Compliance with Regulations and Exit Strategy portion at the Business Plan

Deficiency in Many Business Plan

 


 

For the last 3 terms, the contents of this portion of the BP submitted have been very scanty, or non existent.  They are important parts of a business plan.  Maybe more pages are needed.

Compliance with regulators.

There are many laws that govern the operations of business.  That is why lawyers and consultants are needed in order to comply.  Heavily regulated industries include:   energy, transportation, banks, food real estate and all the industries that impinge, affect the public.  Penalties are incurred, even closure may be impending for violation.

Regulators are both local and national:

Local:   barangay, town:   mayor's permit, real estate tax, building permit, BFP fee, sanitary permit, garbage fee; occupancy permit, Zoning, PNP





National:   SEC, DTI, BIR, BOC and other governing agencies in charge of the industry;   For special economic zones:  PEZA, BOI.  SBMA,   CDC,  etc.

Philhealth, SSS, Pag ibig.

DENR for ECC,  HLURB for subdvision projects, DOH for Sanitation code, FDA for food industry,  CB for banks, Marina for shipping, Coast Guard.

International 

Aside from that:  if you travel abroad we comply with foreign countries custom duties and tax.  etc. when you are engaged in export and global marketing.   The culture and social practices to contend with is another matter, and sometimes have the effect of rules and regulations

Many rules and regulations to comply.

We cant manage this with 3 liners in the BP portion

Exit strategy

They consist of 3 parts;  1.   contingency measures,  2.  selling out or going public 3. succession and  multiplying, subtracting, dividing and adding to the business.

1.  Contingency:

What do you do in case things do not turn out well?  Will you sell to third party, let somebody take over, suffer a loss and sell your stuff at a fire sale?  What are the red flag that indicate that you must bail out

2.  Selling out

Contrary to popular beliefs, you do not amass wealth by asset accumulation, dividends, or royalties, interest income, or salaries.  Money and wealth are created by selling out and having capital gains.  Bill Gates and Mark Z became wealthy when they had IPO.  You do not know if owners of private held corporations are rich or not because there are no stock prices, nor # of shares on which you can base your estimate of their wealth.

The tycoons of the PHL suddenly became wealthy when their corporations went public.

3.  Succession

Will you run your company forever?  Will you not retire?  Who takes over when you retire?  Are you preparing for your succession whether its  a family owned corp or not?  What is your timeline?

Are you going to donate the company to your children?  What are the tax implications?

Are you going to do a simulated sale;   will you execute living trust, or will and testament?

Or are you going by way of incorporating everything under a family holding company?

Or utilize a foundation to handle succession/inheritance?

Take your pick.

But mind you, in your BP, this two items deserve a lot of attention, discussion, and space/pages.