BUSINESS ORGANIZATION: management & legal structure
Business Ownership Worksheet
Which form of business ownership is best for you depends on the type and size of your business, the kind of products you will offer, and your local, state and federal laws. Check with your state about the rules governing each legal structure, and then talk with your accountant, lawyer or mentor to make sure you choose the best form of ownership.
1.	What type of business ownership will you choose? Describe the advantages and disadvantages of this legal structure on the worksheet below.
Legal structure of your business: _____________________________________________________
Advantages | Disadvantages
2. 	Why is this currently the best form of ownership for your business? Will you need to switch to another form of ownership later? If so, explain.
3.	Who are the owners of your business? What is their financial share of ownership?
Business Fees, Permits and Taxes Worksheet
Use the chart below to review the business registration, permitting, licensing and tax information that applies to your business. Be sure to research any fees you’ll have to pay.
Business registry/licensing | Information needed or action required | Contact agency | License/permit fee
Register business name
Get employer identification number (EIN)
Register trademark
State, county and local business licenses
Zoning permits
Signage permits
Other licenses or permits your business requires:
TOTAL
Type of tax | Agency to contact | Registration requirements
Federal income tax
State income tax
Local income tax
Sales/use tax
Property tax
Self-employment tax
Other taxes and fees that affect your business:
Business Laws and Regulations Worksheet
Consult the relevant agencies to answer the following questions and estimate compliance costs. (Note: Even if your business currently has no employees, researching these questions now will prepare you to hire employees when necessary.)
Legal issue | Applicable laws | Contact agency | Compliance cost
Payroll and withholding taxes
Wage and hour regulations
Worker safety laws
Civil rights laws
Consumer privacy laws
Direct marketing laws
Advertising and labeling laws
Public health
Shipping laws
Environmental laws
Other:
|  | TOTAL
Contracts and Leases Worksheet
Use this worksheet to explain which contracts and leases your business requires. Include contracts you already have, as well as any contracts needed to launch or grow your business.
Contract or lease type | Purpose
Employment agreement
Nondisclosure agreement
Independent contractor agreement
Power of attorney
Partnership agreement
Buy/sell agreement
Promissory note
Lease agreement
Purchasing agreement
Land usage contract
Warranties
Licensing agreement
Franchise agreement
Other:
Intellectual Property Worksheet
Use this worksheet to explain how you will protect your intellectual property.
Intellectual property | Steps needed to gain protection | Estimated Cost
Trademark
Business name
Copyright
Patent
Trade secret
| TOTAL
Intellectual Property Worksheet—continued
Use the following table to list any intellectual property you need to buy or license from other people. Note the purpose and terms of use for each type of intellectual property, as well as any estimated fees.
When researching this section, think about any creative work you will use in your business that is not your own creation. Pay special attention to online use of copyrighted materials. Not only is this is a common area of infringement, but online copyright infringement is also very likely to get noticed.
Intellectual property | Purpose and terms of use | Fees
Photography
Music
Graphic design
Illustration
Logo design
Fonts
Writing
Video
Recipes and formulas
Patterns (e.g., knitting)
Software:
Other:
Other:
| TOTAL
Management Team Worksheets
These worksheets identify your internal and external management team and highlight their credentials and qualifications. Even if you are running your business by yourself, it’s wise to fill out these worksheets. As your business grows, you will almost certainly need help managing it.
Step 1	Complete the Internal Management Team Worksheet.
List owners and managers and their titles. State who will manage day-to-day business operations and explain why you chose them (skills, education, qualifications, experience, etc.).
Step 2	Complete the Management Skills Worksheet.
Which skills do you currently have in-house, and which do you need to learn or seek from outsiders? To answer these questions, review each skill area in the Management Skills Worksheet. In the Adequate Knowledge column, write the name of the internal management team member who has the relevant skill.
If no team member currently has that skill, decide whether you will train someone inside your organization or will hire an outside expert. Then, put an “X” in the Outside Help Needed or the Education Needed column. For skills that require education, research the cost of education or training and enter it in the Cost column.
Step 3 	Complete the Outside Services Worksheet.
Identify outside services you need, and state who will provide them (if you know). Research monthly costs for each outside service you feel is essential. Always consider the legal issue of independent contractors vs. employees—as defined by the IRS—when deciding which functions to outsource.
Step 4 	Complete the Advisory Board Worksheet.
Identify prospective advisory board members by the type of knowledge or experience they have and—if possible—by name.
Management Team Worksheets—continued
Internal Management Team Worksheet
1.	Who are the owners and managers of your business, and what are their titles?
Name | Title | Owner | Manager
2.	Who will manage the day-to-day operations of your business?
3.	Why did you choose the managers listed above? Use highlights from their résumés to explain their relevant skills, education, qualifications, and professional or practical experience.
