1.0 Introduction
Business Law Basics >> Each section contains key Action Items located within the downloadable Action Guide >> Click to Download Action Guide.
1.1 Begin with the end in mind – what does that mean?
Begin your business with the end in mind. I’ve seen many entrepreneurs get so excited over the “starting phase” – trying to pick out logos for their company – getting that first office lease. But what is all of this meant to do for you?
One of the primary reasons most businesses fail – and run into legal trouble – is that they’re strapped for cash. They haven’t planned well. The owners have no idea of what it will take to run the business. And worse, they’ve given no thought to what they need the business to generate for them financially as take-home pay.
In addition, if you create a business but haven’t thought about ways to expand beyond just you, you’ll find yourself trapped in the long run. You need to consider how you can structure your business so that ultimately, it won’t need you to be there. When you can do that, you can go on vacation. You can spend time with family. You can do whatever you need or want to do without worrying that “if you don’t work, you don’t eat.”
As you’re thinking about building your business, think about how you structure it, build it, and develop it in a way so that it can run without you.
- Resource: The E-Myth Revisited by Michael Gerber. The myth is that if you’re really good at something, starting a business that does what you’re good at is exactly the same thing. As an entrepreneur, you’re always going to wear 3 hats.
Always think bigger in terms of who can help you get to another level, whether that’s more sales, more business owners, more employees, larger real estate. If you just think about it as you, this is where you’re going to stay. And that’s not what will bring you to a place of what I call “financial freedom”, which is where you’re earning enough from your business that you can take care not only of all your business bills but all your personal needs as well. When you know you’re generating that from your business, I can’t tell you the peace of mind you’ll have.
This has a bearing on your legal issues because it will touch on what you create. How you do the work you do. Whether or not you welcome in investors. The extent to which your company will create valuable intellectual property as an asset you can sell.
1.2 Should you treat your business as a DIY project?
When you become an entrepreneur, the nature of the beast is to take risks to make a profit. Different business owners will have a different degree of risk tolerance. It certainly is not illegal for you to do all of these things on your own. But if you have not been trained in these areas how will you know you’re doing it right? A lot of these issues are more complicated than they appear. Especially with legal issues, they can create some major legal cow pies for your business.
Also, you don’t have the 360-degree perspective on these issues that you need as a business owner, and there’s one more important factor.
You risk developing a puny mindset. If you want to make money from your venture, you have to get past the idea that it’s all about you. Success comes by delegating. By creating a team around you to handle the tasks that you don’t have the training to do well. To bring the issues to your attention that you don’t have the experience to identify. And then to help you implement the plan to address them. Stick with your strengths. Welcome in the strengths of others.
1.3 How do you find and develop an advisory team?
Start with your core team of an accountant, a lawyer, a banker, an insurance professional, and a strategic coach.
- Why you need a banker: you’ll need to open up a separate bank account for your business, and you may need financing or want to have a credit card in the business name for incidentals. Also, networking groups, seminars, or other opportunities for you to meet people who could help you grow your business.
- Why you need an insurance professional: homeowner’s insurance doesn’t necessarily cover your business activities. Or the disgruntled client who sues you for inept consulting services.
- Why you need a coach: provides outside, objective perspective and feedback
How do you find them and choose them?
- Referrals from like-minded businesses
- Bar associations. Local bar associations often have committees, broken down by subject matter.
- Trade associations. Trade associations give you an opportunity to meet the trusted advisors who are serving your industry.
What to look for:
- The A#1 criteria you want to look out for: do they understand your industry or your size of business?
- Ask about the rates; what do they charge and who’s going to be doing the work? If you’re going to larger firms, it may not pay to have the junior associate at the cheaper rate do the work because they don’t have the expertise. You may be better off looking at a smaller firm.
- Ask how you can help keep your attorneys fees down – what can you do to help them help you.
- Speak to colleagues in your industry. Who do they use and how are they working out? Who’s on the speaking circuit? What have they done lately? Have they written articles, tried a case, given a seminar? Are they creative thinkers?
1.4 What are the gaps — staffing or otherwise – that you need to fill?
As you think about where you need expertise from outside of your company, also consider where you’ll need it within your company so that it can run smoothly on a daily basis. Think of all of the tasks that are necessary for your company to run. Lay out all of the tasks or positions.
