The 1 unexpected way to make it rain for your business
Would you believe me if I told you that taking care of all your legal needs and building a solid foundation for your business can help you making bank? I’m not saying this because it’s my job; I’m saying it because ensuring your business is in good standing can definitely make you earn more money.
Here are 3 reasons why.
A couple of weeks ago I gave a few tips on how to be better prepared to get funding from VC. One thing I didn’t address was how getting your legal things in order can definitely help boost your chances.
Before closing a deal with an angel investor, VC or even the bank, you need to demonstrate you are legally compliant and protected. It’s not just about choosing the right legal entity; it’s also about the paper work that makes you feel dizzy. You incorporated but did you get your corporate records drafted? You’re out there doing business but did you register your intellectual property?
True story, business owners were pitching to an angel investor for a product that was already being sold to consumers and had really good potential. They were asked a deadly question: your product is very unique and you guys are actually the creators behind this, did you get a patent? Business owners: No. Long story short, angel investor did not feel he could trust them as they had already been making serious mistakes right from the beginning.
Hiring a patent agent would have changed the whole story. If they had taken that one step, it would have helped with their business growth.
A legally compliant business is better suited to take advantage of the opportunities such as a new partner, a new employee, a new client, or a new investor. When entering into these business relationships, you need to make sure you have the proper contract. Knowing you have all your facts right and the legal clauses to back you up, you can negotiate with the other party without fearing to enter into something you didn’t agree on; or worst, hiring a contractor but turns out he’s considered as an employee. You might want to DIY but you don’t have to, invest in a few good templates drafted by a lawyer specifically for your business and then you’re good to go for the long run. Yes, we do that.
Costly mistakes can get more expensive than having it done by a professional in the first place. True story, another case of DIY gone wrong; I recently had a client reach out to me because she had gotten into a business relationship with no paperwork whatsoever. When I mean business relationship, they were 2 shareholders and they created this company together. Let’s call them Paul and Laura for the sake of this post. Shit hit the fan, Laura wants out, Paul doesn’t. But Paul holds all the intellectual property, the content created and even access to the website. They obviously had no shareholders’ agreement. What did Laura end up doing? Paul refused any money from Laura and with no money to start legal proceedings and knowing a cease and desist would not make him budge she had to start again from scratch. That means new company, new name, new content…they say time is money right?
We hope you got it by now, lawyers aren’t just there to take away your precious savings; they can help you make it rain in more ways than you think.
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