J.K. Lasser Pro Advising Entrepreneurs – Dynamic Strategies for Financial Growth

<p>Preface xiii</p>
<p>Part One The Financial Advisor s Role 1</p>
<p>CHAPTER 1 The Regulatory and Ethical Environment 3</p>
<p>Duties of a Fiduciary 4</p>
<p>Initial Interview 6</p>
<p>Compensation Approaches 7</p>
<p>Engagement Letter 9</p>
<p>Conflicts of Interest 10</p>
<p>CHAPTER 2 Financial Management and Planning 13</p>
<p>Pre–Start Analysis 14</p>
<p>Entrepreneur as Manager 16</p>
<p>Evaluating the Enterprise 19</p>
<p>Eventual Harvest 24</p>
<p>Part Two Shaping the Venture s Financial Structure 27</p>
<p>CHAPTER 3 Using the Tools of the Accountant 29</p>
<p>Break–Even Analysis 29</p>
<p>Forecasting Models 31</p>
<p>Analyzing Financial Statements 32</p>
<p>Managing Cash 37</p>
<p>Managing Receivables 41</p>
<p>Managing Inventory 43</p>
<p>Managing Liabilities 44</p>
<p>Managing Capital Assets 46</p>
<p>CHAPTER 4 Entity Design Choices 49</p>
<p>Tax Considerations 50</p>
<p>Sole Proprietorship 51</p>
<p>Partnership 52</p>
<p>Corporation 56</p>
<p>Limited Liability Company 64</p>
<p>CHAPTER 5 Private Placements 69</p>
<p>Federal Exemptions 70</p>
<p>Private Placement Memorandum 74</p>
<p>CHAPTER 6 Venture Capital 77</p>
<p>Venture Capital Marketplace 78</p>
<p>Business Plan 79</p>
<p>The Venture Capitalist s Valuation Process 80</p>
<p>Venture Capital Agreement 82</p>
<p>Employment Agreement 83</p>
<p>Shareholders Agreement 84</p>
<p>CHAPTER 7 Bank Loans and Debt Alternatives 87</p>
<p>Characteristics of Debt 87</p>
<p>Sources of Debt Financing 88</p>
<p>Creditworthiness 90</p>
<p>Types of Loans 91</p>
<p>Leasing 92</p>
<p>Working Capital Funding 92</p>
<p>Selecting a Banker 95</p>
<p>Negotiating a Bank Loan 97</p>
<p>CHAPTER 8 Government Funding 101</p>
<p>Federal, State, and Local Funding Sources 102</p>
<p>Small Business Administration 104</p>
<p>Other Federal Opportunities 108</p>
<p>CHAPTER 9 Joint Ventures and Strategic Alliances 111</p>
<p>Alliance Strategies 112</p>
<p>Licensing 114</p>
<p>Identifying a Strategic Partner 115</p>
<p>Working toward a Strategic Alliance Agreement 116</p>
<p>Part Three Protecting the Entrepreneur and His or Her Assets 123</p>
<p>CHAPTER 10 Risk Management 125</p>
<p>Organizational and Operational Considerations 125</p>
<p>Developing a Risk Management Agenda 127</p>
<p>Insurance Principles 127</p>
<p>Insurance Strategy 129</p>
<p>Property Insurance 131</p>
<p>Liability Insurance 133</p>
<p>Insurance Benefits for Employees 135</p>
<p>Self–Insurance 137</p>
<p>Director and Officer Liability 139</p>
<p>Indemnity 142</p>
<p>CHAPTER 11 Valuing the Entrepreneurial Venture 145</p>
<p>Evaluation Methods 146</p>
<p>Valuing Assets 148</p>
<p>Valuing Liabilities 156</p>
<p>Determining the Purchase Price 158</p>
<p>CHAPTER 12 Buy–Sell Designs 167</p>
<p>Buy–Sell Agreement 168</p>
<p>Triggering Events 168</p>
<p>Funding the Buyout 169</p>
<p>Stock Redemption or Entity Agreement 170</p>
<p>Avoiding Dividend Treatment 171</p>
<p>Stock Attribution Rules 174</p>
<p>Redemptions to Pay Death Taxes 176</p>
<p>Alternative Minimum Tax 177</p>
<p>Accumulated Earnings Tax 178</p>
<p>Split–Dollar Redemption 180</p>
<p>Disadvantages of Redemption 180</p>
<p>Cross–Purchase Agreement 181</p>
<p>Trusteed Cross–Purchase 182</p>
<p>Partnership Cross–Purchase 184</p>
<p>Split–Dollar Cross–Purchase 185</p>
<p>Wait–and–See Buy–Sell Agreement 188</p>
<p>Employee Stock Ownership Plan 189</p>
<p>Estate Tax Deferrals 191</p>
<p>Premium Allocation 192</p>
<p>Valuation 192</p>
<p>Transfers for Value 195</p>
<p>Combining the Life Insurance Retirement Plan and the Buy–Sell 198</p>
<p>S Corporation Buy–Sell Issues 199</p>
<p>CHAPTER 13 Asset Protection Strategies 201</p>
<p>Ethical Obligations 201</p>
<p>Exempt Assets 203</p>
<p>Gifting Strategies 204</p>
<p>Choice–of–Entity Implications 205</p>
<p>Part Four Compensation Planning for the Entrepreneur and His or Her Employees 211</p>
<p>CHAPTER 14 Cash and Deferred Compensation 213</p>
<p>Bonuses and Deferred Compensation 214</p>
<p>Constructive Dividends 215</p>
<p>Company Retirement Plans 217</p>
<p>ERISA Compliance 222</p>
<p>ERISA for Deferred–Compensation Plans 235</p>
<p>ERISA for Split–Dollar and Executive Bonus Plans 242</p>
<p>Related Issues: Age and Sex Discrimination 247</p>
<p>CHAPTER 15 Equity–Based Compensation 251</p>
<p>Stock Options 252</p>
<p>Incentive Stock Options 252</p>
<p>Nonqualified Stock Options 254</p>
<p>Restricted Stock 258</p>
<p>Phantom Stock Plans and Stock Appreciation Rights 259</p>
<p>Part Five Managing Capital Events 261</p>
<p>CHAPTER 16 Buying or Selling an Entrepreneurial Business 263</p>
<p>The Client s Objectives 263</p>
<p>Financial Information 266</p>
<p>Guidelines for Reviewing Standard Accounting Opinion 268</p>
<p>Contracts and Continuing Obligations 271</p>
<p>Leases and Properties 273</p>
<p>Federal Taxes 276</p>
<p>State and Local Taxes 278</p>
<p>Internet Domain Names, Patents, Trademarks, Trade Names, and Copyrights 280</p>
<p>Permits, Licenses, and Franchises 281</p>
<p>Liens, Judgments, and Deeds 281</p>
<p>Employee Benefit Plans 282</p>
<p>Unemployment Compensation Rating 282</p>
<p>Stock Certificates, Options, and Records 283</p>
<p>CHAPTER 17 Succession Planning 289</p>
<p>Federal Tax Rules 290</p>
<p>Tax–Deferral Opportunities 291</p>
<p>Valuation Strategies 292</p>
<p>Income–Shifting Techniques 293</p>
<p>CHAPTER 18 Initial Public Offering 303</p>
<p>Public Life 303</p>
<p>Preconditions 305</p>
<p>Registration Team 306</p>
<p>Registration Process 307</p>
<p>Nontraditional Alternatives 310</p>
<p>Index 313</p>