Business and Tax Lawyer Blog

Despite the still lagging economy, a tiny Riverside bicycle shop in Jacksonville, Florida opened its doors in February of 2010 – and racked up 100 sales and 500 Facebook fans in its first month of operation. While the store, called ZenCog, considers itself a high-tech business, it sells a very old-school product: steel-framed, single speed, coaster-braked bicycles.

Co-owner Garfield Cooper of Avondale, Florida actually attributes the store's success to the poor economy. He says that people can't afford to spend lots of money on their cars, so bikes make a great alternative. And the old-school type of bikes that he sells are inexpensive to maintain since they don't have gears or brake cables.

Co-owner Clark Schaffer of Atlantic Beach, Florida believes that the store's more durable steel frame bikes are the perfect alternative to what he calls "disposable aluminum high-performance bicycles" that cost a lot more to purchase and maintain.

Shaffer and Cooper say they just want to see more people riding bikes; it is great exercise and doesn't pollute the atmosphere. The store has already attracted a fan base of local residents who come by the shop just to hang out.

This is an excellent example of a business finding a niche that can flourish in current economic downturns and recognizing how to "touch" its market segment. Even though their product may be old-school, their business model isn't. The store has embraced social media marketing, with an active website, blog and Facebook page. They use emailed receipts to cut down on paper waste. They also don't carry any new inventory. They use the internet to help customers customize bikes, which the store then assembles for them when the parts arrive. The only bikes they keep on site are consignment and refurbished.

Find out more about Jacksonville, Florida's newest bike shop at New Riverside bicycle shop cruising along despite economy.

Continue reading "New Jacksonville, Florida Small Business Racks Up Sales Offering Perfect Product for Down Economy" »

The Beaver Street Enterprise Center is a small business incubator that opened its doors in Jacksonville, Florida in 2003. It was established by the nonprofit group, FreshMinistries, to nurture small businesses by providing entrepreneurs with reasonably priced office space, mentoring services and opportunities for networking with other business owners.

In the incubator’s first year, fifteen fledgling businesses provided jobs for sixty two Floridians. By 2007, the center’

s businesses provided almost five hundred jobs to Florida residents, most of them from Jacksonville. The total revenue produced by these businesses has grown to close to $10 million.

Successful businesses to come out of the incubator include A. Harold & Associates, Xeye, Inc., and a Burger King Franchisee who owns six Burger King stores. The University of North Florida’s Small Business Development Center also has a presence there. Most come for the $10 per square foot office rent, but stay for the networking and relationships. Entrepreneurs credit the center with providing them the focus they need to build their businesses, the contacts with other business owners who can provide guidance, and the opportunity to meet local bankers who can help finance their operations.

The Beaver Street Center is currently home to fifteen small business tenants, and has room for two more. The Center also supports fourteen home-based businesses with shared office space, equipment and training. In addition, the Jacksonville Hospitality Institute offers a nine-week course, held in the Center, which prepares students for a career in hotels or restaurants.

Find out more about this small business incubator at Jacksonville small businesses get chance to grow on Beaver Street.

If you live in the Jacksonville, Florida or Orlando, Florida area and run a small business, please contact Wood, Atter & Wolf, P.A. for business legal counsel.

LLPs allow for all of the partners to share in management, and in case liability arises (for malpractice or negligence only), the offending partner is personally liable. Just like any other partnership, LLPs have pass-through taxation. Forming an LLP requires a certified registration.

The advantages of the LLP are: all partners can participate in the management of the company, no personal liability on any of the individuals (with the exception of malpractice or negligence), and taxation passes through to the individual.

The disadvantage of the LLP is the mandatory state registration.

In a limited partnership, there are two classes of partners: general and limited.

The general partner is the one who runs and manages the business, oversees the day-to-day operations, and incurs personal liability on behalf of the partnership. The limited partner is simply a silent investor who typically has no management functions, and is liable on behalf of the partnership only to the extent of the amounts of money invested.

A limited partnership also features "pass through" tax treatment. For a limited partnership, a certificate of limited partnership must be filed. Limited partnerships can also be formed with a corporate general partner. What this means is that the partnership can be formed between an individual and a corporate entity. When in this form, Florida law allows the limited partners to engage in management, but by engaging in management, the limited partners incur personal liability. When a partnership involves a corporate general partner, a certificate of registration must be filed with the state.

The advantage of a Limited Partnership is that there is no liability to the limited partners for financial shortages outside of initial principal.

The disadvantages of a Limited Partnership are that the general partner is liable for any financial shortages outside of the initial principal, and the general partner bears all the risk but no liability beyond his own assets.

In a general partnership, agency theory applies wherein each of the partners can bind the entire partnership. Each partner also incurs personal liability, but benefits from what is termed "pass through" tax treatment. "Pass through" tax treatment means that although the partnership files an information sheet with the state, income passes through the entity and is taxed via each partner's individual tax return. A partnership requires some form of an agreement (in writing or oral) but this document does not have to be filed with the state.

The advantages of general partnerships include: no individual liability, taxation passes through to the individual and the entity itself is not taxed, flexibility to expand the scope of the business, the ability to spread losses, and no filing formalities involved.

The disadvantages are that the you may be liable for others, management control is divided, and others can speak for you and bind the partnership.

Before registering a business, every new business owner is confronted with the task of deciding what business form/entity to use.

Well, the basic common business forms come in 6 flavors. They are the sole proprietorship, the general partnership, limited partnership, limited liability partnership (LLP), limited liability company (LLC), and the Corporation.

This is the first in a seven-part series, where I will provide a brief introduction to the options that best suits a business owner's needs.

In Jacksonville and northeast Florida we have just about all of them—McDonald's, Starbucks, and Dunkin Donuts; I am talking about the major franchises in the growing business of selling specialty coffee drinks. Recently, I posted a blog on succeeding in difficult economic times by finding a niche (Lucrative Niches +Established Marketplaces =Better Chances for Franchise Success). In that blog I explained that one way to be successful in a tough economy is by finding a niche that separates your company from the other businesses in the same market.

In this blog I would like to show you how the few franchisors I already listed, along with Tim Hortons and Caribou Coffee, a couple of the other major players in the specialty coffee market (neither of which have locations in Jacksonville), use their niches in the coffee and food chain restaurant business to compete. Here is a brief explanation of what helps each of them succeed in garnering a portion of the market share.

McDonald's, the largest franchisor, uses its buying power to provide the product at a slightly cheaper price and sells it along with its wide array of breakfast and burger meals.

Starbucks is probably the originator of the specialty coffee boom, so it can rely on the fact that it was the first in the market and that it is primarily a high-end coffee business.

Dunkin Donuts combines its primary product, donuts, with coffee to reach its particular market, and prior to Tim Horton's entering the marketplace, Dunkin Donuts, was the only one of these businesses offering its customers a wide array of donuts. Dunkin Donuts has recently added breakfast sandwiches in order to compete with McDonald's and Tim Hortons.

Tim Hortons, like Dunkin Donuts, sells a wide variety of donuts, but it also sells breakfast sandwiches and other foods, including soups and lunch sandwiches.

Caribou Coffee, the only other primarily high-end coffee focused chain besides Starbucks, competes by selecting smaller unexploited markets to locate its stores, avoiding direct competition with Starbucks.

Whatever your business is, you can still find a way to compete in a crowded market by finding your niche. Drop me an e-mail and let me know what you think. As always, I look forward to hearing from you