Go back to your organization chart and ask yourself two questions: (1) which tasks play to your strengths (or tie in to your weaknesses)? (2) In the ideal world, which ones don’t really need you to do them?
1.5 What’s so important about business ethics and corporate culture?
Our world gets more complicated by the day. Maintaining your ethics, and having a business or “corporate culture” that people appreciate is a huge selling point in this market. People don’t know who to trust anymore.
If your potential clients and customers don’t feel they can trust you, there’s a result beyond just the not-so-favorable word of mouth. It can translate into reduced profits, morale problems, decrease in employee efficiency as a result of increased time to answer questions and complaints.
Therefore, when facing a course of action, your fundamental question is not “Can I?” but “Should I?”
Business decisions are also part of one’s overall life decisions, with an impact far beyond the office, not a separate and distinct set of rules that only apply at work.
As to your corporate culture, do you and your company have a mission, a visionary principle that guides you? What do you stand for? Why do you do what you want to do? Customers can get your product or service anywhere. So why buy from you? Are all your activities consonant and congruent with your values and the image you want to project?
Look at the example of Stonyfield Farm (www.stonyfield.com), they don’t just sell yogurt, they have created a community to spread the word about organic products, family farming, and helping the environment.
Henry Ford said, “Business that makes nothing but money is a poor kind of business.”
ACTION ITEMS: Complete the Action Items in your Action Guide.
GET your Advisory Team up and running. List 10 people you would like to be a part of your Advisory Team. Why?
1) Why?
2) Why?
3) Why?
4) Why?
5) Why?
6) Why?
7) Why?
8) Why?
9) Why?
10) Why?
SELECT the top five and try to have each person bring a different strength such as having one lawyer, one accountant, one coach, etc. Contact them and get talking. They will be your resource for future matters in all aspects of your business.
QUICKLY write down a few thoughts that you have regarding the type of culture you want in your business. What is your mission, vision, etc?
REMEMBER, having these items in place is your first step towards protecting you assets. So, don’t pass it off as insignificant.
1.0 INTRODUCTION
1.1 Begin with the end in mind – what does that mean?
Begin your business with the end in mind. I’ve seen many entrepreneurs get so excited over the “starting phase” – trying to pick out logos for their company – getting that first office lease. But what is all of this meant to do for you?
One of the primary reasons most businesses fail – and run into legal trouble – is that they’re strapped for cash. They haven’t planned well. The owners have no idea of what it will take to run the business. And worse, they’ve given no thought to what they need the business to generate for them financially as take-home pay.
In addition, if you create a business but haven’t thought about ways to expand beyond just you, you’ll find yourself trapped in the long run. You need to consider how you can structure your business so that ultimately, it won’t need you to be there. When you can do that, you can go on vacation. You can spend time with family. You can do whatever you need or want to do without worrying that “if you don’t work, you don’t eat.”
As you’re thinking about building your business, think about how you structure it, build it, and develop it in a way so that it can run without you.
· Resource: The E-Myth Revisited by Michael Gerber. The myth is that if you’re really good at something, starting a business that does what you’re good at is exactly the same thing. As an entrepreneur, you’re always going to wear 3 hats.
Always think bigger in terms of who can help you get to another level, whether that’s more sales, more business owners, more employees, larger real estate. If you just think about it as you, this is where you’re going to stay. And that’s not what will bring you to a place of what I call “financial freedom”, which is where you’re earning enough from your business that you can take care not only of all your business bills but all your personal needs as well. When you know you’re generating that from your business, I can’t tell you the peace of mind you’ll have.
This has a bearing on your legal issues because it will touch on what you create. How you do the work you do. Whether or not you welcome in investors. The extent to which your company will create valuable intellectual property as an asset you can sell.
1.2 Should you treat your business as a DIY project?
When you become an entrepreneur, the nature of the beast is to take risks to make a profit. Different business owners will have a different degree of risk tolerance. It certainly is not illegal for you to do all of these things on your own. But if you have not been trained in these areas how will you know you’re doing it right? A lot of these issues are more complicated than they appear. Especially with legal issues, they can create some major legal cow pies for your business.
