Pivoting means changing direction or reinventing an essential part of a business to improve revenue or stand out in a competitive market. Pivot could include changing platforms, focusing on a new audience, employing new revenue models, or using new technology.
When should a business pivot? When they hit a plateau in development, when they are swamped with competition, if they are receiving lukewarm customer responses to products or services offered, or if they are preparing to sell (increase the value of their business).
PIVOT stands for: Presence, Innovation, Ventures, Others, and Terms.
Welcome, happy what is today Tuesday, you know welcome, thank you for joining us on your lunch break. This is a great session in our legal consideration series that will be presented by Janelle Peyton who was partnering with us here at Temple SBC to put this together.
If you are not familiar with the Temple SBDC, this is your first time receiving services from us, we are a nonprofit funded by the federal, state and local government.
We are hosted here at Temple University and we’re actually one of over 1000 SBDC’s in a nationally accredited network, there are 16 SBDC’s in Pennsylvania, and since we’re located here in Philadelphia, we focus on the Philadelphia region as well as eastern Montgomery and lower Bucks County.
We offer a variety of services, namely, we are known for our one-on-one consulting. So if after today’s session you would like some additional steps with your business, you can sign up for one on one counseling with any of our advisors at absolutely no cost to you.
We also have a variety of webinars as most of you have probably seen on our website. It really runs the gamut from webinars such as today which are about legal considerations. We have a ton on social media marketing, digital marketing. Food, Business series, restaurants manufacturing series. So it really runs the gamut, and I highly encourage you to check out what else is available to you and keep a lookout for the rest of our legal consideration series.
We’ll be doing one of these every month, so with that said, I’m going to go ahead and have Janelle introduce herself and take us away.
Hello everyone, I am going to pull up my slides here.
If I can have permission that would be good.
There we go.
Sorry about that, sorry.
That’s all right.
Can you see my slides?
Yep alright perfect so you know you have to do the bio slide, right?
But really, there’s three things to keep in mind, or three things that you should know about me.
One is I’ve been doing this for about 20 years now, won some awards. Blogs, got featured on different news news, places that you would recognize ABC, Fox, things like that.
So basically I’ve done this before. I’ve been around the block and I know what I’m talking about that’s that piece if it. You should also know that I was a business owner before I was an attorney, so when I speak to small business owners and when I help my small business clients, I’m really helping them from a position of understanding where they’re at.
My first company was in millwork installation and it was in Philly and Southern Jersey area mostly, and Mark carpenters did amazing work and it was a lot of fun to work with them so I come, everything I do and everything I help my clients with really comes from a position of how can I help them in their small business and sometimes I have to take my legal head off and help them from more of a small business point of view and help them decide maybe what the best option is for them given whatever they’re dealing with at the moment.
The third thing that you should know about me is my why. So why am I doing this? Why do I have a law firm? Why do I help small businesses? And the reason is that I feel very strongly that our nation and our nation’s economy is founded on business and small business and without a strong small business and medium sized business community I don’t think our country would be what it is today.
So if there’s anything that I can do to help small business and to help that community, that’s really where I want to spend my time.
So I’ve created my company around helping small and medium sized companies figure out the legal piece of what they’re doing and trying to make it a little bit less tedious and a little bit more fun and a little bit more straightforward than maybe your larger law firms would treat people.
So that’s what you need to take away from this.
But this program is called pivoting in a pandemic, rights so I tend to want to look at the positives and not the negatives. So we’re crossing out, pivoting in a pandemic, and we’re are going to think about our goal, which is business success. So pivot to business success.
That’s what we’re going to focus on today. And obviously we should probably start with the definition of pivot now I recognize that we didn’t talk about pivoting, we didn’t hear much about it until this pandemic started and then everything was about pivot, pivot, pivot.
So you’re almost hearing it more than more than anybody really needs to, but what is it really? It is just that we are changing in direction in your business or reinventing a part of the business.
And the purpose is generally speaking to improve your revenue or to stand out in some way, which you know would hopefully end up in improving your revenue.
But we don’t really talk about the why and how it really happens on a much more regular basis than anyone talks about.
We are small businesses.
We are medium sized businesses, and we can change direction.
We can change our minds whenever we want.
We don’t have a lot of red tape or bureaucracy inside of our businesses and that’s why we operate in the space that we operate in for the most part,
So what we’re doing with that is we can make tweaks and changes along the way all the time.
So whether or not we want to use pivot as a term, you know it’s the term of the times, but whether or not we really want to focus on that, it’s we make changes.
We make adjustments, we change as our clients change as the economy changes, and we’re really good at it, and that’s one of the things I love about small and medium sized businesses, we are really good at this if we can figure it out, we can change on a dime. And that’s how businesses explode. That’s how growth happens.
So I know pivot, you know it’s been said and it’s kind of annoying to hear at this point in time.
