Class 111 - Thanks to everyone for their participation in class this week as we discussed the legal structure of your company, deciding on a location, and segued into leadership with the YouTube presentation by Simon Sinek. It is all about the “why” in why you do it…The YouTube link can be found on the web page.
Class topic included the pros and cons of the different legal structures in setting up your business, licensing, insurance & permit requirements. These are all important considerations in deciding where and when you will be opening your door. Next week we will continue to discuss more aspects of this topic specific in regard to your daily operations.
The assignment due next week is to write the general business description narrative that you will include in your business plan. You can find some guidance as to what you should include on the syllabus as well as the class power point. It is also time to open the financial template in excel. You should start with pages 3,4,5. Keep in mind that what your write in your narrative will have costs associated and you will need to include these costs in the excel template. The banker will be looking for this specifically. Please share your narrative with your team for feedback. On-campus students, please bring to class to discuss and share.
"Odd" Teams comment by November 29th.
This week topic to comment on is:
· what are your top three considerations in regard to picking a location for your office
· how and where did you gather the data needed to write general business description
· compare and contrast a LLC and Subchapter S Corp
Have a great and grateful Thanksgiving weekend. Alexis
Group 15 (Curtis, Kristal, Joe, Jasmine and Kristen)
ReplyDeleteMy top three considerations in picking my business location are: first would be the general population of the area, I would want at least a population of 20,000 residents. Next would be the population growth of the city (area), obviously a thriving economy and population would be preferrable. Finally and least important to be considered is the amount of chiropractors in the area already. Having other chiropractors around is not a bad thing, but I don't want it to be flooded.
As far as writing a general business description I looked first to my precepting doctor. I am planning on using the same office structure, technique and providing similar services. In a previous class we were assigned to research the different types of firms/legal stuctures. With that, I found that I would like to set up an office as a partnership. Location was fairly simple, I am going to open in the area I am from, which is flurishing non-the-less and a huge business community. I am planning on buying, with the economy where it is and from what I've been told (from my precoptor) it is the way to go at this time.
S-corp vs. LLC
Both has similar formation requirments and costs, which are specific to each state and require a fee. Neither shareholders (S-corp) or members (LLC) are typically held liable. The administrative requirments are minimal for an LLC, where as with a S-corp they are required to elect board officers, have annual meetings and annual report filing. When managing the business members of an LLC can choose the structure they please, where with an S-corp the shareholders elect directors to manage business activities. With term (how long an individual must be with the business), both are pertetual, some states require a fixed amount of time with an LLC. Neither are taxed at the entity level, income passed through shareholders with an S-corp and members with an LLC. Neither have double taxation. With both the salaries are subject to self employment tax, but with an S-corp the shareholder distributions are not. S-corp use tax form 1120S, shareholders get K-1 for personal tax returns. The LLC when only having one member uses the form 1040-schedule C and with partnership uses form 1065 with members getting a K-1. Overall, the ease of operation is beter with a LLC, though some states may have different requirments. With an S-corp they must have annual meetings, director meetings, corporate meetings and stockholder meetings.
Group 15 (Curtis, Kristal, Joe, Jasmine and Kristen)
ReplyDeleteMy top three considerations in picking my business location are: first would be the general population of the area, I would want at least a population of 20,000 residents. Next would be the population growth of the city (area), obviously a thriving economy and population would be preferrable. Finally and least important to be considered is the amount of chiropractors in the area already. Having other chiropractors around is not a bad thing, but I don't want it to be flooded.
As far as writing a general business description I looked first to my precepting doctor. I am planning on using the same office structure, technique and providing similar services. In a previous class we were assigned to research the different types of firms/legal stuctures. With that, I found that I would like to set up an office as a partnership. Location was fairly simple, I am going to open in the area I am from, which is flurishing non-the-less and a huge business community. I am planning on buying, with the economy where it is and from what I've been told (from my precoptor) it is the way to go at this time.
