Making It Legal:

Not that I’m a big follower of the Kardashian sisters, but it always amazes me what people will stoop to for fame. 

Take Khloe Kardashian’s shotgun wedding to L.A. Lakers basketball player Lamar Odom.  Apparently, after a one-month romance, they timed their 2009 wedding with Kardashian sister Kourtney’s pregnancy—so that they could be aired in the same season.  (The E! television network, which airs Keeping Up with the Kardashians, paid for the 250-person Bel Air wedding).  Since shortly after the wedding, rumors have been swirling that the couple is on the verge of divorce.  This could cause huge complications for Lamar and his four children from a previous marriage, and Khloe and her … money.

We’ve all heard the stories (and seen the Jerry Springer episodes) where romantic couples, having married within nanoseconds of meeting each other, grow to realize that their partner:

• Cheats
• Has really annoying habits
• Is completely irresponsible with money, or
• Wants to a totally different lifestyle (you’d like time with the kids; your partner is a workaholic)

Whatever the reason for the disagreement, it’s very likely that with a little digging and probing questions, your incompatibilities could have been uncovered far earlier. Same thing happens with business partners. Entrepreneurs are often so taken with the first flush of start-up fervor that they don’t take the time to see whether their potential business partner will be right for them for the long term, or only the short-term.

There’s more that goes into the partner-screening process than you think, and you certainly don’t want to look in the mirror this time next year, realizing that you’ve hitched your wagon to an albatross.

Many of us have complained about the state of the U.S. economy — particularly for small businesses. It seemed that there were large, sweeping forces outside of our control that created these conditions. However, there is now a way we can each take one small step to spur our local economy. It takes place on November 27, 2010 — the Saturday after Thanksgiving. And it’s called Small Business Saturday.

You know you’re going to be shopping for those holiday presents anyway, so why not do it at the local, independent retailers who are contributing to your city’s tax base? According to Cinda Baxter, founder of The 3/50 Project and national spokesperson for Small Business Saturday, 68 cents of every dollar spent with an independent retailer returns to that community. That means well-paved roads, solid schools, reliable emergency services and everything else a municipality provides (that often go unnoticed). Oh yeah, and more jobs in your neighborhood.

Listen in to my interview of Cinda Baxter where we cover:

• How her off-the-cuff blog post led to a viral, national movement (The 3/50 Project)
• The goals of Small Business Saturday
• Is AMEX/OPEN just another big retailer trying to piggyback off of small business? (No.) Or is it putting its money where its mouth is? (It is).
• How can we evaluate the “small” independent retailers we should be supporting on Small Business Saturday?

Some highlights of the Small Business Saturday initiative:

• Consumers are encouraged to celebrate the businesses they care about through social media sharing tools built into www.smallbusinesssaturday.com and www.facebook.com/smallbusinesssaturday.
• The first 10,000 business owners who sign up will receive $100 in free Facebook advertising.
• Business owners can download promotional materials and social tools to promote their businesses.
• For American Express card members, the first 100,000 to pre-register their card and then spend at least $25 on Small Business Saturday at a small, independently owned small business will receive a $25 statement credit.

Whether Gen X’ers like it or not, Gen Y is nipping at their heels — entrepreneurially, that is. So I’m pleased to announce that Making It Legal made the grade  of 50 Best Blogs for Young Entrepreneurs! At No. 6, we’re in the Top 10!  (Pay no attention to the fact that our Tools and Resources category was mentioned first).    We’re in illustrious company, including:

• Small Business Trends
• Seth Godin’s Blog

And fellow/sister Entrepreneur blogs:

• Daily Dose
• Networking Entrepreneur
• News You Can Use

Congrats to all!

Last year, I went in for my annual checkup, and did not like what the numbers were telling me. Cholesterol was up. Blood pressure was up. And–horror of horrors–my weight was up (again). I was close to turning my medicine cabinet into a functioning pharmacy, with a full color palette of pills, capsules and tablets. If I didn’t make changes soon, my health could seriously be at risk–which would mean ever-increasing medical costs.

You only have to hit me in the head with a brick a dozen or so times before I actually get the lesson. So this past year, I turned the corner: drastically reducing my consumption of fried foods and cheese (oh, how I miss French fries!), exercising regularly and vigorously, and dropping 15 pounds (and counting). This year, my numbers were great. I averted a crisis and put healthier habits in place.

So why not do the same for your business?

Year after year, it’s tempting to avoid the (juris) doctor. After all, who likes being told that your business partnership is on a legally shaky foundation, your client contracts have holes like Swiss cheese, and your website terms are so thin, they’re like going out in winter without a coat? (No one–I get it.)

But business law is a situation where “what you don’t know can hurt you.” In our litigious society, why leave these issues to chance? An unseen loophole or ambiguous language is all a savvy attorney needs to turn a sniffle (a technicality) into walking pneumonia (litigation). If business isn’t booming, your company could be just one step from a visit to the emergency room (bankruptcy).

No need for this to be guesswork–I have listed some of the top legal areas where small businesses are often vulnerable. You can start the diagnostic process yourself with my legal audit checklist, ““Is Your Business Legally Healthy?” Once you’re through, you’ll know (as I did) where you may need to incorporate healthier (legal) habits into your business, so that you’re in good shape by year-end. 

Over the past two years, the small business environment has changed dramatically. This year’s New York Times Small Business Summit in NYC on Sept. 23 will explore the next steps of social media marketing and how best to navigate a new economic and legislative landscape.

