In Phil Knights book, Shoedog, he references, “Business is like war.”
Oh boy is this true! I did not account for the amount of legal help CEO’s need within the first couple of years, heck the first couple of months in my initial business plan.
When starting a new business, it’s easy to get caught up in the excitement of disrupting the marketplace. You’re swept away in ideating, innovating, and visualizing joining the list of successful entrepreneurs.
You naively think, how hard could it be? I see plenty of regular people start new companies, it’s possible! You can incorporate a business, get a registered agent, and even get legal help online these days. It’s so accessible and easy. If someone else can do it, then I can do it too!
The reality of the situation is, it is easy to launch a startup, but it is hard to launch a startup right.
Many steps need to be taken to avoid lawsuits and jail time as a chief executive – YES JAIL TIME! Look at Mike “the situation” Sorrentino with his 8-month sentence for tax evasion. Or Martha Stewart for insider trading. There are a lot of laws out there that you need to be aware of.
Permits, licenses, contracts, taxes, leases, code compliance, copyrights, intellectual property – all require a deft eye on the fine print. The government makes it too easy to make mistakes and get entangled in red tape.
One of my goals in launching my business was simply to not get sued. Easier said than done. Any major public attention can open the door to valid or invalid lawsuits. Didn’t know a pizza bed is capable of being copyrighted?! Well, once you are featured on Buzzfeed, you’ll find out quickly! There are many people out there that will claim the rights to items you originally designed, but with the intent of getting quick cash. I wish I had known that most cease and desists are a joke. That could have saved me 2 weeks of stress, anxiety, time and money spent on a lawyer.
Having expert legal startup advice is essential. Leasing a commercial space? Get a lawyer to protect you. Getting public attention? Have a lawyer by your side. Signing a partnership with another company? Have a lawyer read your contract.
Especially as a first-time business, you are more likely to be bullied into unfavorable terms, false allegations, or lack of payment. This is why contracts exist and it’s important to have a lawyer protecting you.
The same thing goes with an accountant. Knowing what taxes are due when can be tricky. They can also help advise on permits needed to be within compliance of the law.
Spending money to get the appropriate advice will help avoid catastrophic mistakes further down the line. I cannot recommend lawyers and accountants in the early stages of a startup enough.
It truly is a battlefield out there.