S-corp vs. LLC
Both has similar formation requirments and costs, which are specific to each state and require a fee. Neither shareholders (S-corp) or members (LLC) are typically held liable. The administrative requirments are minimal for an LLC, where as with a S-corp they are required to elect board officers, have annual meetings and annual report filing. When managing the business members of an LLC can choose the structure they please, where with an S-corp the shareholders elect directors to manage business activities. With term (how long an individual must be with the business), both are pertetual, some states require a fixed amount of time with an LLC. Neither are taxed at the entity level, income passed through shareholders with an S-corp and members with an LLC. Neither have double taxation. With both the salaries are subject to self employment tax, but with an S-corp the shareholder distributions are not. S-corp use tax form 1120S, shareholders get K-1 for personal tax returns. The LLC when only having one member uses the form 1040-schedule C and with partnership uses form 1065 with members getting a K-1. Overall, the ease of operation is beter with a LLC, though some states may have different requirments. With an S-corp they must have annual meetings, director meetings, corporate meetings and stockholder meetings.
Group 23 b
ReplyDelete- Our top three considerations in picking business location were: #1. Demographics, which would allow to target the specific area of the town with highest number of potential patients. #2.The traffic patterns and location that is easy to find with recognizable streets. #3. The third consideration we were looking at was the amount of chiropractors that are in the area.
- Since i am going to associate with another chiropractor and eventually buy his existing practice, i decided to use the same office structure.
- Both subchapter S corporation, and LLC are most commont types of a company, and both have benefits and some disadvantages. The LLC is the type of corporation in which the owners are the members of the business. In contrast, subchapter S is composed of owners that are "shareholders". Moreover, an S corporation allows "no more than 100 shareholders that must be resident aliens or U.S. citizens." In contrast, LLC allows unlimited number of owners. Also, in contrast to LLC that indicates the way in which "profits and losses are allocated", an S corporation distribut profits based on financial contribution made to the business. Also, another difference is that S corporaction must hold "annual meetings, record company meetings, as well as file annual reports at the close of the fiscal year". (www.ehow.com/about_6503895_sub-vs_-limited-liability-company.html).
Group 27
ReplyDeleteThe top three considerations in picking a business location is just that...location. It's imperative to have your business in a beneficial location for the movement of growth and success. This location needs to be well seen within the city, in a area that is still up and coming but also has businesses that have been successful for years. Lastly, the business needs to have easy accessibility and traffic flow ( foot traffic ) It's essential in any business to be successful, therefore the location of your business needs to provide you with the stepping stones of that growth and development.
For the general business description, I am precepting with a doctor that I look up to and admire. The possibilities with his business are endless. I am planning on being an associate with this particular doctor. I agree with his philosophies, his general practice and his general business description. I'm looking forward to the future.
Both S-corp and LLC are very similar. A S-Corp provides little financial liability in which the owner is held responsible for. It's also imperative to know that the S-Corp is created through the IRS tax election, which implies that a business or corporation can dismiss double the taxation by choosing to be a S-Corp.
(http://business.sba.gov/register/incorporation/s-corporation/) LLC is very similar to the above statement of a S-Corp however, it is designed to give little liability of a corporation or business and tax accommodations and flexibility. In this, most people are referred to as members not owners. Most importantly, an LLC passes the profits and losses to each member, not just solely the business. The members will have to report their losses and profit on their federal tax return. (http://business.sba.gov/register/incorporation/llc/)
Team 9 (Brad, Jeremy, Andrew, Joseph, Kyle)
ReplyDelete• what are your top three considerations in regard to picking a location for your office?
Our top three consideration in regard to picking a location for our office is the population to chiropractor ratio, median age of the population, and median house hold income. With these three components we can see if the economy is at a increase or decrease. If there are many young professionals within this population one can see an increase in population projections. Another important component is visibility of the office.
• how and where did you gather the data needed to write general business description?
I have shadowed many doctors in the past year and asked many questions pertaining to their practice. I have picked and chosen what would work for my business. I have also looked at many chiropractic websites and have gotten ideas. Depending on the specialties I would like to work with (athletes, children, elderly, PI, etc…) I took many notes on their job descriptions that was on their websites.
• compare and contrast a LLC and Subchapter S Corp?
