Be “In the Know” About Your Business

Readers of The Naples Daily News are familiar with writer Tim Aten and his column, “In the Know.”  One of the most popular pieces that Mr. Aten writes is his annual tabulation of restaurant closings.  This year’s article lists the many restaurants that have closed their doors during 2016 and the various reasons that the owners decided to shut down their business.

When reviewing the article from the perspective of a general counsel attorney, who offers advice and guidance to business owners, I wonder what really happened to each of these businesses.  Could their closings have been prevented?

Some reasons listed in the article are location, issues with leases, menu changes and owner retirement.  There are many closings with no reason listed.  Were those businesses struggling with bad menus, poor location, or bad planning?  The statistics for restaurant closures in Collier County are staggering.  As many as 60% of new restaurants fail in the first year.  Many entrepreneurs blame the wildly fluctuating seasonal population of Naples, where the summer off-season brings unpopulated dining rooms and empty seats to even the most popular venues.  How would we then explain the successful 40% of businesses that make it through their first year, and remain in Naples for 5, 10, and 15 years or more?

Running a restaurant is difficult, time consuming, and risky.  But, a restaurant is a business.  Running a successful business takes planning.  As general counsel to business owners in this community, the attorneys at Blount Law assess and analyze each client’s business in these 4 categories:

  1. Structure:  Businesses can be structured in a variety of ways, including Limited Liability Companies, Sole Proprietorships and Corporations.  The ownership interest or “shares” of a business can also be held multiple ways.  The way your company is structured can affect your liability and taxation.  Many owners spend little time thinking about how their business (or businesses) are structured, and they end up paying a high price for improper organization.
  2. Contracts: Owners often think of contracts only with respect to contracts with their clients.  However, most business owners should also consider the strength and validity of their contracts with key employees and vendors.  Failure to have an enforceable contract with clients, employees, and vendors could result in costly litigation that could cripple your company.
  3. Relationships: Having good relationships with your clients is vital  for the success of your business.  But again, business owners should never overlook relationships with employees and vendors.  These relationships are not always governed by the contracts that you have with them.  Often the relationship dictates the contract, or whether the contract really matters.  Every business owner should identify whether it is the contract, or the relationship itself that dictates the parties’ interactions.  Miscommunications and misunderstandings between your business and your clients, vendors, and employees can lead to disaster.
  4. Risk Points: Often, restaurant and other business owners neglect to identify or consider their risk points.  They are busy enough running the day-to-day operations. Employees call in sick, shipments don’t show up, or equipment breaks down.  It seems as if there is always a fire to put out.  At Blount Law, we have advised many restaurant and other business owners. We have been surprised to find that while they run successful, popular and profitable businesses, many are missing HUGE risk points that could negatively affect them, such as their leases, mortgages, contracts with key employees, and liability for injuries to customers and employees.  Weakness or lack of preparation related to any of these risk points can result in a catastrophe for any business.

At Blount Law, we work with restaurant and other business owners to examine all aspects of their business using this method.  We coordinate with the professionals already involved in the business, including the accountants, insurance agents, bankers, and financial and other advisors to accurately assess the health of the business.  After an extensive business audit, we present a report to the client outlining the businesses strengths and weaknesses, along with advice on eliminating threats and taking advantage of opportunities.  Running a business is stressful and time consuming.  At Blount Law, we take the stress out of entrepreneurship, allowing business owners to return to what they do best.  If you are interested in finding out more about a business audit, call Blount Law, PL today.

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Written by blountlaw