Here are five things that happened this past month that affect your small business. 1) The G20 backed historic corporate tax reform at the latest summit. Another step forward for proponents of a global corporate minimum tax: At the first face-to-face G20 meeting since the start of the pandemic, “a landmark proposal to stop multinational companies from shifting profits to low-tax havens was endorsed.” (Source: Yahoo! Finance) Why this is important for your business: Companies with international operations would see changes to their taxation under this proposal ¬- but it’s still a long way from being adopted. Stay tuned. 2) The US recession actually lasted only two months. While difficult times for many individuals and small businesses lasted much longer (and for some are still continuing), “the U.S. recession touched off by the coronavirus lasted only two months, ending with a low point reached in April 2020 after the start of a sharp drop in economic activity in March of that year.” (Source: Reuters) Why this is important for your business: While the country had “by no means gotten back to normal operating capacity at that point,” it is helpful to be aware that the recession was the shortest on record. This may feed arguments in favor of the “cash first” approach policymakers took, including the extensive financing for small businesses. 3) Restaurant workers are quitting at a record rate. There are a variety of reasons – including the high-stress culture – but pay is high on the list. “Low wages are the most common reason people cite for leaving food service work. But in one recent survey, more than half of hospitality workers who’ve quit said no amount of pay would get them to return.” (Source: NPR) Why this is important for your business: If you operate in any sectors related to the restaurant industry, you’ve no doubt encountered businesses who are having staffing difficulties. Some may choose to raise wages, while others might wait it out to see if things revert to “normal.” 4) The economy is expected to cool off going forward. “The U.S. economy’s 2021 growth surge likely peaked in the spring, but a strong expansion is expected to continue into next year,” said economists surveyed by The Wall Street Journal. The bounce back from the recession prompted “red-hot” growth, but that burst is expected to slow. (Source: The Wall Street Journal) Why this is important for your business: This isn’t a bad thing. We’re past the peak for economic growth and have moved “into the more moderate phase of expansion.” Job gains, personal savings, and fiscal support are expected to keep the economy growing solidly over the next year. 5) During the pandemic, 1 in 5 business owners were on the brink of closing forever. A new study by OnePoll found that “One in five small business owners came frighteningly close to shuttering their business for good during the COVID-19 pandemic.” Additionally, 3 in 4 respondents said the past year was the most difficult they’ve ever faced in the life of their business. (Source: Study Finds) Why this is important for your business: If you’re one of these business owners, it’s helpful to know you’re not alone.