Both LLC and S Corp are very similar in that both offer liability protection. Each shield the owners company liabilities from the owners personal assets. Both are similar entities for tax purposes in that they are both except from double taxation. An LLC is very flexible in ownership in that there are no restrictions on the ownership. A S Corp must follow specific guidelines specified by a board of directors or shareholders appointed. They must have annual meetings about guidelines. LLC can distribute profit where he/she feels is the best fit.
Group 1 (Taylor, Sara, Joe, Jeremy, Ashley) The population of the town and the surrounding area, is it a place that I would like to live and raise my family, and how many chiropractors already exist in the town and surrounding area.
ReplyDeleteI talked about it with my Preceptor and other various chiropractors that I have made connections with. I have shadowed many offices that employ different techniques and styles and have chosen the ones that fit my personality best and what I want to accomplish in my own office. I have also done personal research deciding what particular niche I want to cover in my community.
Both are viewed as separate legal entities for both taxes and the legal system. Also, neither put you in the category of double taxation as do some corporations. An LLC can select varying forms of profit distribution where and S Corp cannot. LLC requires no mandated meetings, minutes requirements, and resolution of problems are easier to obtain, but S Corps have these requirements and other required administrative tasks. In an S Corp you need a board of directors and other appointed position where an LLC you assign roles in the company as necessary. All the profits and losses of and LLC go to the owners. S Corps must have at least 75 share holders where an LLC has an unlimited number. LLC will dissolve if a member dies, but an S Corp an live forever.
Group 13 [Adam Van Gessel, Dan Synowicki, Eric Carpenter, Rachel Berent, Jeff Elmore]
ReplyDeleteUnfortunately, in a competitive market we would be fools to limit ourselves to only 3 considerations so we expounded on three areas of concern. Ideally we would narrow our choices down and then make our decision based on what makes the best business sense rather than an emotional decision.
#1) Location (physical address)
a. Is the physical address in a strip mall, free standing building, Duplex/Triplex, professional office building or other
b. Is the physical location on a main thoroughfare or a side street and condition of adjacent buildings
c. How old is the building, how old is the neighborhood
-are there any legal issues with opening a practice at this location (zoning, structural integrity, health issues, etc.)
d. Is the area around the physical address residential or commercial
e. Is there space for a sign; what size and type allowed?
f. How many parking spaces are available and is there easy access to the location
#2) Location (size and cost)
a. Is the property large enough to grow into?
-Square footage
-Dimensions: Is there any existing build out? Will the existing build out accommodate your practice? Is there a build out allowance?
-Monthly base rent/total rent
b.What is the term of the lease. Are there lease renewal options?
#3) Location (demographic information)
a.Population
b.Number of DC’s in the town, in the drawing area and in a 3mile radius
c.What is the income level of the surrounding area
d.What is the major age bracket of the area residents
General business description
We all have gathered our data from personal resources as well as school assignments and class discussions. Some of the personal resources have included preceptor Doctors, Doctors “back home”, personal Doctors, friends who are business owners, and practice management companies. Essentially we all have our own opinion on our ideal business and every one’s ideal practice will vary depending on personal goals and standards.
LLC vs. S-Corp
The following outlines the major similarities and differences between a LLC and an S-Corp that we found and put in a chart form for a more easy review according to the US Small Business Administration:
S Corporation:
Liability Protection (personal assets protection)-Yes
Operational Control (who is responsible for operating the business)-Board of Directors/Officers
Federal Income Tax pass through-yes
(business profits/losses are not taxed to the business, but are passed through to the individual owners to be reported on their individual tax returns)
Flexibility/Ease of Operation- Subject to some formalities & record keeping laws as C corps
(decision making, formal record keeping requirements, minutes record keeping required)
Life of entity- Is own entity, like traditional corporation
Ownership Restrictions-Yes
Flexibility in Profit-Sharing- No
Employment Tax- Employment/payroll tax on salary; no employment tax on dividends paid to shareholders
Limited Liability Company
Liability Protection (personal assets protection)-Yes
Operational Control (who is responsible for operating the business)-May be member-managed or manager-managed
Federal Income Tax pass through-yes
(business profits/losses are not taxed to the business, but are passed through to the individual owners to be reported on their individual tax returns)
Flexibility/Ease of Operation- Easier operating rules, more flexibility
(decision making, formal record keeping requirements, minutes record keeping required)
Life of entity- Will dissolve with death or bankruptcy of one member
Ownership Restrictions-No
Flexibility in Profit-Sharing- Yes
Employment Tax- Self-employment tax on total net income, regardless of what actual salary is (entire net income is taxed, not just salary paid)
Group 31- Johanna, Kyle, Dan, Catherine, Kyle
ReplyDeleteFor me the top three considerations of deciding on a location were 1. an area where I can see myself staying for at least 30 years, or better said, a place where I feel at home, even when times are not that great 2. an area that is not directly threatened by the economy and shows at least a potential for growth and stability and 3. the amount of health care provided in the area in general. Overflow of chiropractors as well as a very medically oriented cities might just be a lot harder to get established in no matter what level of skills one possesses.
