Do You Wish There Was a Clear, Simple Formula to Starting A Business That Made It Easy to Get Profitable and Protect Your Assets? Take the Stress Out of Start-Up With My 3 Simple Steps.
I started my first business in my kitchen 8 years ago. It seemed like there was just so much information out there, plus the well-meaning advice of family and friends, that I just had no idea what to do first. Did I start an LLC? Did I need to get a bank loan? Should I hire people to help me? Would I lose my house if I failed? Everyone and their brother had a different opinion.
I know how frustrating starting a business can be. After owning several businesses over the last 8 years, and now having helped hundreds of entrepreneurs through my business law practice, I’ve developed a clear, simple, 3 step framework to give new business owners the best chance at a profitable business that protects their assets.
Today, I'm launching a free training that will reveal the three simple steps I walk my start up clients through that makes sense of all the start-up noise. If you'd like to grab a spot on this exclusive training, you can register HERE.
I help a lot of corporate refugees who are type A, super go-getter people that have been very successful in a career job working for someone else. Despite their success, they still feel like something is missing and over time, become resentful that their skills, talents and some of the best years of their life are spent making someone else rich. They yearn to build something of value for themselves and have flexibility to spend time with their family and cultivate hobbies. One day, the light bulb goes off and they decide to start their own business.
Because they've been super successful in their job, they are excellent at what they do. They assume this will translate to being a successful business owner. Often, they are lacking three critical skills that would lead to business success. Without these skills, they are doomed to fail. What are these skills?
1) Ability to Always See the Big Picture. Folks coming from a corporate job tend to be relentlessly focused on details. While the ability to focus on details is certainly necessary for a successful business, often people can't see the forest through the trees. They get so wrapped in minutiae of EVERYTHING, from their business name, to logo colors, to the font on their proposals, that they fail to focus on the important parts of starting a business, mainly, STARTING. Their drive for perfection paralyzes and prevents them from taking the most important actions to getting the ball rolling, namely just getting out there and making sales.
2) Delegate. This is a tough lesson for many to learn. Those that have achieved success in other areas of their life want to control every detail. They've been burned by inept team members in the past. Used to playing office politics and living under an imposed corporate hierarchy, they don't trust others to complete what they themselves think they can do better. As a business owner, this behavior is most likely to lead to failure, if not just a painful life as a business owner. Any successful business will eventually require help from others to run. The owner needs to be able to delegate tasks to others. Beyond just delegating the tasks, the owner needs to trust others to complete the tasks well, and realize that just because someone does something a bit differently than you might have done it, the important things is that it's done. This skill can be acquired with the proper training and systems in place, but many business owners are reluctant to delegate any tasks to begin with.
3) Mindset. I tell all of my clients being in business is all about mindset and managing your thoughts. It's a roller coaster of ups and downs and you have to be able to stay steady in the face of uncertainty. Many people focus so much on developing sales skills, marketing prowess and financial savvy, but they neglect mindset. Eventually, their emotions run amok and that can lead to bad decisions. Owners need to be able to keep a clear head and while listening to the gut can serve one well, it doesn't mean indulging every wild emotion that arises.
If you've ever thought about leaving your corporate life behind and striking out on your own, a successful career working for someone else doesn't always translate to being a successful business owner. With an open mind and a willingness to adapt, you'll have a much better shot at success.
For business owners looking to expand and grow their business, a critical component is hiring help. More than any other area we get inquiries about, this one is FULL of misinformation that can get a business owner in BIG trouble.
Here are the top mistakes we see business owners make in hiring employees:
1) I can't afford to put someone on payroll, so I'll just hire them as an independent contractor.
Total Red Flag! I can't even begin to explain to people how this can land someone in huge, deep, like depths of the deepest ocean legal trouble.
First, someone is not an independent contractor, or freelancer, just because you say they are. There are a number of government bodies interested in whether you are misclassifying a worker as an independent contractor just to avoid payroll taxes. This includes your state bureau of workers' compensation, unemployment, the IRS and state payroll authorities. All have different tests for whether someone is really an independent contractor or should be on payroll. There is no black and white rule or test for this, the government looks at a range of factors generally around how much you try to control them. The more you have to train someone, tell them what to do, provide them with tools, equipment, or a place to work, how to do something, etc., the more they should be a payroll employee, not an independent contractor.
