Management & Staffing

Ownership and Organisational Structure

Who are the owners, are they active in the business, who has signing authority and what percentage of the business do they own? What is the legal structure of the business? Is there partnership and/or key person insurance in place?

Choosing A Business Structure

Choosing a business structure is one of the most important decisions you will make as an entrepreneur. There are three basic structures: sole proprietorships, partnerships, and corporations.

• Sole Proprietorship: A sole proprietorship typically is a business operated by an individual. It is the simplest form of business structure. The proprietor owns the business assets and is personally liable for any debts incurred by the business. Any profits or losses from the business are combined with other income of the individual, and reported on the personal income tax return for the calendar year in which the fiscal year of the proprietorship ends.
• Partnership: A general partnership is formed by two or more individuals who together carry on a business for profit. There are three basic steps to the formation of a partnership: a registration of the partnership where required under provincial law, the creation of a partnership agreement, and the transfer of capital from the individuals to the partnership. The net profits of the partnership are allocated among the partners based on their right to share income. A partner's share of profit or loss is reported on the income tax return for the year that includes the year-end of the partnership.
• Corporation: A corporation is a separate legal entity incorporated under provincial or federal law. This can provide protection from both creditors and lawsuits. This idea is called limited liability (i.e., limited to the assets of the corporation and the share capital of the shareholders). The initial legal costs of incorporating can run between $1000 to $1200.

Deciding on your business structure should be made from both a legal and a taxation viewpoint. Talk to a lawyer.

Personal Goals of Management

List your personal goals and describe how the proposed business will allow you to achieve these goals. It is important that you enjoy working at your proposed business as you will be spending many hours doing so. It is also important that this business immediately or eventually allows you to achieve your personal goals.

Management Resume

• List all work experience.
• List all education.
• List all relevant hobbies and volunteer work.
• Relate how experience gained during each of your occupations, education and hobbies or volunteer work will help you successfully operate your proposed business.
• List other pertinent personal information such as age, marital status, dependants etc.

References for Management See sample

Draw up a letter with your name, address and a description of your proposed business. Take this letter around to friends and any high profile members of the community that know you. Ask these individuals if they feel that your proposed business is a good idea and if you have the skills and personality to run it. If so ask them to sign your letter of reference to this effect.

Partnership or Joint Venture Agreements (if applicable)

• If you are going to have a partner or partners, or be operating in conjunction with, or have a business relationship with another individual or business, you must have a proper written agreement in place. These agreements are available from Law firms, stationery stores, libraries and bookstores.
• This agreement should outline all of the responsibilities and compensations for undertaking these responsibilities for each partner.
• It should also contain a procedure for the orderly dissolving of the partnership should the partners agree to disagree.

Day to Day Operations

Go into detail on the facility, staff, hours worked, responsibilities, hours of operation, your role other than as manager.

Staffing

Describe the management and staffing structure of the business. What is the present level of staffing and what will it be over the next three years? What are the key positions and what is the reporting structure? What are the wage rates and what training will be provided? How will key staff be recruited when there is turnover or expansion? Attach resumes for all key staff.

Labour Market Issues

Discuss any factors that could limit the ability to hire, fire and retain staff.