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One area that makes E-2 investors particularly nervous is the hiring plan.
They understand that the government does not want to see a business that simply provides a living for the investor and the investor’s family. USCIS defines a marginal enterprise in those terms and also recognizes the future capacity of a business to make a significant economic contribution.
That often leads applicants to an understandable conclusion: the more employees I show in my business plan, the stronger my case will look.
That can create a completely different problem.
We recently saw the same concern expressed by an E-2 investor online who was buying an existing landscaping company. The business was already performing well, but the investor was struggling with the five-year projections. He couldn’t understand how he was supposed to know exactly how many W-2 employees the company would need four years from now, and he didn’t want to manufacture aggressive growth simply to make the immigration case look better.
It’s a reasonable concern.
At Visa Business Plans, when we develop a staffing plan, we don’t start by deciding how many employees would look impressive to an immigration officer.
We start with the business.
Let’s say you’re opening a residential cleaning company. You expect to begin with a relatively small number of clients and add customers gradually through referrals and marketing.
Hiring eight cleaners during the first year may create an impressive organizational chart. But if the revenue projections only support enough work for three cleaners, then the business plan has a credibility problem.
The staffing plan and the financial projections are telling two different stories.
Instead, we would look at how the company is expected to grow and build the hiring around that growth. As the client base grows, another cleaning team may become necessary. As the owner spends more time developing the business, an administrative employee may eventually make sense. Later, the volume of work may justify a supervisor.
Now the positions have a reason to exist.
The same analysis applies to salaries.
If the plan shows five employees earning a combined $250,000 by Year 3, the business needs to generate enough revenue and gross profit to reasonably carry that payroll along with rent, marketing, insurance and every other operating expense.
Otherwise, we’ve created another problem while trying to solve the first one.
This is why five-year projections shouldn’t be treated as a guessing exercise.
Nobody knows exactly what a business will look like five years from now. A projection isn’t a promise that Employee Number Four will start on March 1 of Year 3.
It is a reasoned picture of how the business is expected to develop based on the information available today.
And there should be logic behind it.
At Visa Business Plans, we connect the staffing plan to the operational plan and the financial projections. If we’re showing another employee, we want to understand what that person will do, why the business will need the position at that stage, what the employee will cost and whether the projected revenue can support the hire.
Sometimes that means a business will show significant hiring.
Other businesses simply don’t require large teams to operate successfully.
That distinction matters, particularly as business models change. A company that relies heavily on technology or outside service providers may have a very different staffing structure from a restaurant, construction company or retail operation.
The goal shouldn’t be to squeeze all of those businesses into the same organizational chart.
It should be to present a staffing plan that makes sense for the company you’re actually planning to operate.
A five-year E-2 business plan will always involve assumptions. That’s the nature of projecting the future.
Those assumptions don’t have to be guesses.
They should be decisions you can explain.
Contact us today to get started
The information provided in this blog is intended solely for informational purposes. While we strive to offer accurate and up-to-date content, it should not be considered legal advice. Immigration laws and regulations are subject to change, and individual circumstances can vary widely. For personalized guidance and legal advice regarding your specific immigration situation, we strongly recommend consulting with a qualified immigration attorney who can provide you with tailored assistance and ensure compliance with current laws and regulations.
Visa Business Plans is led by Marco Scanu, a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in four different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.
Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital, and high-growth enterprises.
At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based boutique consulting firm providing attorneys and investors with business planning services in the areas of U.S. and Canadian immigration, SBA loans, and others.
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