Business Start-Up Specialist

Business Start-Up Specialist

Mike Montali

Lancaster, PA

Male, 25

I help people set up their businesses in all industries. Since I work with small and start up businesses, most of my clients form LLCs and S-Corporations. I also help people maintain their corporate structures and keep up with the gamut of compliance including meetings and minutes, operating agreements and bylaws, etc.

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Last Answer on May 20, 2013

Best Rated

What advice would you give 2 friends going into business together about how to function together professionally without jeopardizing the friendship?

Asked by dan79 about 5 years ago

My advice would be to have a conversation or series of conversations upfront outlining each person's roles in the business, how decisions will be made, who will get paid what, etc.  You want to go in to the relationship with a solid understanding and a realistic set of expectations.  And as you've probably heard a million times before, you want to document what you agree to in written form.

I think a lot of people are just so excited to get started that they don't take the time to get the procedural matters out of the way first.  Big mistake.  Invest the time to properly sett up your business and get your ducks in a row.

You don't want to be in a situation where one person is doing all the work and the other is juggling a dozen other projects.  I've had that happen to me, and it could have easily been addressed by just talking about what we each plan to put into the business.  There may not end up being any real issues, but nonetheless it's best to avoid any potential doubt or uncertainty. 

Now if one person doesn't live up to those expectations, that's another thing.  You want to plan for situations that may arise when one or both people are dissatisfied with the relationship and wants to move on.  In such cases, what will happen to the business assets?  What will happen to the ownership shares?  You want to document all of these things ahead of time in a partnership agreement or shareholders agreement, depending on the structure of your business.

Another important consideration is how decisions are made.  In 50/50 partnerships, you can find yourelves in a gridlock.  It's best to preempt such problems and agree ahead of time to how the business makes decisions.  A lot of people suggest that you assign final decision-making authority to one person.  I personally prefer to preserve the equal natuer of 50/50 partnerships and allow both people to have equal input, though giving final "tie-breaker" authority to one partner or the other depending on the specific decision.  That way you don't have one person making all the decisions, but rather making decisions for the aspects of the business in which that person specializes (marketing, account management, etc.).  You would go through and assign responsibility and ultimate decision-making authority to each area. 

Now these are just the basic things you should do to prepare for a partnership.  I can tell you that starting and running a business would put strain on any relationship so ultimately it's going to be important that the friendship is resilient and the people involved are reasonable and willing to make sacrafices for the good of the business.

Have any of your clients ever gotten sued and therefore been thankful that their LLC gave them limited personal liability?

Asked by Jabber about 5 years ago

Small businesses lawsuits are a lot more common than you may think.  This infographic shows that 1 in 3 small businesses are sued or threatened with lawsuits in recent years: https://www.boltinsurance.com/news/miscellaneous/small-business-lawsuits-infographic/.

I have had a number of clients who have been sued and many more who have been threatened with lawsuits.  Significant legal expenses aside, the threat of a lawsuit is emotionally taxing on a business owner.  From their perspective, it's tough knowing that one lawsuit could destroy everything they have sacraficed so much to build in their business.  But if their personal liability is not limited, there is a far greater level of concern.

From the feedback I've received from many of my clients, liability protections provide peace of mind in addition to actual risk mitigation.  I have only heard positive feedback that forming a a limited liability entity such as an LLC was the right decision.

You're 25. Do you get a lot of prospective clients who are iffy about working w/you given your young age?

Asked by brikhaus about 5 years ago

I've never had any potential clients make an issue out of my age.  For that I have to thank our company's track record, reputation, testimonials, and endorsements.  Among our clients are professionals of the highest levels including doctors, architects, and engineers.  In fact many of our referrals come from attorneys and accountants who trust us with their clients.

What advice can you give a young black college student. Who wants to start her own business. I like to help people who in need of help. How can I brainstorm to get to the next step after the next start even though I am still in school and work full.

Asked by Alicia almost 2 years ago

 

Is the scenario in The Social Network where Zuckerberg dilutes Eduardo without diluting his own shares realistic, or are there laws to prevent founders from screwing each other like that?

Asked by costa about 5 years ago