But really, that’s all it is.
The changes that you make on a daily basis.
So what types of pivots are there?
You know there’s changing platforms.
There’s focusing on a new audience or a new customer.
Employing new revenue models using new technology.
There’s all different ways we can pivot.
Sometimes it’s a smaller decision, sometimes it’s something larger, but really we it’s just a change.
It’s just a decision to make a change.
So when do people pivot?
When do businesses pivot?
Oftentimes they’ve hit some sort of plateau in their development.
The competition caught up and now they’re swamped.
They aren’t different anymore.
They are not receiving their responses that they want to their products or services, or you know some things have changed and now they aren’t receiving their responses that they want.
Or they’re preparing to sell.
In the negative, maybe.
Maybe they’re not doing so well, and that’s what brought about a lot of change in the pandemic was we couldn’t operate in business the way that we used to, so we had to change to stay alive.
But there’s also a lot of businesses right now preparing to sell and so part of that is how can they make their business as valuable as possible before they sell. So they’re even pivoting as they’re you know, preparing to leave the business or sell it.
So moral of the story here is that pivoting is a natural form of evolution in pretty much every type of business.
There’s going to be some changes.
There’s going to be at least small pivots, if not large ones, so as much as we are going to use the word pivot, really, we’re just talking about any kind of change or decision that you may make in your business to hopefully find a better a better outcome.
So what I did was I broke pivot into an acronym, because that’s fun, right?
So we have we have five different areas of law that go with each of the letters of pivot, and we’re going to go through these one by one and Sarah said at the beginning of this meeting that we have a worksheet that went out to everyone.
So what we’re going to do is that us a worksheet that’s also going to follow what we’re talking about today.
So hopefully I would love for you to leave this talk with some really quality good information and a good understanding of what you can then take back to your business and back to your business attorney and have an intelligent conversation about some changes that you might need to make or some things that you just might need to wrap your head around so that you can make the best decisions moving forward.
So what we’re going to do is we’re going to go through each of these five. At the end of each I’m going to take a little break and see if there’s any questions, so feel free to throw your questions into the chat box or into the Q&A. I know Sarah is keeping an eye on those for us.
So let’s get started. P. P stands for Presence, not the kind under the Christmas tree.
Sorry I had to say it. I’m thinking brand presence here.
So I say intellectual property is often a business’s is most valuable asset.
Let’s think about that for a second. Intellectual property.
Intangible stuff you can’t touch is often a business most valuable asset.
Many businesses don’t even recognize that they have intangible property or intangible assets in their business, and the question I would pose to them and pose to any of you listening out there is, do you have a client list?
If you have a client list you have something worth protecting and that is intellectual property right there.
So pretty much every business in some form or another has some sort of intellectual property that they should protect whether or not they protect it with fancy patents that cost hundreds of thousands of dollars, or keep it a secret is another question, but it’s there they have it.
So the P, the brand presence piece of this.
There’s actually two pieces, the P and the I, we’re both going to talk about intellectual property with those, but I kind of break it into two sections.
There is the brand presence. So this is what you are portraying to your clients to your potential partners to your, to your employees and your potential employees.
This is what does your company look like?
What do people think of when they hear your name when they see your logo?
So this is sort of the outward presence of your company and of your brand.
The inward looking is what we’re going to talk about in under the I and that is more the internal pieces of intellectual property that you might have.
So first of all, what are we talking about? We’re talking about your brand name.
What is your name? How do people identify your widget versus somebody else’s? Or your sneaker versus somebody elses’s?
It’s your name.
And then it’s your logo and your taglines, and maybe your packaging.
Maybe you have colors that are associated with you, you know, think of the Tiffany blue.
That’s trademarked, no one else is allowed to package jewelry in that pale teal color because that is Tiffany’s color of blue.
So what is it about your company that makes it different from everybody elses that makes it stand out?
That makes your clients and your customers go, Oh, that’s who I think they are.
That’s that brand that I know or that’s that brand that I use, and I know who they are.
So why does this matter when you pivot when you change, sometimes you are changing your brand presence.
Sometimes you’re changing your products and your services.
Sometimes you’re adding a new product or service that might have a name.
It might have a logo, you know it might have a tagline.
It might be something new there.
So I want to get you thinking about what might be new, what changes have you made even in the in the last year, and pretty much every year you should think about this.
Just give yourself some time to go okay what changes happened in the last year and are things the same?
Did I change my logo?
Did I tweak that shade of green that I used to use?
Did I change my name from, you know 3 words and now I’m just going by the first word of the company name.
You know, so.
So think about those things. Keep those you know once a year.
So just think them through.
Unless you’re planning a big strategic move, but think those through and go okay, is there any changes here that I might need to might need to take a look at.
And identifying new intellectual property assets the business has developed or may develop during a pivot is critical to protecting the company’s unique presence and brand in a competitive market.