Management Skills Worksheet
Review each skill area in the Management Skills Worksheet below. In the Adequate Knowledge column, write the name of the internal management team member who has skill in that area. If a skill isn’t relevant to your business, write “NA” for “not applicable.”
If no management team member currently has the skill, put an “X” in the Outside Help Needed or the Education Needed column. For each skill that requires education, research the cost of education and enter it in the last column. (You will research the cost of outside services on the next page.)
Management skills | Adequate knowledge (write in the name) | Outside help needed | Education needed | Estimated cost
Planning and organizing
Employee management
Budgeting
Accounting and taxes
Financial management
Bookkeeping
Payroll
Credit and collections
Design and engineering
Manufacturing
Quality control
Inventory management
Information technology
Graphic design
Photography and video
Copywriting and editing
Website design
E-commerce
Marketing and promotions
Sales
Customer service
Safety and security
Legal
Secretarial
Other:
|  |  | TOTAL
Management Team Worksheets—continued
Outside Services Worksheet
The Management Skills Worksheet identified necessary skills you currently lack. With those skills in mind, complete the Outside Services Worksheet. You’ll need to research the cost of each outside service. Get two or three bids for each service category. Remember to consider low-cost/no-cost options like free legal services and barter.
Estimate the monthly cost of each outside service, and then add up the total annual cost. This way, you can compare the cost of using outside services to the cost of training someone to do the same work.
Service category | Who? | Monthly cost | Annual cost
Planning and organizing
Employee management
Budgeting
Accounting and taxes
Financial management
Bookkeeping
Payroll
Credit and collections
Design and engineering
Manufacturing
Quality control
Inventory management
Graphic design
Photography and video
Copywriting and editing
Website design
E-commerce
Marketing and promotions
Sales
Customer service
Safety and security
Legal
Secretarial
Other:
| Total Monthly Cost
|  | Total Annual Cost
Advisory Board Worksheet
Advisors can bring expertise and unbiased views to your business for a low cost. Advisory boards typically meet annually or quarterly. Board members usually serve on an unpaid basis. They’re often rewarded simply by having their meeting meal paid for, or with discounts on products or services. The board may consist of family members, local business professionals, customers, mentors, or noncompeting owners of similar businesses.
1.	Identify potential advisory board members by the type of knowledge or experience they have and—if possible—by name.
Knowledge or expertise desired | Potential board member name
2.	How often and where will your advisory board meet? How will you compensate members?
Employee Management Worksheets
Now that you’ve identified your management team, outside services and advisors, you need to consider your employee needs and the associated costs.
Employee Needs Worksheet
Detail your employee needs on the worksheet below. Identify full-time and part-time positions, and note when they will be needed (seasons, specific hours of the day, etc.). Then, answer the questions that follow the worksheet.
Job title | Skills and qualifications | Responsibilities | Full- or part-time | When needed
Employee Management Worksheets—continued
1.	Have you written current job descriptions for your management and personnel positions? If you haven’t, schedule this activity on your Action Plan Worksheet from Session 1. If you have, include copies of job descriptions in the Appendix section of your business plan.
2.	How will you find, screen and hire the employees you need?
3.	What training will new employees need? Specify training needs for each position. Who will conduct training (in-house; community college)? What are the costs?
4.	What paperwork will be required when you hire new personnel? What other legal requirements apply?
Employee Management Worksheets—continued
Employee Salary/Wage and Benefits Worksheets
This worksheet will help you summarize wage and salary expenses for prospective full-time and part-time employees. Include mandatory payroll taxes in your calculations, as well as any optional benefits.
Step 1	List the job title for each employee you expect to need on the Employee Salary/Wage and Benefits Summary Worksheet below. Include managers and active owners who will receive wages (as opposed to owners taking a draw).
Step 2	For each employee you identified in Step 1, fill out one copy of the Employee Salary/Wage and Benefits Worksheet (Monthly) on the next page. Make extra copies of this worksheet, if necessary. (Note: This is a monthly worksheet, so for part-time or seasonal employees, detail the months they will be working or their anticipated seasonal monthly hours.)
Step 3	Fill in the salary/wage and benefits costs to be paid each month to each employee on the summary worksheet below. (Don’t forget seasonal fluctuations.)
Step 4	Calculate the total monthly salaries by adding down the columns, and the total yearly salaries by adding across the rows. Check for accuracy—the sum of the yearly totals should match the sum of the monthly totals.