But, I made them sign an agreement that says they're an independent contractor, so doesn't that make it so? NO. The government doesn't care what you had them sign. They care about what you actually do in practice. If it looks like a duck and quacks like a duck, even though it signed a contract saying it's a cow, it's still a duck.
2) Not using proper non compete, non disclosure and confidentiality agreements. So many business owners are either afraid to use these types of agreements at all for fear of upsetting their employees, or they use ones that are overbroad and not likely to stand up in court. Restricting your employee from working for any competitor in the entire country for the next five years is really broad. A proper non compete should be tailored to the situation.
Non disclosure and confidentiality agreements should make it clear that employees should take all measures to keep company trade secrets a secret. Being sloppy about trade secrets and their protection can come back to bite you big time. Make sure these documents have been vetted by an attorney.
3) Not having written policies and procedures. A lot of times a business owner will go it alone or depend on their payroll company for hiring and issue a flurry of generic documents to their new hires. A few months later, when they start having a problem with an employee, they call me and want to know how they can fire this person without getting sued. When I ask to see their policies and history of documenting the problem, they have nothing. Paper trails are critical in employment matters. Regular reviews and written feedback will help to fire a problem person and help you fight an unemployment claim if necessary down the line.
If you're a business owner looking to expand and hire or get your employment documents in line, reach out and set up a call to discuss.
So many clients get nervous about contacting a lawyer because they've heard all kinds of horror stories about attorney billing. Usually, clients are concerned about high hourly rates and runaway time spent on a file that equals tens of thousands of dollars in billing. When people contact my firm, one of the first questions they ask is typically, "what are your fees?"
While every matter is different and sometimes there are complicating factors to a situation that will result in a higher fee, most of the services we offer to business owners are done for a set, flat fee. Particularly for a start up business, we offer comprehensive packages where a new business owner can get all of the initial legal work done at once for a reasonable price. We include things like business plan review, a strategy consult, business license application, LLC or other entity formation, custom contract, commercial lease review and trademark registration.
Already in business? We offer packages for existing business owners as well, particularly those interested in intellectual property and trademark registration and those looking to hire employees.
To view our current list of flat fee legal services, check out our packages.
When a small business owner has realized the dream of running a successful business, often the next step is to expand. Growing a business to the next level requires as much, if not more, careful planning and research as was given to the original dream. It would be unwise to take an already successful business to the next level without doing your homework.
There are a variety of ways to effectively expand your small business. To be successful, careful consideration should be given to the areas listed below:
To effectually know your target demographic as well as continuing supply and demand, you will want to conduct extensive market research. Look to the future to see if your product or service is sustainable in the market. You will also want to determine who your main competitors are, who their target demographic is and what geographic areas they serve.
If possible, you may want to expand into new territories and/or carve out your own little corner of the market to focus on. By doing so, you can eliminate some of the competition. Another consideration is the cost of your product. If you find it necessary to substantially raise your prices in an effort to fund your expansion, you run the risk of losing customers. You need to consider what your target demographic is able and willing to spend.
A lot of useful, demographic information can be gleaned by going to your local Chamber of Commerce. Other helpful information can be discovered by connecting with consumers through social media.
Marketing and advertising efforts are key to the success of a growing business. These days, there are many inexpensive and free advertising opportunities to take advantage of. We are fortunate to live in a time where we can connect with consumers with the touch of a button.
Consumers want to know what other consumers think. Invite consumers to follow your web page. It can be wise to create a social media page and post videos of satisfied customers singing your praises. By interacting with consumers, you can keep on top of who you are serving and how you are doing in the quality and satisfaction departments.
That being said, you definitely want to be sure to earmark money for marketing and advertising.
It is important to get the word out that you are growing and what you have to offer consumers. Ideally, you want potential customers to get as excited as you are. You may have an invaluable product or service, but you need to make sure you reach as many consumers as possible with all of the pertinent information. Your efforts will benefit from a healthy marketing budget.