So if you did make a change we want to make sure that that change is protected.
If you changed your name, if you tweaked your logo, it might need to be refiled or re-registered as a new trademark.
And right now with everybody going much more national in scope and even global in scope with their brand names, it’s very important that you know that you have the rights to your name, because if you used to be a regional company, you used to work in Eastern PA, let’s say, and now the Internet are now the pandemic and everybody used to being on Zoom now you can sell your services, for example to people in California.
Well, is there somebody doing business under a similar name as yours in California for the same goods and services?
I don’t know.
But before you start marketing out there, you should know because I would hate to see something happen where you’re infringing on somebody elses name and somebody elses trademarks, and then you get a cease and desist letter. So that’s why I want you thinking about these things.
Securing your ownership rights and registering your trademarks, service marks, copyrights.
Don’t worry about those words.
That’s my job, but keep in mind that securing your ownership rights is what you need to defend.
Your you know who you are, what makes you different from competitors?
So I tell people that we need to find the intellectual property in your business.
And don’t worry about what it’s called.
I will help with that.
First we have to pull it out.
We have to see it, identify it
Then we can use a tool to protect it and a trademark, a copyright those are just tools, so don’t worry about calling it by the right name. Those are all just tools that we have to use and one might work better for you.
One might work better for another person.
They have different protections around them and also different costs to achieve them.
So what you need specifically?
That’s a conversation that your attorney and you’ll need to have together to figure out what is the best fit.
But don’t worry about that now just worry about what.
Is it that you may have changed over the past year.
So I’m going to ask you now to take a look at your worksheet and you’ll see that at the very top of that we have P equals presence, which is what we just talked about.
And the question is, has anything changed regarding your brand, such as your brand name, logos, taglines, company colors, packaging, etc.
Make a note of it here. And this is a checklist for you.
This is for you, you can use it again and again every year if you want or anytime you make a big change in your company, but this is a great way to just like make some little notes to yourself.
Then you’ve got it written down. You’ve got it in a place, and then as you bring it up with your accountant, your attorney, whoever, whoever is important to know this information, just check the little box. Trying to make it easier.
So before we move on to I, I want to check in with Sarah and see if we have any questions.
Hi Janelle. Great.
I’m loving this so far.
Tons of great information.
Definitely as a small business. I think a lot of people don’t realize intellectual property can affect them too.
So I’m loving this first P.
We don’t have any questions yet, but I do want to just let everyone know that I did put a copy of the worksheet in the chat so if you didn’t find it in your email you can also download it using the chat here in zoom.
And if you have any other questions, you are more than welcome to reach out to me and I can make sure you get ahold of that, but I do encourage you to fill it out as we walk through this presentation with Janelle and like I said and Janelle said, please, please, please if you have questions, that’s what we’re here for.
OK, so feel free to put them in the Q&A and we’ll get to them as we finish each of the letters, thanks.
So let’s go on to I
The I is for innovation and as I mentioned before this is also a piece of your intellectual property.
This is kind of if you if you think about the brand presence as what you’re showing to your clients to the world this is kind of what’s behind the scenes.
What’s inside your company?
Your employees will see this, but your customers might not have any idea about it.
And we’ll talk about that, but maybe they should.
So these are innovative ideas that allow many businesses to surge ahead of the competition and succeed.
So what do these look like? They’re all internal, so a client list like I mentioned before, that would be something that you would want to protect.
You know, if one of your employees walked off with this client list, you’d want to make sure that they couldn’t share it with anyone that they couldn’t use it.
You don’t want them to walk off with it and you know to begin with, so there’s ways to protect it.
It might be certain products or services. Think about inventions. You know if you are in the products industry, you may have invented a new way to package something. A new kind of seal, a new kind of tape.
Maybe it’s a new stack.
Maybe it’s a new type of sauce that you’re selling in a grocery store. Whatever it is that is something that you’ve developed so again, don’t worry initially about whether it should be patented or trademarked or copyrighted.
What we want to know is did you create something that nobody else knows, and if so what should we do to make sure, it stays yours.
So if it’s a recipe, for example, let’s keep it a trade secret perhaps.
Maybe the spice blend is only known by you, but the rest of the mix is known by all the employees and they know how to make it so we keep a piece of it separate, a piece of its secret. Or maybe Kentucky fried chicken for example, is rumored to make the spice blend in one factory and make the coding for the chicken blend in a different factory and the employees are not allowed to get a job in the other factory ever.
So if you work in one you can never work in the other.
So that’s the way that they keep their ingredients, their ingredient lists, and their recipe completely secret.
The pieces may be known, but the whole thing is secret.
You hear the same thing about Coca Cola keeping the recipe you know in a safe only one person in the whole company knows.
And trade secrets, guess what they cost? They cost nothing.
