DON’T BE BULLIED BY YOUR LAWYER

8 THOUGHTS IN DEALING WITH A LAWYER

There are many occasions in the life of a Small Business where a lawyer is needed—a rental lease, a royalty contract, an employment contract, a business partnership, an investor, a lawsuit, etc. Small Businesses rarely have a full-time lawyer and staff, so the CEO hires one for the specific task needed. Here are some things to think about when hiring a lawyer.

  1. The lawyer works for you because you pay them. Some attorneys can be very intimidating and want to make your business decisions for you. Don’t let them. You set out what you want them to do for you and if they cross the line, call them on it.
  2. If any negotiating is required, decide early who will do the negotiating. I always preferred to do my own negotiating and then have the lawyer make sure the legalese represents the agreement accurately with no loopholes. If you feel that your lawyer is a better negotiator than you, then by all means, let him/her do it, but with you setting the parameters.
  3. Always set a timeline for the lawyer. Often they take too long, particularly if they are on an hourly fee compensation.
  4. Never let a lawyer ask for more in negotiations with 3rd parties, without your permission. This will only delay the agreement and the other party will then take off the table, some of their concessions given to you.
  5. Keep in mind the mindset of many lawyers (not all) some tend to think there is only winning or losing. You should only focus on the key things you want from this agreement. You also need to understand your leverage position. Even if you can dictate the points in an agreement, let the other party have their way on some of their key desires that are not particularly important to you. You want the other party to feel they’ve been treated fairly. You may be dealing with them in the future.
  6. Stay involved with your lawyer on the whole process. Don’t be afraid to ask questions.
  7. Do not hesitate to negotiate fees with your attorney. They are negotiable. Also try to establish a maximum fee, which can be difficult. Try to set out stages of your lawyers work and cost of each. They should lay out their strategy and tell you the odds of your success. Going to trial can be very expensive, and you may feel it is cost prohibitive for you to proceed to that stage.
  8. Check out the credentials and specialty of your lawyer before engaging them and be sure to know and meet the lawyer who will be handling your case. Many times you meet a partner who will then assign a fresh hire, just out of law school, which may or may not be okay.

Remember, don’t be intimidated.

FACTORS: How They Can Help Your Cash Flow and More

Factors finance $120 billion in receivables, yet most small and start-up businesses are not aware of them. Business schools rarely acknowledge them. However, they can alleviate your cash flow problems. They can loan you or advance you money against your receivables and in some cases against your inventory. In other words, your receivables are an asset that the lender (Factor) purchases.

The Advantages of Using Factors:

  • You get payment for your invoices within days. This allows you to pay your suppliers on time, to build trust  with them, and to take advantage of their cash discounts. It is a financial tool that speeds your business’ cash flow. Factors do not lend money on purchase orders.
  • All your costs are variable.
  • Factors check the credit of all your customers and would-be ones. Thus, you get more accurate and current information than if you performed this function on your own. More money is saved by eliminating the need to hire a credit checker.
  • Factors collect all your receivables. In today’s world, the majority of customers like to stall the payment of their bills. Some will not pay until someone calls them for payment. The Factors have more leverage than you as an individual have. They may represent 50 suppliers of one customer.
  • Factors act as insurers of the receivable. If after you ship a customer and the customer goes bankrupt, the Factor may be stuck, depending on your contract, not  you. This feature can help you sleep better as well as eliminate your bad debts.
  • The Factor can take over some of your administrative functions and save you the resultant labor costs. On one of our game companies that was created around a licensed product, the Factor supplied us with data on monthly shipments which acted as our Royalty statement. They also provided us with total shipments by territory or account which we used as our Sales Rep commission statements.
  • You can get money even though you don’t have a good credit rating. The Factor is only interested in your customers’ credit ratings.

The disadvantages of using Factors are the costs, which can be high in some cases, and they may alienate some of your customers with their collection techniques. You need to read and understand their contract carefully.

You can locate an appropriate factor by going to the website of the International Factoring Association or ask your local banker, SCORE, or SBDC office.

(This post is excerpted from Chapter 11 of Bootstrapping 101.)

BLOCKBUSTER IDEAS NOT REQUIRED

The starting point for any new venture or product is the idea. What product or service will our business offer that will be a winner?

A great many people can’t get past this idea phase. It seems to me that many of them stall out because they are waiting to hit upon some kind of revolutionary new idea–a concept of such power that it will appeal to everyone. They want bells to go off in their heads. They want brilliance. They want a blockbuster idea.

The fact is, there’s not a lot that’s new under the sun. Most businesses, even highly successful businesses, are founded on a very ordinary, very mundane idea, pretty far removed from brilliance. It’s luck, timing, and execution that transforms a ho-hum idea into a good business.

All of us would like to come up with a show-stopper of an idea that will cause customers to flock to us when they recognize the brilliance of our creation. This scenario is rare. You can take comfort in the fact that most new businesses and products are based on an existing, well known, and possibly boring entity. Their success is founded on new and better executions. Higher quality, value added features, new areas of distribution, outworking competition, better timing, superior service, license added, etc.

Think of Scrabble where you add one letter to an existing word, and you get full credit for the other person’s word. You don’t have to reinvent the wheel.

THE GOLF BALLS AND THE MAYONNAISE JAR – SMALL BUSINESS LIFE PERSPECTIVE

I have received this email story a number of  times over the years with no idea who created it. I think it’s a good one to share to remind Entrepreneurs of perspective in their lives.

When things in your life seem almost too much

When 24 hours in a day is not enough

Remember the mayonnaise jar.

A professor stood before his philosophy class with some items in front of him. When the class began, wordlessly, he picked up a very large, empty mayonnaise jar and proceeded to fill it with golf balls. He asked the students if the jar was full. They agreed it was.

The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

Then the professor next picked up a box of sand and poured it into the jar. Of course the sand filled up everything else. He asked once more if the jar was full. The students responded with a unanimous yes.

The professor then produced two cups of coffee from under the table and poured the entire contents into the jar, effectively filling the empty space between the sand. The students laughed.

“Now,” said the professor, as the laughter subsided. “I want you to recognize that this jar represents your life. The golf balls are the important things—family, children, health, friends, and favorite passions. Things that if everything else was lost and only they remained, your life would still be full.”

“The pebbles are the other things that matter like your job, house, and car. The sand is everything else—the small stuff.”

If you put the sand into the jar first, he continued, there is no room for the pebbles or the golf balls. The same goes for life.

“If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you.”

“So. . .pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out to dinner.”

“There will always be time to clean the house and fix the disposal. Take care of the golf balls first—the things that really matter. Set your priorities. The rest is just sand.”

One of the students raised her hand and inquired what the coffee represented. The professor smiled. “I’m glad you asked. It just goes to show you that no matter how full your life may seem, there’s always room for a couple of cups of coffee with a friend.”

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