies are very common in Michigan. Most small business owners operate under this type of business entity. Some are even able to navigate the confusing system that the State of Michigan has set up on their own and been able to file their articles of organization and become a registered limited liability company or LLC with the State. So your personal assets are protected now, right?
Ummmm… Maybe. Look here is the deal: A creditor’s attorney is going look for any hole in your business entities shield and try and expose it, and because of that if all you have done is filed a document with the State and paid a filing fee, he is not just say, “Oh well, I guess there is no way this business owner is personally liable” and move on. So what do you need to do to close up those holes? Here are a few DO’s, DON’T’s, and RECOMMENDATIONS.
Contracts are a major part of doing business. Businesses have contracts with customers, suppliers, contractors, employees, and even those among owners and the company. Whether your business deals with a lot of these transactions or just a few major transactions, it’s important that the contracts you are executing are drafted correctly.
So how do you review a contract to make sure it contains everything you need it to so you can protect your business? That is a very loaded question because while contracts are simple in nature (“an offer that is accepted”) there are complexities that can cause major issues. I often tell clients they could draft 80% of the agreement that I draft for them; it’s that other 20% that causes problems for them. There are 5 basic things that you should look for in a contract: 1) Parties; 2) Price; 3) Payment Terms; 4) Property; and 5) Signatures.
When starting a West Michigan small business you plan everything out. When trying to grow your small business you put available funds toward advisers such as coaches, marketers, consultants, and branders that allow you to see that growth. When small businesses are planning and growing they don’t consider a customer not paying for an order, a product injuring someone, an employee stealing business from you, or even another business you are working with not following through with their duties. These issues are very common for small businesses and most are taken by surprise when they creep up. So you are involved in a dispute, what do you do?
While most small business owners are very used to wearing multiple hats in the running of the business, the first lesson that should be learned if your small business is involved with a lawsuit is that you cannot represent your company in court. Unless you have passed the Michigan Bar Exam you are not permitted to practice law in the State of Michigan. Going before any court and representing your small business is considered practicing law, so you are going to need to hire a lawyer to represent your business.
Every small business owner loves the idea of expanding their business. Whether they are increasing operations, expanding to a new location or just taking on larger orders, expanding is directly associated with success. While these times can be very exciting and gratifying, there needs to be some considerations before plowing forward with your business’ plans to get bigger.
New Holland Brewery has scaled back its plans to expand from just its Holland location to a second spot in Downtown Grand Rapids. Michigan’s third largest microbrewery is delaying the move because they want to find the right situation before pulling the trigger. New Holland president Brett VanderKamp said that finding the right location and the state’s liquor code, which specifies that microbreweries producing more than 30,000 barrels per year are limited in the number of taprooms they can have, are the two biggest factors. New Holland’s current location is currently trying to complete an expansion and it will be right about that 30,000 barrel mark once complete.
Craft brewing is a growing trend that appears to have no ceiling on it. Many home brewers take painstaking steps to create some tasty concoctions. Out of this popular hobby there has been a large influx in people that are taking their hobby to the next level and turning it into a business.
Grand Rapids was named Beer City USA last year and that is in addition to the great number of other West Michigan cities that have seen craft breweries pop up. Pigeon Hill Brewing Co. joined the fray when it announced that it will be moving into the Noble Building in Muskegon, Michigan earlier this week. Pigeon Hill Brewing Co. plans on beginning its construction within the next month and is hoping to be open for business before the end of the year.
Business and real estate seem to go hand in hand. Many businesses revolve around real estate. Relators, landlords, brokers, inspectors, and assessors are professions that would not exist without real estate. The list is even more extensive to business that loosely rely on real estate. But what about all the Grand Rapids manufacturers, retailers, restaurateurs, office workers, art venues, etc.? Those types of businesses are generally not directly or loosely associated with real estate but they need some place to operate.
Those in the West Michigan are well aware that the Big Old Building (more commonly known as the B.O.B.) is planning a massive expansion. This multi-million dollar expansion will create a new outdoor festival marketplace, including the biergarten, as part of a 40,000 square foot outdoor piazza in addition to a two story, 22,000 square foot event and concert venue that can seat 1,500, with standing room for 500 more.