Human beings are visual learners – they always have been, and they always will be. A big part of this has to do with the way that the human brain works. According to one recent study, when people hear information, they generally only remember about 10% of what they’re exposed to. If that information is paired with relevant visuals – be it in the form of a video or even static content like a photo or infographic – they remember 65% of it on average. All told, it’s estimated that between 51% and 80% of all businesses in every industry will rely heavily on visual content in 2021 – a trend that shows absolutely no signs of slowing down anytime soon. That, in essence, is what Canva is all about. Canva is a graphic design platform that can be used to create visual content like social media graphics, presentations, posters and more – all via an app that includes templates that make it easy to create the stunning content you need. The platform itself is available for free, although it does offer paid subscriptions through its “Canva Pro” and “Canva for Enterprise” tiers that unlock additional features for power users. Not only can users create content that immediately exists online, but they can also pay for physical products to be printed and shipped to customers – allowing brands of all types to make meaningful connections with their target audiences. In April of 2021, Canva reached a $15 billion valuation – simultaneously making its co-founders Melanie Perkins and Cliff Obrecht billionaires. This came less than a year after securing a $6 billion valuation, even though the COVID-19 pandemic was still making its way around the world. But what may seem like an overnight success was, for those co-founders, anything but. The story of Canva wasn’t always easy – but it is one that can inspire entrepreneurs and businesses professionals everywhere moving forward.Canva: The Story So Far The idea that would go on to become Canva began in January of 2012 in Perth, Australia. It was then that Perkins, Obrecht and a third co-founder – Cameron Adams – saw a market that was in desperate need of being filled. The company began simply enough: They wanted to “make design accessible to all.” It didn’t matter what you actually needed those design services for – logos, business cards, presentations, or something else entirely. When Perkins and Obrecht were studying in college in Perth, the duo would earn side income by teaching other students various design programs. After determining that some of the platforms offered by companies like Microsoft and Adobe had too much of a learning curve, they decided that there had to be a better way. But when they couldn’t find it, they decided to create that “better way” themselves. The duo – now a couple – started an online school yearbook design business, that was then called Fusion Books. They immediately launched a website that let users collaborate and build their profile pages, articles and other content that would then exist in those online school yearbooks. Perkins and Obrecht would then print the yearbooks, after which they would deliver them to schools across the country. The business was a success, but the pair didn’t want to stop there. They wanted to go bigger, and they had ideas on how to do it. In 2010, Perkins had an encounter with an investor from Silicon Valley who saw the potential in such an idea. That investor introduced her to a few contacts, at which point they began to develop their idea even further. With the help of a few technology advisors and after the close of their first funding round, Canva was born in earnest – and the rest, as they say, is history. In its first year after launching, Canva had more than 750,000 active users. Now focused on marketing materials, its revenue increased from an already impressive $6.8 million to an enormous $23.5 million during the 2016/2017 fiscal year alone. Just one year later, in 2018, the company had raised more than $40 million from various investment firms and was already valued at $1 billion. The point of all this is that there is truly no idea too small (or too niche) to make an impact. Melanie Perkins and Cliff Obrecht were tired of spending time teaching complicated graphics programs to fellow students, so they decided to create a platform of their own to eliminate as much of the “hard work” as possible. That simple idea turned into something much larger than either of them could have imagined. For an entrepreneur, something like this isn’t just a success story – it’s a critical moment of inspiration to guide all their efforts moving forward.