Employee Salary/Wage and Benefits Summary Worksheet
Employee title | Wage/ benefits | Jan | Feb | Mar | Apr | May | June | July | Aug | Sep | Oct | Nov | Dec | Yearly total
Monthly Total
Employee Salary/Wage and Benefits Worksheet (Monthly)
Title: |  | Notes:
Work Performed:
Salary/Wage per Hour/Month: $
Mandatory Benefits: |  | Optional Benefits:
Social Security (FICA) | $ | Medical Insurance | $
Federal Unemployment | $ | Dental Insurance | $
State Unemployment | $ | Vision Insurance | $
Workers’ Compensation | $ | Life Insurance | $
Other: | $ | Disability Insurance | $
|  | Pension Plan | $
|  | Profit-Sharing Plan | $
|  | Other: | $
Total Mandatory/Month | $ | Total Optional/Month | $
|  | Grand Total/Month | $
Employee Salary/Wage and Benefits Worksheet (Monthly)
Title: |  | Notes:
Work Performed:
Salary/Wage per Hour/Month: $
Mandatory Benefits: |  | Optional Benefits:
Social Security (FICA) | $ | Medical Insurance | $
Federal Unemployment | $ | Dental Insurance | $
State Unemployment | $ | Vision Insurance | $
Workers’ Compensation | $ | Life Insurance | $
Other: | $ | Disability Insurance | $
|  | Pension Plan | $
|  | Profit-Sharing Plan | $
|  | Other: | $
Total Mandatory/Month | $ | Total Optional/Month | $
|  | Grand Total/Month | $
Supply Chain and Logistics Worksheets
Your supply chain consists of all the interdependent business processes that go into selling your product, from sourcing and manufacturing to distribution and sales.
Business Site Worksheet
The location of your business should be compatible with your goals and strategies. The importance of physical location depends on what kinds of products you offer, what kind and amount of space you need, and what effect your site has on producing and delivering products to your target customers.
BUSINESS LOCATION:
Features and benefits of this location | Drawbacks of this location
Nearby businesses and other attractions | Transportation (customers, distributors, suppliers)
Necessary renovations or additions | Costs
What are the growth prospects in the area?
At what point in your growth cycle will you need to consider relocating? Why?
Occupancy Expenses Worksheet
Step 1	Put a check by the expenses that are applicable to your business location.
Step 2	Fill in the monthly costs for all applicable cost categories.
If you have an existing business, use historic information and update it for anticipated increases. If you are planning to expand, include updated costs to accommodate the new space.  If you are not sure of the cost, do some research instead of taking a blind guess.
Avoid simply estimating a yearly total and dividing it by 12 to determine the monthly total, unless you are sure that there is no monthly fluctuation associated with that cost item.  (Note: Building insurance is included in the Insurance Needs Worksheet that appears later in this session, so don’t enter it here.)
Step 3	Calculate the monthly totals (add down the columns).
Step 4	Calculate the annual totals for each expense category (add across the rows).
Step 5	Check for accuracy (the sum of the column totals and the sum of the row totals should match).
Step 6	Document your assumptions for each expense category.
“Assumptions” are reasons or justifications for the numbers you use in financial worksheets.  Written assumptions help you and your reader keep track of why you decided to use a certain cost estimate, and where the number originated.
NOTE: Your plans, costs and assumptions may change as your plan evolves. Make a note on your Action Plan Worksheet to review these early worksheets before completing your Cash Flow Projection Worksheet in Session 7.
Occupancy Expenses Worksheet
|  | 1        Jan | 2     Feb | 3       Mar | 4       Apr | 5      May | 6     Jun | 7     Jul | 8        Aug | 9        Sep | 10       Oct | 11    Nov | 12    Dec | Yearly total
1. | Rent & loan payments
2. | Property taxes
3. | Maintenance & repairs
4. | Electric
5. | Gas
6. | Water & sewer
7. | Internet
8. | Telephone
9. | Garbage
10.
11.
12.
TOTAL
Equipment Needs Worksheet
List all the equipment needed to produce and deliver your product. Explain the purpose of each piece of equipment, and state whether you will buy, rent or lease it. (If you already own the equipment, write “Own.”) Last, list the cost of the equipment.
Equipment | Purpose | Buy, rent or lease? | Cost per month
|  | TOTAL
Purchasing and Inventory Worksheet
1.	What raw materials does it take to produce and deliver your product or service?
2.	Who are your suppliers? Where are your suppliers? What tradeoffs are involved in choosing one supplier over another (e.g., local sourcing vs. low-cost materials from overseas)?
3. 	Will you make products to order, or keep an inventory? Will your inventory be onsite, or will you store it elsewhere?
4. 	What system will you use to keep track of your inventory? Explain your choice and cite estimated monthly costs.
Risk Management Worksheets
Insurance Needs Worksheet
Use this worksheet when consulting with an insurance agent to determine the type, amount and cost of coverage you need. Make multiple copies, if necessary.
