• We coordinate about 15,000 filings and deadlines annually
• We prepare about 20,000 sets of documents annually
• Because of advances in technology, we went from having 5 people prepare the documents associated with those 15,000 annual filings and deadlines to one full time person
• Our website tracks all those deadlines without human interaction
• Approximately 95% of what we send to clients is delivered electronically, resulting in an annual savings of about $60,000 for our firm in paper and postage
• More than 50% of our clients have a credit card on file, enabling for a more efficient AR process related to our services

Recently, I was asked to speak on how we keep our plans on track.  We came up with a feeling, a book, and four tools that we use in our firm to accomplish our goals, to relentlessly increase the quality of our service, to grow our practice, and to transform our organization.

The Feeling

The key to accomplishing our goals is passion.  An entrepreneur needs a passionate, do or die vision of what he or she is trying to accomplish. The founder of Zappos says “Chase the Vision.  Not the money”. 

In my case, my vision is to be the leader in entity management. 

To be able to execute a business plan, you first need a powerful, passionate,  and spectacularly concise description of what you are trying to accomplish.

And you are going to seriously need it.  You’ll need passion for your vision to explain what you’re doing to your partners, to justify your actions, to measure your decisions, to rally your troops, and to remind yourself of your mission.

So, before you start trying to execute even the most exceptionally well thought out plan, make sure you’re passionate and you have vision.    

The Book

Read The E-Myth (www.e-myth.com, http://en.wikipedia.org/wiki/E-Myth).  It changed the way we do things.  Period. 

Four Tools

Now, I am going to share with you four tools that we use in our firm to keep our business plans on track:

1. Allocate overwhelming resources to ensure the success of your plan;
2. Micromanage;
3. Have a “fix it “ list; and
4. Be flexible.

Tool Number One: Allocate Overwhelming Resources

Once you have a clear vision, the first step is to audit what resources you need to accomplish your mission.  I have always liked the way Collin Powell referred to the need for overwhelming force in warfare.  It’s the same thing when it comes to executing a plan.   

In order to have any chance at successfully executing a plan, the first step is to analyze what resources are necessary to achieve your mission.  Far too often, extraordinarily well thought out business plans are developed, bound, distributed, launched with fanfare, and then fail.

They fail because insufficient staff, resources, funds or whatever are allocated to the mission.  In my firm, we only have eleven employees, but we have a full time member of our staff whose sole job function is to keep our business plan on track.  I also spend about 1/3 of my time executing our plan – all for one simple reason – we’re extremely serious about our plans being successful.

We’re serious about the process, because we know that to be a great organization we can’t focus only on the needs of a single client.  We want to consistently deliver exceptional results to hundreds of clients all the time.  That’s only possible because we’ve made a decision as an organization to free up a key person to focus only on the big picture. In other words, we have a fundamental commitment to investing the resources so that multiple people in the office are dedicated full time to working “on” – not in – the business.

Tool Number Two: Micromanage Tasks

I used to think that educated, dedicated staff shouldn’t need to be micromanaged.  In fact, it’s sort of a bad word in business – to be “micromanaged” – but to make sure that a plan is executed that’s exactly what you need to be.  A micromanager is someone who intensely focuses on the little nits and nats.

You now have passion, a vision, and you’ve allocated overwhelming force to your business plan.  The next step is to micromanage the details.

Business plans are not self executing. A brilliant, inspiring presentation of a business plan to your entire firm  will accomplish nothing without constantly taking the temperature of every single member of the staff, from the mail clerks to the managing partner, to make sure that the plan is on track.  To do that, you need to create an infrastructure to ensure your success.  You can set up a weekly meeting schedule, reports, or whatever works best for you.

To keep our plan on track, we created what we refer to as the Master Task List – a constantly updated list of what each person is supposed to be doing each day.  We constantly, regularly, unrelentingly meet with every single member of our team to ensure that their task lists make sense, that they are being done, and that our plan is on track. Make no mistake about it — If you don’t properly allocate tasks, the task will not get done. And your main job as the person who is responsible for executing a plan is to make sure that all of the little tasks get done.

Tool Number Three: Have a “Fix It” List

Evan Cole, the founder and owner of the wildly successful ABC Carpet in New York City.  ABC Carpet is more of a cultural experience than it is a home furnishing store, but the best thing I ever got from ABC Carpet is a great saying from its founder “Stay constantly irritated.  When you walk through your business, focus on what’s wrong.  What’s right is what you pay your staff for”.

You need to constantly ask yourself what’s wrong? What works? What doesn’t? Where is your plan falling off track? You have to be a restless, persnickety pain in the ass to create an engine of constant improvement.

