Is your business or non-profit structured properly? Is it built on a solid foundation?
These seem like simple enough questions. You set up your business or non-profit, and as far as you know, things are going smoothly (or at least as smoothly as they can be in the world of entrepreneurship). But what problems might be lurking just beneath the surface?
Have Articles of Organization or Incorporation been filed?
Seriously, if you don’t know, go check your state’s database right now. If you’re thinking about forming a subsidiary or social enterprise or just a new venture all together, get established with the Secretary of State before you do anything else.
Do you have an operating agreement or bylaws in place?
Perhaps more importantly, is the document up-to-date? Does it truly reflect how you operate? When was the last time you had it reviewed by an attorney? Laws change, and banks are becoming increasingly demanding when it comes to what they expect to see in your governing documents.
If you have business partners, these documents are even more critical. So many of the disputes that we see between business partners can be summed up pretty easily: either there wasn’t an agreement in the first place or no one was actually following the agreement.
Do you have a written business or strategic plan?
I always tell people that I work harder running this law firm than I ever did while employed for someone else. There’s a ton of stuff to keep track of (on top of doing the actual work): clarifying your target market, studying how you compare to your competition, identifying the big picture, defining your strengths and weaknesses, updating your marketing and sales plans, focusing on your best products and services, cleaning up operational or administrative issues, improving the organization’s finances, developing your staff and leadership team, and on and on and on. There’s simply no way to keep it all in your head.
Are you planning to share the business or strategic plan with others?
Perhaps you’ll be seeking new investors this year or entering into a strategic partnership. Anytime you plan to share confidential business information with someone, you should have a non-disclosure agreement in place before any confidential information is discussed.
Bonus Questions for Non-Profits
- Have you filed for tax-exempt status with the IRS?
- Have you filed the appropriate annual Form 990?
- Have you registered with your state attorney general, which is a requirement in many states? Some localities also require registration before you solicit donations from the general public.