They cost some planning time and maybe a safe if you’re going to lock it up, but they don’t cost anything, so it doesn’t just because we’re talking about intellectual property you don’t have to be seeing dollar signs here.
Some of the other things could be business methods and procedures.
I was on the phone with a client the other day and she said, oh like, just in passing oh I have a new way that I’m calculating how I’m charging people and it seems to really be working, I had a lot new clients come on. They love this.
So we talked about it a little bit.
Okay, well it’s an Excel spreadsheet.
With an algorithm that she came up with of how to price for the services that she offered.
And that’s something that she created and something nobody else in her industry is doing.
So guess what we need to password protect that Excel spreadsheet.
Only the people actually submitting the the quotes to the potential clients is going to be able to see that.
But that’s something inside of her business that you might not recognize.
You might not think about because you’re in it day-to-day as the business owner.
But that’s something that your business has figured out.
That’s omething that is different than anybody else.
So and the other thing here is technology.
And there’s others of course as well, but you think about technology you think about software.
That’s always new and always changing.
And there are some different ways to protect software and apps and things like that.
So keep all of those things in mind.
Whether it’s internal you know, maybe it’s a way for you to track your employees, your employee, vacation time.
Maybe it’s just something you use internally, that you’ve created.
Or maybe it’s something that you know you use to serve your clients in some way or another, but these are all the things that kind of make your business work the way it works.
So if there’s anything that you can say hey, that that thing is something that I do that nobody else does.
Well, let’s make sure it’s protected first of all, and then the other side of that and I do work with a lot of marketing companies the other side of that is let people know that you have something that no one else has.
Don’t tell them what it is but you’re allowed to have a proprietary business method.
You’re allowed to have a proprietary procedure for doing something, or a proprietary worksheet whatever it might be.
But as soon as you start talking about how you have these things that no one else has guess what?
The client trust in you or your customer trust in you goes through the roof.
So if we can find these things and we can pull them out, then you can make money off of them.
And that is honestly one of the things I do with my clients.
We sit down sometimes and it’s painless for them for you, as the business owner, it’s just a conversation but usually I can ask questions to pull out some things and understand what might be different about your business and then suggest like hey have you ever thought about this or tell me a little bit more about that and we end up discovering that there’s intellectual property there that the business owner didn’t even realize that they had.
And then we can capitalize on that.
And another thing we can do with it is we can license it and we can franchise it.
So that’s a whole other realm that we can that can pull some of these things out and use them to your benefit.
So I did talk a little bit about you want to ask, is it protectable and you want to think about other strategic considerations?
So before I talked a little bit about how these are we want to find the intellectual property pieces and then don’t worry about the tools. And I call — I say I have a toolbox of different things and it does range from trade secrets to trademarks and copyrights to patents to franchising and licensing, and things like that.
So those are all tools and those are all different ways that we can protect certain pieces of intellectual property.
But what we do is once we find these pieces of intellectual property we look at what is most valuable to your company and how can we protect it?
And then we prioritize them.
So we say, OK, well, this thing you know is very valuable, and it’s not going to cost that much to protect, so let’s go ahead and work that out.
Maybe it’s The Client List thing and we just need to make sure that the independent contractor agreements and the employee agreements that you have in place are strongly worded enough that they cannot walk away with your client list.
You know, not a big deal.
Maybe just a review of a couple contracts, maybe a few extra clauses thrown in and we’re good.
All the way up to oh, I invented this like new way to apply something to something else, and it’s an invention, but it’s also a business method for my manufacturing facility.
OK, that might be a patent that might take a little bit longer.
That might take a little bit more time, but let’s talk about it and figure out where that falls in the priorities.
The moral of the story here is that seeking professional help to determine the best protection fits both the companies needs and secures the idea will ensure that the legal components are completed correctly and really we just want to make sure that if you do go down this path of protecting what you’ve got, you know, because you made a pivot. You invented something new, tweaked something. You changed something. We just want to make sure that if you go ahead and work on protecting it, that that protection will hold for you and that you go into this process with eyes wide open so that you can understand what it is you’re getting out of this.
What is important to know and you know, maybe there are pieces of intellectual property that aren’t worth protecting because it’s just too expensive or it’s just not valuable enough to you.
That’s OK too, but let’s make sure we know that that that’s our decision on those things and we can focus on building up the others.
So that’s kind of the second side of the intellectual property piece of this.
If you take a look at your worksheet, you’ll see we have, you know the I for innovation and I ask has your company developed any new products, services, technologies or business processes and you know if you have, write the notes in there.
So same thing as before, we’re just going to go through and kind of list out some things that maybe has changed for you over the past year, but at the same time, think about Oh hey, I was you know I was thinking about, you, know, putting some effort into developing that other product.
Well as you do that now, you can be proactive about saying OK, well, that product you know it’s going to need a name. It’s going to need a logo.