Type of insurance | Required? | Type and coverage | Cost per month
Protecting your business
General liability
Product liability
Professional liability
Completed operations
Business property
Business interruption
Business crime
Commercial auto
Electronic data processing
Cybersecurity
Website
Surety or fidelity bonds
Key person
Home office
Other:
Protecting yourself
Personal disability
Life
Medical
Self-insurance
Other:
Protecting your employees
Group health
Life
Pension plan
Workers’ compensation
Other:
|  | TOTAL
Other Risks Worksheet
1. 	What other risks might affect your business? An inside risk might be a structural threat like fire damage. An outside risk might be someone coming to rob your business. What management policies and procedures will protect you, your employees and your business?
Description of risk | Inside or outside? | Policies and procedures to manage risk
Risk Management Worksheets—continued
Continuity Planning Worksheet
Statistics show that most small businesses that suffer a disaster—such as a fire, a flood or a costly break-in—never recover. Even if you have insurance, the loss of important business records and documents can make it very hard to get back on your feet. Creating a business continuity plan will help you prepare for and survive disasters of all kinds.
This worksheet will give you a first look at the kind of data required for a business continuity plan. As soon as it’s practical, you should create an actual, full-scale plan to help your business recover from disasters and disruptions.
Step 1	For each essential business function, list the name of the person who’s responsible for the function, the tools and resources that this person needs to do the work, and the steps required to get the business function up and running again in the event of a disaster.
Step 2	For each threat, describe the possible impact on your business, the steps you can take to reduce that impact, and offsite resources that can help you recover (e.g., a storage space or safe deposit box).
Step 3	List the name of each hazardous material your business uses. State the type of hazard (e.g., “Flammable Liquid”). Note the total amount stored (on average) and the location. This information could save the lives of first responders during an emergency.
Step 4	List essential documents and data. State their purpose. State their onsite location, and explain where to find backup copies in the event of a disaster (e.g., at a storage space or online). If data are stored electronically, include your password or explain where to find it.
Continuity Planning Worksheet
Business function | Who’s responsible? | Resources and tools needed | Recovery steps
Manufacturing
Purchasing
Sales
Order fulfillment
Inventory management
Accounting
Legal compliance
Communications
Internet
Other:
Threat | Potential impact | Risk reduction steps | Offsite resources
Fire
Flood
Tornado / hurricane
Theft
Other:
Hazardous materials | Type of hazard | Location | Amount stored
Documents and data | Needed for | Onsite location | Backup location

Worksheets Assignment for Session 4
Complete the following worksheets before writing the corresponding section of your business plan. Business Ownership Worksheet Business Fees, Permits and Taxes Worksheet Business Laws and Regulations Worksheet Contracts and Leases Worksheet Intellectual Property Worksheet Management Team Worksheets Employee Management Worksheets Supply Chain and Logistics Worksheets Risk Management Worksheets
Writing Your Business Plan
Use the information from this session to write the sections of the NxLeveL® Business Plan shown below. Start with the headings and subheadings just as they are shown here. Then, follow the instructions in italics under each subheading. Section III. Business Organization and Operations A. Business Structure, Management and Personnel Business Structure Review your answers to the Business Ownership Worksheet. State the legal structure you chose and explain its benefits. Then, identify all business owners and state their financial share of ownership. Management Team Review the Internal Management Team Worksheet. Describe your management team. Include details about key managers, and explain why they were chosen. In the Appendix, include a résumé for each owner and key manager. If a management position is unfilled, include the job description instead of a résumé. This section should tell your reader why you and your team are qualified to manage your business. If applicable, include an organizational chart to help readers see the roles and responsibilities of your management team. Outside Services and Advisors Review the Outside Services Worksheet and the Advisory Board Worksheet. Discuss the outside services you’ll need, and why you decided to use them instead of hiring an employee to do the work. Then, discuss whether or not you’ll use an advisory board. Describe who (by member type, not names) might be on the advisory board, and what information they will provide to help your business.
Writing Your Business Plan - cont.
Section II. Business Concept C. Industry Information Industry Background Review your answers to Questions 1 through 4 on the Industry Research Worksheet. Summarize the information to describe the current size of your industry in terms of dollar sales and number of businesses or customers. Discuss whether large or small firms dominate the industry, and note any seasonal trends. Explain how and where products and services are currently promoted, sold and delivered in this industry. Current and Future Trends Review your answers to Questions 5 through 10 on the Industry Research Worksheet. Explain whether the industry is growing, stable or declining. Summarize the economic outlook for the industry and for small businesses within the industry. Identify and explain important niche market trends that relate to your business. Describe the impact of current and future political, economic, social and technological trends on small businesses within your industry. Business Fit in the Industry Review your answers to Questions 11 through 14 on the Industry Research Worksheet. Then, describe how you see your business fitting into this industry. Will your business be like most others in the industry, or will it be different? Explain any unique aspects of your business that you feel improve its chance to succeed in this industry. If possible, relate your fit in the industry to important trends you identified in the previous section.