My resources for my business description are mainly from the office where I precept in, the doctors couple runs an office model that I can see myself very much use in the same way. The way i would open an office in the states would probably be to try to open up something myself AFTER working with an established doctor for at least 2 years. Then probably buy and open as a ownership if necessary, preferably partnership though. The information about different models is from undergrad classes.
An LLC blends partnerships and corporate structures, limiting the amount of liability to the owner or partnership while having access to the benefits of a corporation. The LLC does not require you to have meetings and can have as many owners or members as they see fit. Neither of the LLC or S Corp are under double taxation, and both limit the amount of liability of the shareholders/owners. S Corps must have assigned board members, no more than 100 shareholders. S Corp must have annual meetings. Profits and debts are distributed proportionately to the amount of interest in the company.
Team 19 (Amarillas, Guler, Lorek, Nam, Yard)
ReplyDeleteOur Top 3 considerations for opening an office is: 1.) the population of the area that fits each one of our needs. 2.) An economically stable area or an area of new growth 3.) A great area that we can raise our families in.
When writing a general business description we looked to the variety of doctors that we have shadowed and our clinic doctors that have practiced outside of the clinic. We have also taken information from the various seminars that we have attended. Since each one of us is different we have picked and chosen aspects that fit each one of our individual personalities and goals.
LLC and S corporations are similar in that they are both classified as “pass through” tax entities meaning that the income is given to the owners and is reported on the owners’ personal taxes; thus avoiding double taxation. LLC offers an easy way to operate the company, no restrictions on ownership and can have any structure the owner wants. Whereas, an S Corporation has no more than 75 shareholders and must follow certain formalities and record keeping procedures. With LLC and S Corporation there are formation requirements and cost that are specific to each state. Also, each doesn’t have any liability for their members or shareholders.
Group 25( Brady Pearson, Carrie Jo. Calisesi, Josh Fothergill, Ryan Pribble and Tom Cotter)
ReplyDelete1.) The three most important factors to consider when choosing a location for an office include:
-Easy to access and give directions to new patients
-No current or future road construction planned that would limit or restrict access to the office
-Choose a city that is growing and receptive to chiropractic care
2.) How and where did we gather data for our general business description?
-We gathered data from personal, online and written sources. Personal sources include three chiropractors that have constructed business plans in the past, and also a local bank. The online sources include websites with descriptions on “How to write a business description.” Also, written sources include informational books on how to start a business, and mistakes to avoid when writing a business plan.
3.) Compare and contrast LLC and S-Corporation:
-Both LLC and S-Corps offer liability protection in the event of a lawsuit. For example, the owner cannot be held personally responsible for the company’s debts. Both the LLC and S-Corp avoid double taxation as compared to the C-corp. If one is looking for ease and flexibility is a priority, the limited liability would be the better option. An S-Corp cannot have more than 75 shareholders and must hold regular meetings. An S-Corp does not have flexibility on how profits are split up amongst owners whereas an LLC does. The profits must be distributed proportional to the shareholder’s percentage of ownership. An S-Corp can save on employment tax because tax is only paid on the salary paid to the employee.