It’s going to, you know, be constructed in a new way so we should be thinking about the intellectual property from the get go and making sure that only those people that are involved in the process understand hat it is we’re doing so that we can kind of keep things under wraps until we know what to protect and what we can kind of let out of the bag.
So I will pause.
There and see if we have any questions thus far.
Yeah we actually do, which is great, jeanelle.
So someone asking, what’s the investment to register your business name and logo?
So typical attorney answer.
Right, it depends.
Registering your business?
That depends on what type of entity, you’re going to form.
So if you do something like a limited liability company.
In most states that’s not very expensive but if you want to offer stock and form a corporation that is going to cost a little bit more to register.
But also to get all of the bylaws and all the corporate documents together for something like that.
So that’s one piece of it.
And then trade marking.
That piece it also, I hate saying it depends, but it also kind of depends on are you trade marking a name that is probably not in use and probably can be pushed through the system. Not pushed, but can get through the system very quickly.
Or is it something that you know is kind of similar to some other things so it might need a little bit of massaging.
And then are there logos associated with it?
Are there taglines associated with it?
So that scope just can increase a little bit, so it sort of depends on what you are what you’re looking to do and what type of entity and how large a scope of trade marking you need.
But yeah, I’d like to give you a better answer but I just I’m sorry.
We can chat offline.
Yeah, no, that that’s a good point and I totally agree.
You know we are in a legal considerations webinar, right?
And as everyone here knows, like Janelle said it’s always going to be an it depends, especially since when we deal with small businesses, we’re dealing with people who are solopreneurs. We’re dealing with, you know, people have 10 employees people have100 employees and depending on what stage you’re at, is obviously going to change you know any of your legal considerations throughout the process, but like I said, you’re going to have Janelle’s information and you’re more than welcome to reach out to the Temple SBDC. I’m going to put our email in the chat right now for those of you that don’t have it already and we can always set you up the consultant and we can speak specifically on your business as well in the future.
And I think we’re going to keep going, Janelle.
OK, sounds good.
So next is V. V is ventures. So here we’re thinking about joint ventures and partnerships. Negotiating creating new deals with potential joint venture partners can open businesses to entirely new, lucrative audiences.
So here we’re talking about things like Co marketing arrangements.
Maybe bundling products and services with other clients or other companies. Co producing those products and services or just new ventures overall.
I’ve noticed that with within the past year there’s been a lot of business owners that I’ve known come together to form completely new partnerships in sort of similar industries, but maybe not even exactly the same. So this V sort of covers anything from starting from scratch, starting something new with someone all the way to hey I am a business like for example I had a client who I don’t want to give out too much information, but they joined with another company, it’s similar, I know what I’ll say and they did something along the lines of grass seed.
They coupled with a company that did something on the lines of fertilizer for grass.
So they decided to produce a product together that included both.
They packaged it.
Both names were on there.
They marketed it, it went out.
So it’s things like that.
It’s these creative arrangements that happen when business owners get together or you start to notice that Oh my product sells better.
You know my salty chips sell much better when they’re sitting next to a bottle of water than when they’re sitting next to chocolate cookies.
You know, maybe you Co market.
Maybe you go in together with the water company and say OK, you know here buy a bottle of water, get a bag of chips for half price or something.
I don’t know what it is, but you get the idea.
There’s so many opportunities out there to work with other businesses and other companies in different ways.
And sometimes they are very just loose and like hey let’s do a sale together, and there’s not really anything to back up how the proceeds get split out or things like that, but in a lot of situations, especially in service businesses all of that needs to be spelled out ahead of time so that we know OK if we sell, you know, an individual coaching service along with the program then you know I get this percent of the proceeds and you get this percent of the proceeds and we cross market to our different lists and whatever things go on like that.
So there’s a lot of a lot of creative things going on in that world, and think about, you know you see people have, and I’m missing the word for it right now, but influencers will promote other people’s products. Well they’re not doing that for free. They’re doing that because they’re getting paid for it or they’re getting some sort of revenue on the back end if they sell so many, they get so many dollars.
So or somebody comes through their link, they get credit for that.
So there’s a lot of a lot.
Of things going on in the world right now that are how can we work together? Not combine our companies. You know this is a project or this is just one product that we’re testing together.
Or maybe it’s a product that you know I’m tweaking the design a little bit, but I think your manufacturing company might be able to produce it in a different way, so I’m going to work with you on that.
So this is really thinking of thinking a little bit bigger, thinking creatively, thinking collaboratively with people that you know and people around you.
People in in your industry, even competitors I see come together on things sometimes.
One might have you know some little thing that they do better than everybody else so you know go to them and say, hey, you do that better than everybody else if if I can sell this with you or that you know, maybe we’ll both make more money, let’s try it.
OK, OK that’ awesome, that’s great. So these are happening a lot.
