In the business entity selection exercise, the writer will explain his idea/vision for the business while identifying legal and regulatory issues to be considered in creating/modifying a business. The author will also advise on which professionals to rely upon for business advice and counsel. Finally, a legal entity choice will be made for the business while providing rationale for the decision.
For the exercise, this author chose Joe's commercial landscaping and tree trimming business. In the past, Joe's Landscaping endured customers who did not pay for services rendered in a timely fashion. For Joe, the owner/operator who supervised a crew of up to 50 employees at a time, collecting delinquent bills was difficult to make a priority. Collection attempts for services rendered became a task that proved a poor return on investment. While most paid for services, many were late, which sometimes made Joe late in paying his own bills.
Joe felt this was a pitfall of running his own business, and instead chose to make performance his top priority. He reasoned he could attract new business by doing an excellent job and thus offset lost income from non/late payment. Joe's company had revenues of $500,000 last year and he hopes to maintain or grow this revenue stream.
The new vision for the business is to obtain contracts by targeting specific corporate clients who can provide steady reliable income, versus standard jobs with large quantities of smaller clients. In the new vision, the company targets corporate campuses, professional building management companies, business parks and upscale residential housing developments. By focusing on dependable clients, the business could forecast earnings and expenses more easily and appropriately adjust workforce to meet workload demand. The expectation is to meet or exceed revenues while reducing customer volume. Under this scenario, securing two major corporate clients...