Your investment club will need to decide what type of entity you're going to adopt for business purposes. You'll have to decide whether you're going to be a corporation, a general partnership, or limited liability partnership.
Each of these business models has their own advantages and disadvantages.
- Corporation - Most investment clubs will avoid becoming a corporation. This is because corporations are taxable business entities that require knowledgeable accounting skills to make them run smoothly and in accord with government regulations. A corporation generally means a lot of paperwork. This paperwork can be avoided by choosing another business model for your purpose of running an investment club.
- General partnership - This type of business model requires less paperwork and knowledge about taxes and other financial issues. Most investment clubs choose a general partnership as their choice of a business entity. A general partnership has nominal paperwork and costs associated with it because the taxes are passed to each partner's tax returns. This type of business model will let you accomplish what you need to do to run your investment club with the least amount of tax influence.
- Limited liability corporations - This type of a business model is much like the general partnership but it gives individual members of your investment group a bit more liability protection. Keep in mind that this type of business entity can be expensive and will need more paperwork.
Members of your investment group will have to decide which of the above business models works best for your club.
You will have to make a decision one way or the other since establishing a business entity is a requirement for tax purposes.
Managers know the difficulty of getting people to do the right things the right way. And employees need their expertise and understanding of the way things should be done. But how do you get it across so it actually sticks? The answer is well-defined policies and procedures.
Quickly Convey What’s Right
Managers can convey the exact way things should be done with policies and procedures, and they can do it faster than ever with pre-written documents. This speeds an organization’s standard operating procedures project effectiveness to get results.
Create Strong Operating Procedures
Departmentally-focused manuals provide an excellent opportunity to create strong, consistent Standard Operating Procedures across multiple functions. This includes added savings of time and resources. Departments that benefit with improved results include:
- CEO Management - Build an effective management procedures system based on best practices for the entire organization
- CFO Controller - Simplify the job as a CFO or Controller, and speed the development of comprehensive Accounting and HR manuals
- ISO 9001 Quality Manager - Create ISO 9001 quality policies and procedures manual with prewritten policies, procedures and forms
- Human Resources Manager - Create HR policies and procedures manual with prewritten policies, procedures and forms
- Security Manager - Create complete facility security procedures and disaster recovery plans
Customize to any Business
When researching effective solutions, the content should be well-researched and follow industry-standard formats. Moreover, the applications such as MS Word-based standard operating procedures documents should be easy to edit and simple to customize for any business or organization.
Utilize Essential Procedures
Management should have a solution to implement their entire policy system with essential procedures in one concise, consistent format. And they can do it effectively and efficiently because pre-written documents:
• Saves research time
• Improves procedure writing
• Speeds policy development
• Eases document editing
• Enhances policy knowledge
• Simplifies implementation
The Right Documents
Business owners and executives should select a pre-written policies and procedures package specifically created for a particular management scope. And choose the one that identifies their role and needs.
Maybe you have already heard that in some ways immaterial values are important for business management. But you might not found how to bring them into your management processes or into your reporting packages. However, first of all we should be clear, what immaterial values are? Well, this includes the balance sheet information about intangible assets, but is going far behind it.
As we all know, decisions are mostly based on feelings or emotions, than on logical judgement. A feeling is an energy. Energy is not material, it is immaterial. The overall emotions or motivation of employees in a business is a immaterial value, it could have positive and negative impact on the business development. Does sound very esoterical for you? Might be, but today we know that our emotions drive a lot of our life.
Not only the feelings of the emplyoees have an impact on the business development, also the feelings of potenial customers have it. These customer feelings could be measured as customer satisfaction, as how customers see the company or it’s products and services and so on. There is more energy, which is immaterial, included in our business life as we are aware of.
Until today we might know about these energies or have read that businesses have to be more aware of them. But to find Solutions which are able to measure these energies are not very common and hard to find. Business Management still uses hard figures such as ratios based on financial values and just forgets that there has been more than only the numbers from the accounting and the money in the pocket.
If you only look to the accounting figures of a business, you only look to this company as if you were looking at an iceberg. You only see a fraction of the iceberg, only what is above the surface. Everything below the surface is out of your view. While the iceberg is melting away, it still brings up new parts of it self. But you only see this new parts, when the iceberg is melting. It’s just the same with the accounting figures as soon as you see them they are gone. That means they are old, it’s nice to knew them, but they relate to business already accomplished.
The accounting figures are just like to iceberg when it comes above the surface while it is melting away. Now, wouldn’t it be great to see the whole iceberg, even if a big part is below the surface? Yes, it would be great. The immaterial values of your business are just below surface. If you bring them up, you could see the whole picture of your business.
Running a business only focusing on profit could lead to running into a collapse. It might take time, but soon customers and employees will find out that just the profit counts to a specific company. Well, it’s correct, no business could survive without profit, but first of all every business has to make profit on immaterial items, such as image, motivation of employees and customers faith.
One day from these immaterial profits the financial profit arises. That’s the theory. Propably you already read about this, but have you found a way to measure immaterial values of your business? It’s not that difficult, but it needs some thoughts. First of all it is important to make a list of immaterial values which have the most impact on the business development. When this has been finished, methods to measure and valuate the immaterial values have to be found.
And at last, the values for all the selected immaterial items have to be analysed regularly. Setting up such a Reporting System for immaterial values could be a long lasting task. You might try to do it with a spreadsheet program or with a database, but either way will take it’s time. Using ready made Standard Software might be another option, but there are not much choices. In case you use the Balance Scorecard, you might think having all the data mentioned above and you might think having a good solution for analysation.
The Balance Scorecard has it’s advantages, but for a short, fast and regular analysis of immaterial values it is far to complex and much to slow. There is just the need to measure, store and analyse some data. About 30 items will be enough to have an overview of immaterial values and some material values as well. Most of the necessary data are usually already stored in every business. They only need to be concentrated into one table and have to be analysed.
Are immaterial values important for every business? Yes. This includes big businesses as well as the one-man-business, retail stores, mechanics, freelancer and so on. You may find more information on immaterial values in business management, when searching for Early-Warning-System, Early-Recognition-Sytems and something similar. You are able to find one or the other immaterial value included in Management Methods, Ratio Systems and Financial Analysis. But still, most Reports and Measurement System are based on financial data.
A Solution which every business, no matter of size, could use, is the abenetis ERS (Early-Recognition-System). It is called Early-Recognition-System, because with the used immaterial values every business could be aware of tendencies in it’s business development soon. At the moment the abenetis ERS is available only as Online-Service, but could soon be delivered as Intranet-Version, too. More details are available at our ERS-Subscription Page.