Also, you don’t have the 360-degree perspective on these issues that you need as a business owner, and there’s one more important factor.
You risk developing a puny mindset. If you want to make money from your venture, you have to get past the idea that it’s all about you. Success comes by delegating. By creating a team around you to handle the tasks that you don’t have the training to do well. To bring the issues to your attention that you don’t have the experience to identify. And then to help you implement the plan to address them. Stick with your strengths. Welcome in the strengths of others.
1.3 How do you find and develop an advisory team?
Start with your core team of an accountant, a lawyer, a banker, an insurance professional, and a strategic coach.
· Why you need a banker: you’ll need to open up a separate bank account for your business, and you may need financing or want to have a credit card in the business name for incidentals. Also, networking groups, seminars, or other opportunities for you to meet people who could help you grow your business.
· Why you need an insurance professional: homeowner’s insurance doesn’t necessarily cover your business activities. Or the disgruntled client who sues you for inept consulting services.
· Why you need a coach: provides outside, objective perspective and feedback
How do you find them and choose them?
· Referrals from like-minded businesses
· Bar associations. Local bar associations often have committees, broken down by subject matter.
· Trade associations. Trade associations give you an opportunity to meet the trusted advisors who are serving your industry.
What to look for:
· The A#1 criteria you want to look out for: do they understand your industry or your size of business?
· Ask about the rates; what do they charge and who’s going to be doing the work? If you’re going to larger firms, it may not pay to have the junior associate at the cheaper rate do the work because they don’t have the expertise. You may be better off looking at a smaller firm.
· Ask how you can help keep your attorneys fees down – what can you do to help them help you.
· Speak to colleagues in your industry. Who do they use and how are they working out? Who’s on the speaking circuit? What have they done lately? Have they written articles, tried a case, given a seminar? Are they creative thinkers?
1.4 What are the gaps — staffing or otherwise – that you need to fill?
As you think about where you need expertise from outside of your company, also consider where you’ll need it within your company so that it can run smoothly on a daily basis. Think of all of the tasks that are necessary for your company to run. Lay out all of the tasks or positions.
Go back to your organization chart and ask yourself two questions: (1) which tasks play to your strengths (or tie in to your weaknesses)? (2) In the ideal world, which ones don’t really need you to do them?
1.5 What’s so important about business ethics and corporate culture?
Our world gets more complicated by the day. Maintaining your ethics, and having a business or “corporate culture” that people appreciate is a huge selling point in this market. People don’t know who to trust anymore.
If your potential clients and customers don’t feel they can trust you, there’s a result beyond just the not-so-favorable word of mouth. It can translate into reduced profits, morale problems, decrease in employee efficiency as a result of increased time to answer questions and complaints.
Therefore, when facing a course of action, your fundamental question is not “Can I?” but “Should I?”
Business decisions are also part of one’s overall life decisions, with an impact far beyond the office, not a separate and distinct set of rules that only apply at work.
As to your corporate culture, do you and your company have a mission, a visionary principle that guides you? What do you stand for? Why do you do what you want to do? Customers can get your product or service anywhere. So why buy from you? Are all your activities consonant and congruent with your values and the image you want to project?
Look at the example of Stonyfield Farm (www.stonyfield.com), they don’t just sell yogurt, they have created a community to spread the word about organic products, family farming, and helping the environment.
Henry Ford said, “Business that makes nothing but money is a poor kind of business.”
ACTION ITEMS: Complete the Action Items in your Action Guide.
GET your Advisory Team up and running. List 10 people you would like to be a part of your Advisory Team. Why?
1) Why?
2) Why?
3) Why?
4) Why?
5) Why?
6) Why?
7) Why?
8) Why?
9) Why?
10) Why?
SELECT the top five and try to have each person bring a different strength such as having one lawyer, one accountant, one coach, etc. Contact them and get talking. They will be your resource for future matters in all aspects of your business.
QUICKLY write down a few thoughts that you have regarding the type of culture you want in your business. What is your mission, vision, etc?
REMEMBER, having these items in place is your first step towards protecting you assets. So, don’t pass it off as insignificant.
PRESIDENT'S CLUB