Develop a Plan for Expansion
Growing your small business often requires investments of both time and money. For this reason, it is imperative to develop a feasible business expansion plan in advance. Much like when you were just starting out, you will want a schedule of projected goals and milestones to keep you on track with your expansion.
This plan should outline key concerns including, your target demographic, competition, supply and demand, marketing techniques and, probably most important, spending. The entire plan tends to revolve around finances. By projecting a clear financial picture of what your expansion will entail, you can avoid getting in over your head.
Considerations for your financial forecast should not be limited to the funding of your product or service. You will want to build money into your plan to cover additional marketing/advertising, and the salaries of additional employees that may be required to successfully run your growing business. You may find that you will need to apply for a business loan or bring in investors, which will require just such a plan. Anyone who is considering investing in your business will want to make sure that you have an attainable action plan, and that they are making a wise financial decision.
Don’t discount tweaking your existing product or service to appeal to another demographic. You may even want to add an entirely new product or service that appeals to a different group of consumers. By doing so, you can reach out to potential new consumers and keep your existing ones.
When considering diversifying, you may want to partner with other business and pull your resources. It is always an option to seek out other small businesses and pull your resources. You may find another small business that offers a completely different product or service that compliments your own. By doing so, you may be able to introduce yourself to an entirely new group of consumers as well as benefit from the other business’ strengths.
Partnering with other small businesses isn’t for everyone and it is always wise to do your due diligence before stepping out in this direction.
When expanding your business operations, you want to stay current and competitive. Make it your business to stay up to date on technology in your area of business. It is no secret that technological advances are popping up every day. Technology can be both good and bad for an expanding business, so it is best to weigh your options.
Technology can help you upgrade your manufacturing process as well as your facilities. By upgrading, you can be more efficient and easily expand your operations. You will want to keep on top of new developments and know what advances you can benefit from. Additionally, being aware of how your competitors are using the same technology can be helpful. Learning from their successes and failures will be an invaluable tool.
While you don’t want to be left behind in the technology arena, it comes with a price. That being said, you must carefully consider how this expense will affect your bottom line. If you have to pick and choose how to spend your technology dollars, carefully consider your true needs are and which ones will give you the most bang for your buck.
If you are considering buying a business, this is quite possibly the biggest financial decision you will ever make; even more so than purchasing a home. After all, your business is your livelihood. If your business isn’t successful, it can have a devastating trickle-down effect. Prior to buying an existing business, you will want to evaluate all of your options and risks prior to making any binding decisions and/or signing on the dotted line.
That being said, nothing is more important than doing your due diligence. As defined, “due diligence,” in regard to buying a business is, “a comprehensive appraisal of a business, undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential.” By taking the time and effort to do your homework, you can possibly save yourself some unnecessary, costly and nasty surprises.
Due diligence is by no means a “general” investigation. Due diligence requires an in depth, almost invasive (if you will) investigation prior to buying a business. Even if you think a seller is being completely forthcoming, you owe it to yourself to verify the information you have been given. Don’t be worried about offending anyone; again, this is your livelihood. It is imperative that you enter the “deal” with eyes wide open!
So, what does due diligence involve? Excellent question! Below are some tips that may be helpful when buying a business to make sure you know exactly what you are getting into.
There is no shame in asking (an abundance) of questions. If you ask questions and are met with resistance, or have an uneasy feeling, this (may) not be the deal for you. If it doesn’t feel right… it probably isn’t!
With the assistance of your attorney, the due diligence process should involve all concerned parties; meaning both buyers and sellers. As a buyer, if you are not completely satisfied with the information you have gathered… WALK AWAY!
Starting a new business can be an exciting experience. It can also be a little scary because there are always risks involved. Careful planning is essential for any potential new business venture. By doing your “homework,” and being prepared, you can avoid unforeseen situations and get your business off to a smooth start.
