WRITTEN BY ALLISON WAY, SENIOR COPYWRITER & CHIEF EDITOR
Warren Buffet may have said it best: “Risk comes from not knowing what you’re doing.”
Unfortunately,
many times entrepreneurs do not know what they’re doing. They’re constantly reevaluating their
business plans, holding meetings blindly and talking with other seasoned
entrepreneurs who may just confuse them.
The worst part of entrepreneurship is that you don’t know what you don’t
know...especially when it comes to legal issues.
Entrepreneurs
and small business owners have been turning to lawyers and legal consultants
since startups began popping up all over the globe. And startup legal issues couldn’t help but
come running after them. Yet entrepreneurs still cannot seem to wrap their
heads around the most important legal issues facing their businesses. But could it be because legal explanations
are just too complicated to understand?
Legal
jargon certainly doesn’t help. Limited
liability. Sole proprietorship. Zoning.
Promissory notes. Intellectual
property. Sure, these words sound
pretty, but a lot of entrepreneurs may not know what they mean. When lawyers or legal consultants do not
fully explain the legal jargon that is used in small business legal matters,
things can get a bit messy. Luckily, we
have books like How to Start a Business and Not Get Sued that give step-by-step guidelines
to entrepreneurs starting a new business.
How
to Start a Business and Not Get Sued was
recently published in order to help startups understand what’s important when
it comes to legal matters and entrepreneurship.
The book is written by Tom C. Brown of Brown Law Firm, a Kansas City-based business attorney who has been
practicing for nearly four decades.
During this time, Tom has counseled hundreds of entrepreneurs to
organized and grow their businesses. But
there’s more to Tom than meets the eye—he is an entrepreneur himself, starting
up various restaurants, entertainment businesses and promotional products. So what are his best pieces of advice? First and foremost, Tom recommends knowing was legal matters you’re getting
into.
Don’t
let legal jargon get in the way of protecting your company or moving
forward. One company that started out
with a $1,000 investment let legal jargon get in their way of growth and
development. And when the company
finally had the legal concept fully explained to them, the company boomed into
a $500,000,000 Fortune 500 company.
Tom writes:
Two
ladies approached me wanting to set up a hobby business so they could travel
abroad and write off their business expenses as they shopped for jewelry to
sell upon their return.
When
I asked what form of business organization would be best for them, I suggested
an S corporate entity. “What does that do?” they asked. To answer their question, I formed a big
circle on my conference room table with drink coasters. Pointing to the center of the circle I said,
“This is your company. Everything inside
is your company’s assets. Everything
outside represents your personal ones.
If the company is sued, which assets are at risk – those inside or those
outside of the coasters?” Pointing to
the inside of the coasters, they both laughed and said “Now we get it. We always thought it was the other way
around!”
Sometimes,
an entrepreneur just needs legal matters to be simplified. Once their legal issues are explained
properly, they can continue building a business without the fear of being
sued. So, entrepreneurs, I’m encouraging
you to do this: ask the “dumb” questions.
You may be grateful that you did!
Follow me! @AllisonThinkBig
That is why business mentors are of reach. Everyone needs a mentor. Any person looking to better themselves professionally and personally needs someone to give them the perspective of how others view them, to challenge them and to support them.
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