And I think this is the part of business that I really like because we’re not fighting with each other.
We’re trying to figure out how we can all make some more money together and how everybody can come together and get what they need out of these arrangements.
So there are many benefits of starting joint ventures like this, but it’s important to start with a legal agreement that clearly spells out the duties of each partner as well as terms identifying the details of how profits and losses will be divided contributions of each party and exit strategies. And as much as I see, these arrangements start to come together and I love seeing them, if there isn’t that language in place, if there isn’t a formal agreement in place, eventually these end. These arrangements and agreements oftentimes have an end date because it’s a promotional thing or because it’s a Co marketing thing.
It only goes on for so long.
Some of them last longer absolutely, but a lot of them have an end date.
But how do we split things up when it is an end date and we just want to make sure you know if you’re using my brand name on your product I want to have the rights back to my brand name even though I gave them to you to print on that package, you know, so there’s a lot of pieces that need to get worked out.
Just so at the end of this everyone can go their separate ways and make sure that everyone is happy with what happened and everyone thinks it’s fair so that you know maybe next month, come up with something new and they can work together again.
But what happens unfortunately when people don’t have the terms spelled out together is someone has a different expectation and they end up arguing about what that expectation was or should have been or should have and all that stuff.
So what we do, what my job really is is to pull out what is it hat the two companies are two people or company and people, whatever the the arrangement might be, what is it that they’re trying to accomplish, and how can I make sure that they’re both on the same page that we get it all in writing, and that when it’s time to end because someone sold their business or this is just the end date or something goes wrong, or it didn’t work, how do we get out in a graceful manner, making sure that everybody has what they need.
So if you take a look at your work sheet and the V is ventures.
Are you considering a joint venture Co marketing or producing new or current products with a strategic partner?
If so, note that here.
Then I’ll see if we have any questions.
Looks like we are good for now, Janelle.
I don’t like that I’m doing all the talking here.
All right, so the O stands for others and think of this as others in your team or others in your network, others around you.
Nurturing current relationships can create opportunities for competitive pricing.
Reduced overhead costs and long term quality and stability.
So what are we really talking about?
These are your relationships with people that you’re probably already working with your vendors and suppliers.
Maybe your clients, depending upon the industry that you’re in, could be independent contractors or service companies you’re working with, and even your landlord.
So what do I see happening here?
I see that times have changed.
We can all agree to that, right?
So things have changed, suppliers have gone out of business. Suppliers have come into business.
Supplies themselves have changed.
You can’t buy a fence to save your life right now because the lumber mills were shut down for too long.
So this is why I use the lumber xxample because I have a client right now who has a product that is selling she’s selling tons of it.
And so she negotiated with her supplier to get this product in some kind of MDF board.
And she agreed to buy very large quantities of this.
And you know what?
She got a very good deal on it and she doesn’t have to pay the inflated prices dverybody else is paying because she agreed to buy so much of it and now she’s selling it like crazy to people because she actually has it in stock.
So these what I want to think about here is think about the negotiations that you have with people or have had with people and and how things have changed, you can tweak things sometimes and you can make it work for you and when when things outside of your control change?
And I just want you to be on the lookout for these things.
So she’s making a boatload off of this lumber because she negotiated a deal that now nobody else can negotiate with the supplier that actually has this stuff.
Because you know she’s got it tide up, she’s getting it into her business.
She’s making all the money. That was because she had a great relationship with the supplier and she knew what to ask.
And now she’s you know off the charts. So it’s things like even the smalles things like that can make a huge difference.
One thing to note is with landlords and if you are leasing property commercial property, any property really keep notice of when your renewal dates are because you can negotiate your agreements prior to that renewal date.
Most people don’t know when their renewal date is when their last day to negotiate.
And they just roll over into the next year or five year period, or 10 year period, whatever it is.
But if you know those dates. you can talk to your landlord and say, hey, you know the market has changed.
I don’t want to leave this space, but there’s space for so much cheaper right next door.
So can we renegotiate what the rates are, or do I have to talk to the landlord next door.
They’re going to talk to you, but you have to know those dates.
You have to know those times and you have to know to ask for those things.
So I want you to keep your eye out as you pivot, and maybe you’re already doing this.
Maybe you’ve done it and now you need to make some amendments to some of the agreements that you already had in place but look at those agreements that you have in place and think about how maybe you could tweak them or change them.
Or, you know, have a good conversation with your supplier, your landlord, your independent contractor, or your service provider about.
You know, maybe it has to do with money only.
Maybe it has to do with terms, maybe you can pay something down faster than you could before, or maybe you need longer terms.
Maybe you need you know 90 days instead of 60 days or something like that.
But those little things can be a huge difference in your bottom line of your company, so I want you to keep an eye out for those things and make sure that you’re noting those as well, and then make sure you’re documenting them because it’s going to be important to keeping you safe down the road.