Group 11 (Mariah Kay, Bonnie Harder, Mandy VanNatta, Laura Nash, Danielle Partain)
ReplyDeleteWhat are your top three considerations in regard to picking a location for your office.
Demographics- so you know you will have patients
Visibility – easy to find so that your patients will show up or a designed vehicle so that when you pull in the driveway there is no question by your logo and company name what you are there for
Competition – not having them close by or at least looking at a different market than the competition
How and where did you gather the data needed to write general business description?
We have job shadowed different chiropractors, visited different websites like “Starting into Practice,” some of us are currently learning from our preceptors. I have utilized Score.org and the personal seminars for general business knowledge and set-up and find they are very helpful.
Compare and contrast a LLC and Subchapter S Corp.
LLC – Increased access to capital in proportion to the number of members.
S Corp – Increased access to capital in proportion to the number of shareholders.
LLC- controlled by members or by a manager
S Corp- controlled by officers and directors that share control and shareholders are not involved.
LLC – Members’ liability is limited to the amount invested with no personal liability for business debt
S Corp – Owners’ liability is limited to the amount invested with no personal liability for business debt
LLC- profits and losses are recorded in each member’s personal tax returns, the business itself is not taxed
S Corp – no double taxation and treated similar to a partnership when it comes to taxes
Reference: Toby, Milton C. The Complete Equine Legal and Business Handbook. Blood-Horse Publications. 2007.
Group 5 (Joshua Jorde, Jeanette Fotang, Adam Miller, Michael Lane)
ReplyDeleteLocal demographics are most important in choosing an office location for us because it can ultimately shape the way we target our advertising as well as the way we most commonly practice.
This is followed by amount of competition not just in terms of the number of chiropractors in general, but also the number who practice the same techniques.
Finally, we should also consider a population center where we can see ourselves living for a number of years.
We primarily gathered date on how for writing a general business description from internet sites including examples from chiropractic sites as well as those of other businesses and also from various 'start your own practice' sites. Also, some of us have more direct experience from shadowing and preceptoring with chiropractors in the field and observing their businesses and reviewing their descriptions.
Most of the similarities between S corps and LLCs have to do with the way they are taxed which is similar to partnerships on individual levels rather than corporate levels. Also, liability in both is limited for each individual only to the amount invested.
The differences, however, are the an LLC is able to have a rather simple management setup requiring only the members and/or a manager while an S corp requires directors, officers, and shareholders. Related to this is that there are certain additional requirements in an S corp to keep it from being classified as a C corp while an LLC will remain as such until members themselves decide to reclassify it.
Group 13 [Adam Van Gessel, Dan Synowicki, Eric Carpenter, Rachel Berent, Jeff Elmore]
ReplyDeleteUnfortunately, in a competitive market we would be fools to limit ourselves to only 3 considerations so we expounded on three areas of concern. Ideally we would narrow our choices down and then make our decision based on what makes the best business sense rather than an emotional decision.
#1) Location (physical address)
a. Is the physical address in a strip mall, free standing building, Duplex/Triplex, professional office building or other
b. Is the physical location on a main thoroughfare or a side street and condition of adjacent buildings
c. How old is the building, how old is the neighborhood
-are there any legal issues with opening a practice at this location (zoning, structural integrity, health issues, etc.)
d. Is the area around the physical address residential or commercial
e. Is there space for a sign; what size and type allowed?
f. How many parking spaces are available and is there easy access to the location
#2) Location (size and cost)
a. Is the property large enough to grow into?
-Square footage
-Dimensions: Is there any existing build out? Will the existing build out accommodate your practice? Is there a build out allowance?
-Monthly base rent/total rent
b.What is the term of the lease. Are there lease renewal options?
#3) Location (demographic information)
a.Population
b.Number of DC’s in the town, in the drawing area and in a 3mile radius
c.What is the income level of the surrounding area
d.What is the major age bracket of the area residents
General business description
We all have gathered our data from personal resources as well as school assignments and class discussions. Some of the personal resources have included preceptor Doctors, Doctors “back home”, personal Doctors, friends who are business owners, and practice management companies. Essentially we all have our own opinion on our ideal business and every one’s ideal practice will vary depending on personal goals and standards.