When you’re in the midst of building or growing a business, the last thing on your mind is what happens if the owner suddenly dies. If the business was established as a partnership and the surviving partner has equity in the business, then a buy-sell agreement can provide a quick solution, particularly if there is an insurance policy that’s been set up specifically to facilitate the buyout. Those who worked with an experienced attorney or accountant when setting the business up generally have the good fortune of having a plan in place whether there’s a partnership or not, but that is not always the case. The absence of the driving force behind a business affects employees, customers, and the family members who may have relied on the organization for income. If you find yourself in this unfortunate situation, you need to know the steps available, and how best to approach the many issues that will arise. The First Decision: Whether to Save the Business or Not Though the knee-jerk reaction to the death of a business owner may be to try to keep the business going, that is not always the best or smartest answer. Every situation is different, and decisions need to be made from a practical standpoint rather than an emotional one. If the business owner was a professional and the entire entity was dependent upon them, their strengths, skills, and personality, then no amount of good intentions is likely to save the business. Imagine trying to continue to run a medical practice with a new physician. Though some patients may stay on, the majority are likely to move to another practice in order to ensure the continuity of their care. The exception to this would be where there was already a partnership, or an heir of the business owner is able to assume their responsibilities in a way that makes the clientele comfortable. But even that transition represents a risk, as the time between the death and resetting the business is likely to be filled with costs for which revenue is not being generated. Making a determination about whether to preserve and continue a business requires planning, realism, and perhaps most important of all, cash. Unless the estate has the funds available to keep things afloat while a new plan is agreed to, the challenges are likely to mount. In the absence of a contingency plan with funds set aside to support it, the business owner’s estate is free to decide to walk away from the business. In many cases the value of the operation may have rested almost exclusively on the deceased individual’s popularity and relationships with clientele, and when that is the case the decision is clear, though often painful. Walking away from a business can feel like a second death, and it is easy to feel compelled to try to save the owner’s creation – but doing so can lead to financial losses that make the death feel even more painful. Step One to Preserve a Business After the Owner’s Death If, after reviewing the advantages and disadvantages of trying to preserve the business, you make the decision to either sell it or find a way to continue operations, the estate will need to switch legal control of the business over to a dedicated personal representative of the estate. If the selection represents a challenge due to differing opinions, the court can appoint a curator to step in temporarily. Most states allow this person to assume all of the business and estate responsibilities that a permanent representative would have, while others assign an administrator ad litem who has powers limited to making business decisions. In the latter scenario, a separate individual would be assigned to overseeing matters surrounding the estate. When time is of the essence in preserving a business, the court can appoint a curator extremely expeditiously: In some cases, a death certificate will not have been issued and a curator will already have been appointed. Though this may seem overly hasty, and maybe even disrespectful, there are legal issues, customers, employees, and other administrative tasks involving bank accounts and financial institutions that require continuity. Control of the Business’ Bank Accounts One of the most important things that a newly assigned curator will take charge of is the business’ bank accounts, especially if the deceased owner is the only signatory. Banks will not allow checks to be written or withdrawals to be made without an authorized person’s signature, and they will freeze all accounts once they learn of a business owner’s death. This means that bills will not be paid, employees will not receive paychecks, and those limitations will lead to services or goods not being provided. Once legal control of the business has been established, whether permanently or temporarily, the bank needs to be made aware of the new person’s identity and must be provided with legal documents that prove their authority. This may involve having the curator or estate representative name themselves the new president so that they can inform the bank and provide a new signature card. Control of the Business’ Digital Assets Today’s business environment is heavily reliant upon a digital, online presence, and that means that the curator, executor, administrator, or other decision maker will need to gain access to passwords so that they can control those assets. Laws are beginning to be passed to facilitate the transfer of this information, including in California where a Uniform Fiduciary Access to Digital Assets Act has been passed. This new legislation provides authority over digital assets to those who are fiduciaries of a business. Fiduciaries are those that the court has recognized as having authority in the absence of explicit instructions from the deceased business owner. This is another example of how having guidance from an attorney or accountant early in the establishment of a business can pre-address issues and head off potential problems. Selling the Business If the decision is made that the business is to be sold, it is essential that an outside entity such as a business broker is brought in to provide reliable, data-driven information on the business’ value. Business brokers do receive a commission on completed sales, and many people are concerned that they might boost the value in order to increase their commission. But commissions are only provided once a sale has been complete, and an unrealistic number is unlikely to attract a serious buyer. When working with a broker, ask them how they arrive at the value that they assign. Their research should be based on industry information. If a broker expresses disinterest in handling the sale, it’s a good idea to quiz them as to why — in some cases the issue may be a lack of familiarity or available information to fulfill the assignment, but in other instances they may not see the sale as a legitimate possibility, and therefore not worth their time. Their explanations can provide you with valuable insight. There are some scenarios where there is an obvious prospective buyer. This may be a competitor or an individual who has long worked alongside the deceased owner. This is often the easiest and most sensible option, as well as the one that is most likely to deliver favorable, uncomplicated terms. Working with a friendly buyer can expedite the process and alleviate stress. Be Aware of Personal Guarantee Issues After the death of a long-time owner, many vendors and creditors become gun-shy about doing business with a new individual, and this is particularly true for items or services that represent significant expenses. The problem is often addressed by asking for a personal guarantee from the new owner – but offering one may not be a good idea. Making long-term decisions and commitments is generally not advised until the disposition of the business has been resolved, so issues such as whether to sign a new lease or to purchase a new piece of equipment is better left until after that larger decision has been made. If you are the heir to a business owner who did not leave explicit instructions about what to do with their business and the topic has never come up, there’s a good chance that they assumed or intended that their business would die with them. Even if that is the case, it is helpful to spell those intentions out, and especially to take out an insurance policy that will help carry survivors through the time it takes to shut the business down or close it.

