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Cleveland Business & Commercial Law Blog

Business planning can minimize risk and maximize reward

Risk and reward often go hand in hand. For some, starting a business is just something to dream about; however, for others, it is more than just a dream. Turning this dream into reality is the driving force behind new Ohio business ventures. One part of the risk and reward equation involves the various business planning decisions that will need to be addressed.

The first step is to focus on the specifics that will bring in business revenue. While it is true that there is often a number of expenses associated with any business, the majority of businesses do need to focus on income in order to sustain the business through the start-up phase. Along with focusing on income, focusing on making sure that the right people are in place to drive the business is essential.

Shareholder disputes: Papa John's pizza involved in lawsuit

It often takes many people to help run a successful business. Typically, companies create boards with shareholders that can have at least some say in how certain operations within the company take place. However, it is not uncommon for shareholder disputes to take place when one or more shareholders become disgruntled with how the business is running.

Ohio residents may be interested in a lawsuit involving Papa John's pizza. Reports indicated that the pizza chain's founder and largest shareholder John Schnatter has filed a lawsuit against the company, including the board of directors and the CEO. Schnatter was previously the chairman of the board, but after making a controversial statement, he removed himself from the position. However, he now wants reinstated and claims that his statement was taken out of context.

Employee contract disputes lead to termination

One of the more common contracts a business in Ohio may use is the employment contract, and many of those contain noncompete agreements. While an employee may feel the noncompete agreement potentially hinders his or her ability to pursue better opportunities in a chosen field, there are ways to negotiate such contract disputes. Unfortunately, without the proper legal assistance, seeking a release from a noncompete agreement may result in negative consequences.

A man in another state signed a noncompete agreement when he took a job as executive vice president of marketing with a national sign company. Within a month of beginning his employment, another company attempted to recruit him. The man finally accepted an offer from the competing company, then began negotiating with his current employer for release from the noncompete agreement. The employer asked for certain information from his competitor before agreeing to release him.

Closely held business organization has benefits

Starting a small business in Ohio means making many decisions before the first transaction is ever made. One of the first decisions may be the type of business organization to use that will be most appropriate for the goals of the entrepreneurs. Many just starting out find that partnering with several people is a good way of sharing the expense of business startup and operations. This is why about 90 percent of all U.S. businesses are closely held.

A closely held, or close corporation, is a private business in which a limited number of people hold all the shares in the business. These shareholders are often the same people who own and run the business, and they are typically family members. A closely held business is so called because the shares of the company are held close to the business and are never sold to the public. Any shareholder who wants to sell stock must do so within the group of existing shareholders.

Breach of contract can occur when employee changes companies

Companies often spend considerable time and money searching for and training employees and managers. The Ohio based company goes to this expense in anticipation of the individual remaining loyal to the company and working with the company for at least a certain time period. In some instances, this time period is spelled out in contract form, and if the individual decides to leave prior to this contract expiring, a breach of contract may occur.

For the past five years, one man has served as the special teams coordinator for a leading university's football team. In this role, he was responsible for developing players and presenting a force to be reckoned with on the football field. Then, in the wake of the team's head coach leaving, the man was named as interim head coach.

Business planning allows companies to compete with e-commerce

In recent years, consumers in Ohio and across the country have seen more retail giants facing bankruptcy or closing stores. For many, this drastic measure is the result of an inability to compete with e-commerce retailers like Amazon. Those companies that were unable to translate their brick-and-mortar success into an online trade struggled to remain relevant as consumers embraced online shopping. However, more small businesses are finding it beneficial to include an e-commerce component in their business planning.

More than half of small business owners surveyed say the shift toward e-commerce is not something that worries them. In fact, only a small percentage say they are in competition with large e-commerce retailers like Amazon or Walmart. For many small businesses, rather than struggling to convert to e-commerce, online business transactions are actually helping them to expand their clientele in a way they would not have done otherwise.

Real estate acquisition can be lucrative for Ohio businesses

Location is key in the success of many Ohio businesses. In most instances, similar types of businesses congregate in the same general area. Thus when a company is looking to invest in real estate, it often looks for property in the same general area as like-minded businesses.

Some companies prefer to purchase property for their own use. A retail store may purchase a particular property based upon its location and ability to fit the needs of the store. Based upon this location, other competitors may be in the same general area and thus attracting the potential for higher traffic volume. Similarly, medical facilities often look for property in the same general area as other medical facilities. This provides convenience to the consumer and ease of access to the various locations that the providers will need to visit.

Papa John's shareholder disputes places company at risk

Better ingredients may make better pizza, but they don't always make better business. When the brand of a company is tied to the identity of the founder and CEO, it may be difficult to salvage the reputation of the product if the founder's own reputation is in trouble. Ohio fans of Papa John's pizza may be following the shareholder disputes that could affect the future of the chain.

The founder of the pizza company, John Schnatter, recently resigned under a cloud when news leaked that he had used a racial slur during a recent conference call. Schnatter says he resigned because the company's heavy-handed treatment of him gave him no choice. In fact, he explained that he had used the offensive word but only explaining that one of his competitors had used it. Schnatter insists he never used the word as a racial epithet and never would, and that he regrets giving in to pressure to resign.

Business planning should consider insurance coverage needs

The concept has been developed, a location has been acquired and employees have been hired. Additionally, the market has been tested and the product or service fine-tuned to meet the needs of prospective clients or customers. These are all important business planning steps for the Ohio business.

While these are all important steps, in today's world it is also necessary to prepare for possible obstacles that may present themselves. Fortunately there are insurance policies that can help to take care of some of these obstacles. For instance, errors and omissions insurance is available. This type of insurance provides protection for the business professional whose advice or recommendation may prove to have a flaw or something is left out.

Kohls facing further business litigation over staff pay

Employers in Ohio and elsewhere do what they can to ensure their staff members are being paid fairly, yet at the same time not to the detriment of their companies. Certain laws allow employers to withhold overtime pay if their employees are classified in a certain way and their job duties meet the necessary requirements for that class. It is not uncommon for employees to fight such classifications, resulting in companies requiring assistance with business litigation.

National retailer Kohls has found itself once again facing misclassification claims. Three employees who are listed as assistant managers say that their classification as managers has caused them to miss out on overtime pay. They say they should be granted the overtime pay as their duties do no primarily consist of managerial tasks. They are seeking an undisclosed amounting compensation.

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