First and foremost, do your research! Knowing the industry that you are about to be involved in is key. You may think that your idea is the best thing since sliced bread; and it may well be. Market research, however, can be helpful in determining potential competitors as well as supply and demand. It would be crushing to sink your hard-earned money into a product or service only to realize that the market has been saturated or there really isn’t a need, making it difficult to attract business and make money.
It is also important to understand your target demographic. Is the consumer you are interested in need and/or want your product or service? Will you be able to offer a quality and affordable product or service to your target consumer and still make a profit? If consumers aren’t onboard with your idea, you may want to rethink your plan.
Certain legalities also come into play when starting your own business. The way your business is structured can dictate legal requirements, obligations and restrictions. Different types of business formations require specific licensees, registrations and filings. Depending on your business, you may need to apply for an Employer Identification Number (EIN), obtain a business license or get insurance. Some of these considerations vary by industry and state of operation.
There are also personal liability and tax ramifications that need to be explored before making a final decision. It is very important to know how the formation of your business affects your personal liability. If not, one bad situation could possibly wipe out what you have worked so hard for. Sole proprietors can fall into this category and need to make informed decisions.
Do you need a business plan? In a nutshell, yes! There are several reasons for a potential business owner to create a business plan. Quite simply put, a business plan is nothing more than a document outlining the basics of your business, i.e. products, services, finances, marketing, goals, timelines, feasibility and strategies. A carefully thought out business plan can help you stay on course. It serves as a “blueprint” to address every aspect of your business from inception to reality to, eventually, growth.
A business plan is especially important if you are considering bringing in partners, approaching investors and/or applying for a business loan. Banks, as well as potential business partners and investors, want to ensure that they are making a wise investment when loaning or investing money.
Is it necessary to hire an accountant? That depends. If you are a “hands-on” business owner and are involved in the day to day activity of your business, you may find that handling the finances can be a bit much. Often business owners find that they can save money by taking care of their own finances. That is true, but it is important to weigh the pros and cons. By doing your own accounting, however, you run the risk of not being able to give it your full attention.
By delegating this task to an accountant, you may actually save yourself money. An accountant’s sole purpose is to make sure that payroll and bills get paid but, just as important, that you get paid! A good accountant will also keep you apprised of your financial situation and can prepare “visuals” in the way of charts and reports to keep you informed of your company’s financial situation and cash flow.
Hiring an accountant immediately may not necessarily an absolute. You may be a whiz at the number game and find it manageable. If that is the case and it works for you, great! If not, it is best to leave it to someone in the accounting field. Remember, a good accountant can give you strategy tax advice that could save your business thousands of dollars.
These are just some of the considerations that should be on your radar when you are ready to start your own business. Again, it is always best to be prepared when venturing out on your own. Consulting with an attorney beforehand can set you on the track to “doing it right” the first time.
Trademarks and copyrights both serve to protect the legal rights of business entities and/or individuals. They are not, however, interchangeable. That being the case, it is extremely important to know the difference between the two.
A trademark is a legal way to protect the unauthorized use of a unique and recognizable design or expression of words, which serve to identify the source of a product or service of a particular entity. A trademark owner can be an individual, a business or any legal entity. Trademarks are often displayed on packaging, letterhead, places of business or directly on a product. Trademarks serve to distinguish an entity’s product or service from another entity’s for the purpose of capturing the attention of consumers. Trademarks can be an invaluable advertising tool.
Copyright grants exclusive ownership and authority to distribute an original “creative work.” Typically, copyrights are not necessarily “absolute” and are subject to limitations and exceptions, including fair use. Copyrights are limited to the protection of an original “expression” and not the underlying concepts that go along with it.
Copyrights are considered to be “territorial rights.” What this means is that they do not extend beyond their jurisdictional territory; specifically, from country to country. Each country is governed by their own copyright laws although there are some instances wherein international copyright agreements may come into play.
One major difference between trademark and copyright, aside from what they each protect, is the length of time that they are in force. Trademarks are legally enforceable for an undetermined period of time as long as they are continually in use and active, though a formal registration needs to be renewed at regular intervals. On the other hand, copyrights are enforceable for the natural life of the creator plus and additional period of time, generally 70 years after the original creator’s death.