Whether you are a physician with a well-established medical office, or you’ve just completed your residency and are getting set up, obtaining funding for a medical practice is different from applying for a standard business or personal loan. Though those differences do not necessarily mean that the process is more difficult, they do mean that you need to carefully assess your needs and identify the approach that fits them best. To help, we’ve assembled the following list of must-know items specifically designed to facilitate medical practice funding:

There are special Medical Practice Loans, especially designed for healthcare professionals. Doctors, dentists, and other healthcare professionals can always apply for standard loans, but the specialized medical practice loans available online and through big brand banks like Wells Fargo and Bank of America were created around the realities of running a medical practice. That means that they offer access to the higher level of funding that is usually required while also taking into account elements such as the existence of medical school debts as well as the probability that your practice is likely to earn significant revenue as it becomes more established.
Consider equipment financing instead of a Medical Practice Loan Though your first instinct may be to apply for a more typical loan, if you’re planning on buying medical equipment then equipment financing may make more sense. Though these loans may require a down payment, and use the equipment itself as collateral, they enable 100% financing of the acquisition and are structured so that repayment is completed at the end of the anticipated useful life of the asset. This is a superior outcome to having a loan that will continue long after you’ve replaced the equipment – especially if you will need to purchase something to replace it and take out an additional loan. Paying two loans at once – with one being for an asset that you no longer have – is something you definitely want to avoid.
A Small Business Administration Loan may be a good fit for you The Small Business Administration has well-established relationships with lenders that can offer up to $5 million in funding through the 7(a) loan program, while also guaranteeing a portion of the loan for the lender. This additional protection makes lenders more likely to extend a loan, offering rates that are competitive and can be used for almost any purpose. Note that the SBA will not extend a 7(a) loan to an unestablished business – which eliminates this option for those who have just graduated – but they do have other loan products available for newer businesses.
Lump sum funding through term loans If you need a specific amount of money and are looking for a fixed low interest rate, term loans are another good option, especially if you have good credit. You can use the money for anything and pay it off over a predictable term that can range from 12 months to 5 years or more, though compared to medical practice loans or SBA loans, the amount of funding may be limited.
Business line of credit Another alternative to taking out a loan for a specified amount of money is applying for a business line of credit that allows you to access as much of your total revolving line as you need, leaving the balance available and only having to make payments for what you use. This is a particularly good option for managing continuous expenses or those that have financial needs that arise intermittently. The downside of a line of credit is that the rates may be higher than that of other loans, but that aspect is offset by the ability to only use what you really need.

Once you’ve decided on the right loan product, all that’s left is the application process. It is not all that different from applying for any other type of loan, but since financing a medical practice is so critical to your success, you’ll be smart to do your homework and be prepared. The following steps will be helpful:

Know what your lenders are going to see when you apply by checking your own credit report and score.
Prepare an updated set of financial statements that include current profit and loss statements and an assessment of your practice’s financial health, including cash flow.
Be prepared to put business equipment or personal assets up for collateral on loans.
Those who are just starting out will need to compile details about what they will need to purchase and what they expect to make, as well as a comprehensive business plan.
Those who have been in practice for a while and who plan to expand need to detail their growth objectives. Having a plan for new acquisitions or changes will demonstrate that you are working towards a specific, attainable goal.
Know what each type of loan requires to meet eligibility requirements to optimize your ability to be approved.
Understand exactly what your chosen lender expects to see in terms of documentation and make sure you have copies of each in order to expedite the underwriting process. These may include income tax returns, bank statements, and more.
Take the time to read through the terms of any loan that you’re applying for to ensure that you will be able to comply. Knowing that a loan is right for you goes well beyond the interest rate you’re going to pay and loan fees. Read the small print to make sure that there are no surprises and that you’re choosing the loan product that is most suitable for your medical practice’s needs.

If you have questions about the financial aspects of your medical practice, please contact our office.