LLC vs. S-Corp
The following outlines the major similarities and differences between a LLC and an S-Corp that we found and put in a chart form for a more easy review according to the US Small Business Administration:
S Corporation:
⁃ Liability Protection (personal assets protection)-Yes
⁃ Operational Control (who is responsible for operating the business)-Board of Directors/Officers
⁃ Federal Income Tax pass through-yes
(business profits/losses are not taxed to the business, but are passed through to the individual owners to be reported on their individual tax returns)
⁃ Flexibility/Ease of Operation- Subject to some formalities & record keeping laws as C corps
(decision making, formal record keeping requirements, minutes record keeping required)
⁃ Life of entity- Is own entity, like traditional corporation
⁃ Ownership Restrictions-Yes
⁃ Flexibility in Profit-Sharing- No
⁃ Employment Tax- Employment/payroll tax on salary; no employment tax on dividends paid to shareholders
Limited Liability Company
⁃ Liability Protection (personal assets protection)-Yes
⁃ Operational Control (who is responsible for operating the business)-May be member-managed or manager-managed
⁃ Federal Income Tax pass through-yes
(business profits/losses are not taxed to the business, but are passed through to the individual owners to be reported on their individual tax returns)
⁃ Flexibility/Ease of Operation- Easier operating rules, more flexibility
(decision making, formal record keeping requirements, minutes record keeping required)
⁃ Life of entity- Will dissolve with death or bankruptcy of one member
⁃ Ownership Restrictions-No
⁃ Flexibility in Profit-Sharing- Yes
⁃ Employment Tax- Self-employment tax on total net income, regardless of what actual salary is (entire net income is taxed, not just salary paid)
Group 21
ReplyDeleteLooking for a location that has reasonable access but with relatively low overhead costs to start with (can always expand later). Someplace that is near both residential and downtown perhaps on the edge of a downtown area to have easy access and relatively close neighborhood access. Finally how close are other chiropractors and what do they do, don't really want to open up in the same strip mall etc.
I would interview my mentor and look for several outside sources in gaining a broad spectrum of resources in putting together a business description. I would also consult the chamber of commerce in the city I decided on.
In speaking about LLC's and S corps the similarities as I see it are that in both profits are streamlined through to the owners/investors with no taxation to be taxed on their personal income and they both have a limited liability for the individual based on the investment amount. The differences are that LLC has more ease in setting up management requiring only members or a manager to run things. In an S- corp there is required meetings with shareholders, officers, and directors and there is little flexibility on how profits are split as opposed to an LLC.
Group 3
ReplyDeleteWhen looking for a location first thing would be is it a place I would want to live, not just practice in, but live in. Another important consideration is how many chiropractors are currently practicing in the area and what type of practices do they have. Finally, once the city has been narrowed down, is there easy access to the building in which the practice would be in.
Information about writing a business description was gathered from shadowing current chiropractors and from talking with friends who have recently graduated.
Similarities between LLC's and S corps include filing taxes on the owners personal income tax ("Pass-through Taxation"). Another similarity is that in both practices you are not personally responsible for for debts and liabilities
(Team 7 Brock Auten, Sally Loos, Adam Moeller, Barry Moon, Tanya Bindl)
ReplyDeleteLooking for a location is a critical process for success. 1) Demograpgics 2) desirable living condition 3)Economy trends.
Demographics is important because you need to know how many people live in an area verus number of chiropractors. Also, the age breakdown per age group. It is important to know what the major jobs are in area such as factories versus desk jobs.
To work in area you have to enjoy the area. A good question to ask yourself is what part of the community do you want to connect with? For example, Do you want to live in a city, suburb, the country or small town. Depending on how many patients you want to see could determine where you want to set up practice. Economy trends is imortant to tell you if the community is a growing one or shrinking one.
We would gather information for business plan by shadowing other Doctors in similar communities and by talking to collegues.
LLC and S Corp are similiar in liability issues such as lawsuits. Both are also exempt from being double taxed. They are different because LLC are relatively new and not available in all states unlike S Corps. S Corp also do not pay any federal income taxes unlike LLC.