So these relationships are critical to the success of a business which you already know that if you’re a business owner.
They can drive the growth of the business and ensure that the business meets its revenue goals.
Keep an eye out because maybe you can exceed your revenue goals if you play your cards right in this situation.
So on the worksheet we’ve got the oh for others and I ask, are you negotiating with your vendors, suppliers, independent contractors or landlord?
And some notes here.
And that’s another thing that is good to bring up with, you know your attorney or whoever is doing some of these things on your behalf if you have other people helping you.
So I’ll check in with you Sarah and then if not, we can jump to the last one.
Yeah, I do have one question here.
So when you’re making relationships with these others, you know your vendors or your contractors.
How official does it need to be to have something be something you could you know sue someone on? So like if a vendor didn’t agree to a term or didn’t, you know, provide your supplies on time, do you need to have an attorney involved when you write up an initial contract or you know what would be involved in that process?
So absolutely you should have an attorney involved.
So if you’re dealing with an established business, they will probably have some sort of agreement.
In place already might just be a purchase order with some terms and conditions, but it’s some sort of agreement that you would be signing off on and.
The general rule here is just if you’re signing off on something, you probably want to make sure you know what it is you’re signing off on.
So if you don’t understand anything in that, or you’re not sure about anything in there.
Definitely give it to your attorney and have a conversation.
And the great thing there is that you know any small business attorney like myself we get that there’s different levels, and you kind of mentioned this before Sarah, there’s different levels of business and if it’s just you and you’re just starting out and your clients are, you know, just people like you trying to buy your services, for example, then you need something that’s very simple and straightforward, because when you present that contract or those terms and conditions to them and they look at it and Go well, what does #2 mean? If you can’t answer them, they’re not going to trust you, and they’re not going to buy from you, so they need to be very, very clear and easy for you to explain to them.
Now as you get up into like a larger medium sized business or manufacturing business for example, you might have master contracts, you know that are 10, 20, 30 pages long that you agree to have all of the terms and conditions spelled out with a certain supplier, for example. And then you have purchase orders that are like amendments to that master agreement for the amount of supplies that you’re buying. Let’s say you’re buying metal or something you you might have a master agreement in place, and then you just execute these PO’s to say hey, I need you know 100 pounds of that and I don’t even know what you’re ordering but you get the idea.
So when you’re starting out, companies in business probably have something already to give to you to look at and sign or and in that situation and have your attorney look at it.
But you probably want to have an attorney draft up what you’re going to be giving your clients, so you probably need some sort of client agreement or customer agreement.
If you’re selling online there’s terms and conditions.
Privacy policies on the website, things like that.
So hopefully I answered that for.
And I do have another question that just came in.
So as you stated and one of the attendees agreed, contracts can be really complicated with a lot of legalese, right?
If the contract is less than $5000, is there a way to just have a simple contract written up that isn’t as involved?
And it really, it really has to be suited to your business and what you’re doing and who you are.
So I mean, I write agreements for some of my clients that are, you know, for example, I have a client that does senior home care.
So she you know, goes in and helps seniors with different tasks around the house.
She needed an agreement that was one page very large font and very easy to understand because she’s dealing with elderly clients and she wants to make it very straightforward and easy for them.
So that’s what we did. We put together a very straightforward one to two — I think the second page had like the options you could check off, but so I think it was two pages, but we made it very simple and very straightforward for her clients.
And that’s really what you want because if you if you’re small and you’re dealing with, you know you know your client, if your clients elderly, for example in this situation, she knew exactly what she needed the contract to look like, and I helped make sure that we had the legal risks and whatnot covered for her within the constraints that she had.
Whereas I have other companies that are dealing with large companies and they have to submit their agreements to these larger companies so a little one page agreement that doesn’t have any legal wording in it is not going to fly with a big company.
They are going to submit it to their legal and then their legal is going to go well, where’s this and where’s that?
So we really tailor it to the size of business that you are and the size of business that you’re going to be presenting it to.
That’s great, and then I’m not sure if you have an answer to this, but someone you know.
If you don’t have an attorney, is there somewhere else you could get a simple contract?
Or is the best case scenario just getting an attorney for your business.
So you really want to get an attorney for your business and you want to do it sooner than later.
And there are attorneys out there that will work with you on like price and startups and whatnot, but I’ve seen so many businesses come to me when they you know they are starting to be successful in their sales, but they didn’t start out with an attorney up front and they’ve gotten themselves into trouble.
They you know, maybe their contract was pretty good, but they didn’t pay attention to the terms of payment and they have to wire transfer something which costs like $20.00 each time they do it and they have to do it within 24 hours of receiving something which it’s like I can’t do this like this isn’t reasonable for my business, but that’s what they agreed to.