Additionally, some trademarks are eligible for protection by copyright if they meet certain criteria. Confused yet? To find out how to best protect you work product, it is always best to consult with a legal professional to determine what is best for you. Contact our office for a phone interview to see if we can help with your copyright or trademark.
Restrictive covenants are agreements often made between employers and employees/contractors, as a condition of employment. They are not uncommon and are designed to safeguard the business owner from scenarios which have the ability to compromise their interests. Two such agreements are the non-disclosure agreement and the non-solicitation agreement.
A non-disclosure agreement is, essentially, an agreement that ensures confidentiality, insofar as the business is concerned. Employers want to ensure that their employees/contractors don’t disclose sensitive information regarding trade secrets or other data that would give a competitor an unfair advantage.
A non-solicitation agreement is an agreement wherein an employee/contractor is prohibited from soliciting or approaching customers/clients as well as other employees of a present or past employer for competitive business purposes.
In theory, and on paper, these restrictive agreements are beneficial to employers. The million-dollar question is, however, are they enforceable? The answer is… YES! The two-million-dollar question is, is it worth it? The answer to that is… MAYBE!
These agreements are definitely enforceable, as a matter of law. The problem, however, it that once an agreement has been breached, the damage has been done. Should a business owner cut his/her losses and move on without enforcing the agreement? Or should he/she spend time and resources litigating the breach of contract? That is a determination that has to be made by individual business owners.
In this day and age, employees don’t work for one employer for 30 years and then retire, as in years past. The reality is that employees, now, frequently move from employer to employer; and take their experience and skills with them. There is never a guarantee that an employee won’t breach a contract. That, in and of itself, should not deter small business owners in their endeavor to safeguard what they have worked so hard for.
We offer packages for business owners looking to hire and protect their assets. Book a call here to discuss your needs: calendly.com/----32
Although some business owners are skeptical of Search Engine Optimization, (SEO) services, they can be a tremendous asset to a small business. That being said, the reason that for the skepticism is that they are commonly not well understood.
In reality, SEOs can boost a business’ web visibility and generate business by using strategies involving a mathematical process. When consumers do an internet search, they are typically looking for options. More often than not, a consumer won’t look too far past the first page of results to any given search terms. That being the case, it behooves a business owner to make sure they are adding content to their website that has relevance to as many possible search terms, or keywords, as possible; thereby resulting in appearing at the top of the search results.
SEOs are helpful in determining what keywords and topics will get the most consumers to any given website. The higher the probability of drawing a consumer to your website, the more likely he/she is to read through your content and have their interest peaked. If a consumer can identify with your mission and/or product or service, the more likely you are to add that consumer to your list of customers.
So, now that you have drawn consumers to your website, you not only want to gain their
business; but it is also important, but not necessarily required, to protect yourself by having a Terms of Service and Privacy Agreement, hereinafter referred to as, “agreement.” Websites that do require these agreements include businesses that collect personal and biographical information from their users.
The agreement contains regulations designed to protect the business owner. Below are five important reasons to include such an agreement on your website:
1. An agreement can prevent any misunderstanding about your policies. It is also designed to prevent any potential abuses including internet spam and having people post defamatory content on your website.
2. An agreement can allow you to stake your claim to the content of your website. You
would want to include language stating that you are the owner of the website’s content
and that it may be protected by copyright laws. This is referred to as an Intellectual
3. An agreement can help you better manage your website. For example, you can provide for the right to terminate and/or ban user from your website if they fail to comply with the agreement.
4. An agreement can protect and/or limit you from liability where any erroneous errors
occur within the content of your website.
5. An agreement can determine a governing jurisdiction. For example, if you would need to seek damages from a consumer that is out of your state, you can provide for the ability to have the matter handled in your state of business, so you are not dealing with foreign jurisdictions.
As with all things relevant to operating a small business, it is always wise to seek the advice of an Attorney to best protect yourself and your business.
Sarah E. Holmes is a Philadelphia business attorney and strategist that helps start ups and established businesses looking to expand, protect their assets and increase their profits in an approachable, down-to-earth way.