Many entrepreneurs have a “learn as we go” mindset approach to operating a business. They know their skills or product but have limited experience starting or actually running a business.
For the most part, entrepreneurs are smart individuals, but they get so focused on doing their business they often don’t take care of business within their operation. This failure can lead to costly mistakes: thousands of dollars in legal expenses and the headache and heartache of fixing a problem might have been avoidable.
Real Life Issues
There are many times where business owners come to me for help and I think “this could have been avoided if you would have come to me sooner”. A few real-life examples:
Owners who don’t create a business entity: put their personal assets at risk if the business gets sued;
LLC with multiple owners and no operating agreement: painful business “break up” when things didn’t work out between owners;
Failure of business owners to create and fund a buy-sell agreement: chaos and loss of income when one owner dies or becomes disabled;
Flawed or lack of customer contracts: doesn’t fully protect the company’s interests or address all likely contingencies; and
Working without contracts: so many problems…
If you are going to employ the “learn as we go” approach
If you are starting a business, my unsolicited advice is investigate and do your homework. Invest the time to learn what goes into running your business and figure out what you don’t know. Reach out to established entrepreneurs to ask for their advice and use resources in your community.
Even if you don’t think you can afford it, investigate hiring a business attorney and an intellectual property lawyer for an hour. Bring them your ideas and ask for their recommendations on how to make it happen.
A good lawyer will respect your budget and tell you what you can do yourself and what you should hire a lawyer do for you. They can also make recommendations of additional resources to help you based on their experiences helping others.
In the legal industry, it is that it’s easier and cheaper to prevent problems than to fix them.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and should not be construed as legal advice from Leos & Gilkerson, PLLC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a licensed lawyer.