So that’s just one example, but there’s a lot of just little things that that an attorney is going to help you pick up on and make smart decisions about and it’s going to help you grow faster because anything that you invest in and in really making sure that your business is whole and sound and you’re making the best decision possible it just helps propel you forward so much faster.
There’s all these hiccups that happen along the way if you don’t have that kind of smooth foundation, or that solid foundation.
All right, great, that’s all we have for now.
Well, let’s get to the T here before we run out of time.
T for time.
OK so T is terms and what we’re talking about here is your entity itself, and I know we had a question a little bit earlier about just entity and I did mention that there are different types of entities, so different businesses.
Excuse me, different business needs naturally required different types of entities and if a business dramatically reinvents itself when pivoting, or if a business is just starting, same considerations.
Honestly, it will need to re-evaluate its business entity. So there’s a lot of questions that go into determining what is the best business entity for you.
I know these days a lot of people jump right into limited liability companies.
And they’re generally speaking, they’re really great entities to have.
But before you jump in, we want to make sure that it’s the right one for you.
I just had a client have their accountant or CPA form a Texas entity for them and they’re looking at owning a business in New Jersey.
I have no idea why they have a Texas entity, doesn’t make any sense.
Now they’re going to file in two states. It’s a mess.
So I want you to think about ahead of time what is going to make the most sense.
For your business for what your business does, and I have some things here to consider and this is not, you know, an inclusive list by any means.
But do you plan on having investors.
Wou know if you eventually want investors well, most investors want to have stock. They don’t want to have membership in an LLC.
And if you’re really seriously considering investors, then you might want to go ahead and just file right off the bat in Delaware because every investor loves the Delaware laws so they would love to invest in a Delaware LLC or a Delaware corporation over anything else.
So these are some things we can talk about ahead of time, so you’re not wasting time, which is another maybe goes back to the question that we just had.
You know you could file an LLC with the state when really what you need is aDelaware Corporation for your investors, and you just you just wasted that time.
You didn’t have to waste that time.
You didn’t have to waste that money, that energy filing that if you would have thought through the process to begin with, so that’s one thing.
How much flexibility do you want as an owner?
Limited liability companies are great for flexibility. So if this is a smaller company
If this is services business.
If you’re not interested in investors.
LLC’s might be the way to go.
And the great thing about them is that they have different ways that you can allow yourself to be taxed when you’re an LLC.
And on that note, I often tell I always sorry not often always tell my clients I am looking at the entity from the point of view of the attorney in that I want to make sure that you’re protected from personal liability.
However, I also need you to talk to your accountant in CPA because they know where you’re at with taxes and they can help us determine if there’s a particular entity structure that is going to be taxed in a way that’s more beneficial to you.
No one likes tax surprises.
So, so that’s the piece that we’re trying to figure out there.
Another question, how important is it for you to be protected from personal liability?
You know if you are a single Member LLC, you might not be as protected as if you had multiple members in your LLC or if you were a corporation.
So let’s talk about that.
Do you have a lot to protect?
Do you not have a lot to protect?
What does your operational team and structure look like?
Has it changed?
You know, some people start out with with a Pennsylvania LLC that is member managed, which means that the members make all the decisions in the company.
But maybe they’ve grown and maybe now they want did I say that backwards.
Now they want managers to make those decisions and the Members to act more like stockholders.
They still make important decisions.
But to act more like stockholders.
So things like that can often change.
Do you want to minimize?
Taxes, that’s the CPA piece.
So we want to make sure that we’re on the right entity that will work for your tax structure at the time and these can change so we do need to talk about them on a regular basis just to make sure you’re still in the right entity for you.
And what works for one business owner might not be the best fit for another.
There are pros and cons to every business entity.
It’s not one size fits all, and as a business pivots or changes over time the wrong entity could restrain the company’s growth and hinder its success.
And of course we don’t want that.
So the last question on your sheet is about the terms.
Have you reviewed your entity type and tax status with your CPA and attorney?
And again, I would just recommend off the bat that everyone do this at least once a year just to make sure you’re in the eight entity that you’re filing the right tax status for where you’re at in.
And that is pretty much what I have to say.
If there’s any questions, we’ll go through them, but at the bottom of the worksheet as I say, congratulations, you’re ready to talk to your attorney about changes you made during the pandemic. So if you filled this all out, then you know exactly what you need to, what you need to talk about.
If you know anyone who could benefit from this information, please feel free to share the link: https://www.youtube.com/watch?v=dYYDldWrL94.
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*Janelle Peyton is the CEO and Managing Partner of Peyton Law, a leading boutique law firm designed to provide the highest quality branding, business, and legal services to companies via quarterly subscription called Strategic Legal Solution. Peyton Law offers brand building strategies through corporate and intellectual property law, including business entity formation, buy+sell, contracts, joint ventures, trademarks, patents, licensing, and other growth-related transactions.