People who work with me would say that I’m extremely restless. In my firm, I have a constantly updated list of what’s not working right.  I keep it to one page.  My “list” includes all of the things that aren’t working particularly well, and I literally take each task and work it, one at a time, until the problem is fixed.

And then I find a new problem.

Once I read it put this way:

1. See everything;
2. Tolerate a lot; and
3. Fix one thing at a time.

Tool Number Four: Be Prepared to Forget the Plan

Finally, the last suggestion I have for you is to keep focused on your vision, but be FLEXIBLE.  Be prepared to constantly tinker with your plan.

By and large, nearly nothing that you planned when drafting your business plan will working out in the brilliant precise way that you conceived it.  To achieve your objectives, be prepared to reconsider parts of your plan that did not live up to expectations.

Whether it is due to an unpredictable economic climate, or massive advances in technology, a key element of successfully executing a plan is being prepared to not “stick with the plan.”  At our firm, we’re focused on a few concise goals, but our way to get there is in constant motion. 

When something doesn’t work, we invest the time to meet with the necessary people in the office, meet with clients that have important feedback regarding our process, or draw in the required outside vendor resources to make the necessary change happen.

A Very Unglamorous Role

I think most business plans tend to fail for one simple reason – the development of the business plan is seen as the end of the process when it is really just the beginning.  It requires constant, unrelenting, effort to execute on a business plan.  It requires you to be the guy in your organization who refuses to permit the comfortable status quo.

To be the person in your organization who is responsible for explosive change, you’re taking on an sometimes unglamorous, unpopular role.  People will resist change, some staff might grumble, complain, or quit, and that’s why it’s important to keep passionate about your vision.

But if you are prepared to be sometimes unpopular, anal, micromanager, and you have overwhelming resolve, passion, and resources, you can transform your organization.

But hold the presses. What about not forming an entity at all?  With courtside seats to the business entity game, I see far too many boxes of bits and pieces of paper, unopened envelopes from the Franchise Tax Board, and frustrated clients who have formed an entity online and later regret that they formed an entity at all.

Here are some basic considerations for all entrepreneurs who are considering incorporating their first business:

1. Are you aware that you can start a business without forming a corporation or LLC?  Yes, in the United States it’s extraordinarily easy to start a business, and there is absolutely no requirement that you form a corporation or LLC to get a business off the ground.  A lot of businesses, including my own, started as a sole proprietorship.
2. Do you have a good reason to form a corporation or LLC?  The key reason that forming a corporation or LLC makes sense is liability protection.  If you have no assets to risk, there’s very little to protect, and virtually no reason to incorporate.  In other words, if you are a recent college grad who is eating ramen and living the start up dream, there’s no reason to incorporate.  In fact, a corporation won’t even provide liability protection unless it is adequately capitalized.   See, http://www.eminutesonline.com/inadequate-capitalization-courts-know-it-when-they-see-it/.  Further, if you’re the chief cook and bottle washer, you can’t protect your assets from your own actions, so a corporation might not even provide any liability protection at all.  See, http://www.eminutesonline.com/the-corporate-veil-of-protection-%e2%80%93-an-imperfect-shield/. Good reasons to incorporate are: (a) you are creating a business structure with investors or partners, and (b) you have assets to protect from the liability arising from the business.
3. Do you have the resources to maintain a corporation or LLC? You cannot have a corporation or LLC without filing annual tax returns and paying state franchise tax ($800/year in California).  For most of us, that means you should not form a corporation unless you can afford to pay a CPA to prepare the annual tax return and you have the resources to manage a little extra bookkeeping to keep your corporate expenses separate from your personal expenses.
4. Taxes benefits are icing not the cake. While it’s possible that there might be some benefit to incorporating from a tax standpoint, tax benefits are the icing on the cake, not the cake. 

             1.         Close all unnecessary entities.  Years ago, I formed a LLC for a small investment.  When the transaction ended, I kept the LLC alive only because I liked the name.  This cost me $800/ year in franchise tax and some administrative expense (e.g., the cost of preparing a tax return, maintaining a checking account, etc.).  2009 is the year to properly dissolve business entities that are no longer serving a business purpose.

             2.         Surrender lingering qualifications.  Suppose you formed a Delaware company and qualified it to do business in Arizona when you purchased a small property there.  Later, you did a 1031 exchange and acquired a property in Texas.  Are you still paying taxes and filing a return in Arizona?  If so, why?  When a company is formed in one state and doing business in another state, the entity must “qualify”  to do business in the state where it is conducting business operations.  Once qualified in a particular state, the entity must pay franchise taxes and file a tax return there.  It’s a simple process to surrender lingering qualifications, and doing so can avoid wasted franchise taxes and administrative expenses.

             3.         Stay on top of state filings to avoid junk fees.  Most states require every business entity to file an annual report of one form or another.  The fees are nominal, but the late fees for tardy filings can really add up.  The normal $125 state fee in Nevada can grow to $200, and the puny $20 fee in California can become $250 before you know it.  Develop a system to track state filing deadlines and file online to avoid junk fees.

             4.         Don’t overpay your resident agent.  State law requires each entity to have a resident agent.  Frequently, we see annual fees that are nearly $300/year.  Forgive the plug for my business, but eResidentAgent (www.eresidentagent.com) will act as resident agent for $125/ year.   If your company is doing business in several jurisdictions, or if you have lots of entities, switching agents can save hundreds or thousands of dollars annually.

             5.         Why be a LLC?  In California, only LLCs pay the California “gross receipts” fee.  If your business does not need to be a LLC, convert to a S-Corporation immediately.  Failing to do so is like handing out hundred dollar bills on Wilshire Boulevard.  For more on this topic, take a look at our article, Looking to cut costs? Start with your LLC. 

             6.         Convert LLCs to LPs.  Real estate investors who own lots of LLCs can often times convert to LPs and save an enormous amount of gross receipts fees.  For more on this topic, take a look at our article, Looking to cut costs? Start with your LLC. 

Need to energize your entrepreneurial faith in the economy? Here’s something wonderful Warren Buffet said on The Charlie Rose Show:

I don’t want [anyone] to think a magic wand exists in Congress. [We're] going to see some more bad news. But the system will work over time. There’s no question, we’ve got a wonderful system. This country will be living better 10 years from now than it is now. It will be living better 20 years from now than 10 years from now. The ingredients that made this country [made it] the miracle of the world. We had a seven-for-one improvement in the average American’s standard of living in the 20th century. We had the Great Depression. We had two world wars. We had the flu epidemic. We had oil shock. We had all these terrible things happen, but something about the American system unleashed more and more of the potential of human beings over that 100 years, so that we had a seven-for-one improvement.
You have centuries where if you got a 1% improvement, then there’s something. We’ve got a great system. And we’ve got more productive capacity now than we ever have. The American worker’s more productive than he’s ever been. We’ve got more people to do it. We’ve got all the ingredients for a sensational future.

–Warren Buffett, on The Charlie Rose Show

When the officers and directors decide to end a corporation’s existence, the corporation must be “dissolved”. That process includes taking corporate action through a resolution and following the procedure required by the appropriate state. In California, if all of the shareholders vote for a dissolution, a Certificate of Dissolution is filed with the Secretary of State.There’s good reason to act quickly in the last quarter. To avoid a franchise tax obligation for 2009, we encourage our clients to review their entities and start the dissolution process as soon as possible. Completing the process by the end of the year in California will save $800 and the cost of preparing a tax return next year. The savings vary from state to state, but the same idea will apply wherever the corporation has been formed.

Some clients prefer to allow a corporation to die a slow, agonizing death. This is frequently referred to allowing a corporation to “die on the vine”. To learn more about why it’s not a great idea to allow a corporation to die on the vine, read my article entitled A Musical Guide to the End of Corporate Existence.

When we started planting trees in 2006 for all of our clients who select “paperless” document delivery, I have to admit that I felt a little granola. But in the last two years, we have planted a couple of thousand trees, and we are about to embark on planting a jungle with our commitment to plant 10,000 trees by August 2013.

In typical law firm fashion, we’re experts at wasting reams and reams of paper. Digital document delivery allows us to cater to our clients’ needs quicker and more efficiently than ever, and it’s been an eye-opening experience to discover the benefits of becoming paperless. Why 10,000 trees? Ten thousand trees release enough oxygen back into the atmosphere to support 20,000 human beings for one year. It’s proof that you can be environmentally responsible and benefit your business at the same time.

You can keep tabs on our progress and watch our jungle grow via quarterly email blasts with updated tree counts. To learn how we got started on our tree planting adventure, see Paper Doesn’t Grow On Trees.

Every day I talk with entrepreneurs from throughout the world about their exciting new ventures. Our firm believes strongly in the benefit of involving all members of a client’s team, including their business managers and advisors, tax accountants, and general counsel, to develop the best structure for a deal. As a result, I have had the chance to be a fly on the wall when the most brilliant minds of the business world are putting deals together.

eMinutes Magazine is a single source where I will consolidate all of the information, research, lessons, business advice, and stories from the experts and entrepreneurs I see in action. I hope eMinutes Magazine becomes a resource that you rely on when considering your business ventures, growing your company, and, as we develop our content, I am sure you will enjoy reading the stories and advice from the business community’s best and brightest.