The event is sponsored by OPEN/American Express, and the 2010 speaker lineup includes keynote addresses by Jerry Greenfield, co-founder of Ben & Jerry’s Homemade Inc. and Robin Chase, founding CEO of Zipcar and GoLoco.

I’ll be a panelist for the “Grow Your Business: The Nuts and Bolts of Running a Business” session, running twice—in the morning and the afternoon.

For more information and to register, visit http://nytsmallbusinessummit.com/index.php

Will you be attending the Summit? Let me know, and I’ll look forward to seeing you there.

What do you want to know about business partnerships?  Join me and Melinda Emerson, The Small Biz Lady, for a TweetChat at 8pm (ET) on Wednesday, September 22nd.  I’ll be sharing my insights on business partners, what makes for a solid partnership, and what parts of the process you DON’T want to DIY.  Sign up for Melinda’s weekly #smallbizchat show, which focuses on all the things that small business owners need to know to run and sustain a thriving company. Follow @SmallBizLady for her regular small biz updates.  AND, to get a preview of the tasty morsels I’ll be sharing, make sure to follow my Twitter updates on @NinaKaufman!

In my more than 15 years of practicing law and working with entrepreneurs, I can say there is at least one bright spot in the world of business partnerships. Now, I haven’t done a formal survey or hired a company to run focus groups, but I’ll say this based on what I’ve seen from working with business owners over the years. Let me say, too, that I believe 2010 will herald a big increase in the number of people who are working together, as active business owners find ways to “partner” with other companies to expand their reach and generate income.  Here’s my grand epiphany:

Nine times out of 10 (maybe even more) people do not go into business together with the intent of swindling each other.

So why is that good news?

Because so many entrepreneurs shy away from opportunities to expand their business and their customer base for fear of getting “screwed.” In my experience, business partnerships generally don’t break up because someone had his or her hand in the till. They break up because, over time, the personal and business goals of the owners were too divergent to be reconciled under one roof. Or, like marrying after the third date, the owners didn’t take the time to really get to know each other (and themselves) sufficiently before “tying the knot.”

That’s where my recently released program, The Entrepreneur’s Prenup: How to Choose a Business Partner Who Won’t [Bleep] You, can come to the rescue. In plain English, it outlines the significant issues you’ll want to discuss with your “significant other” (for the business, anyway) and helps you find a framework for discussion. It also covers why partnership agreements are so important. Given that so many business partnerships have the potential to end poorly, it’s even more vital that you have thought through the “what ifs” of how you will go your separate ways should you ever need to. An orderly transition can mean the difference between a buyout that allows you to relax in Tahiti and a buyout that costs you more in time, money and aggravation than your ownership interest was worth.

To learn more, visit www.EntrepreneursPrenup.com!

You may roll your eyes and picture your grandmother waggling her finger in your face saying, “An ounce of prevention is worth a pound of cure, young lady,” but she was right. How simple would it have been to floss regularly, instead of having to go through the time and expense of filling a cavity? My husband recently chose to undergo arthroscopic knee surgery for a meniscus tear. 

Notice I say “chose.” He was in some discomfort, but the result of not dealing with it now could have meant more serious, invasive and expensive surgery later–not to mention the increased risk of never getting the full mobility he once had. [Crazy man, he's back to running as he did before the surgery!]

Your business is no different. If you think of the legal foundation as the skeleton of your company, are you making sure that the bones don’t get brittle and break? Here are some of the different “bones” of your legal foundation:

• Entity formation and corporate formalities–have you been keeping up?
• Business ownership–are expectations clear with partners and investors?
• Financial issues–Any personal guaranties? Are you current on all bank loans?
• Contracts–Have you been meeting your obligations? Have others been meeting their obligations to you?
• Leases–Do you know the terms?
• Employee and ICs–Are you using them properly?
• Intellectual property–Have you protected yours and guarded against misuse of other people’s?

 If you’re reading this with eyes glazed over, your business records and practices may not be fortified against potential claims and lawsuits. For an ounce of prevention, get a copy of my legal health checklist, Is Your Business Legally Healthy?, available through my GreatBusinessLawResources.com site.  It will help you spot the areas where your bottom line could flatline!

Here’s an example of not-so-smart tax planning:  doing nothing.

It doesn’t take a lot to sit down with an accountant to explore the deductions and credits you’re entitled to as a small-business owner.  For a great overview of the top issues, visit Wells Fargo’s newly released webcast on Smart Tax Planning for Your Business, part of the bank’s series of webcasts for small-business owners.  Moderated by Rich Sloan of StartUp Nation, the panel features Carol Sanchez, CPA, Bruce Willey, JD/CPA, and moi.

Are we taking whatever walks through the door because we’re afraid there won’t be another piece of business .  .  . ever? There’s an old adage, “You can’t make a silk purse out of a sow’s ear.” You could have the best possible systems in place for handling your clients and delivering your services. But if the raw materials you’re working with–the client–is substandard, you’re bound to run into serious hiccups along the way to getting paid.

Problem clients tend to have identifiable characteristics, as I mention in my article, “Profiles of the Top 5 Problem Clients.” From your first meeting with them, you sense that they are:

• Petulantly dissatisfied .  .  . with everything
• Looking for a deal .  .  . before you even mention your pricing
• Starting and stopping projects with a variety of service providers just like you
• In a crisis, with deadlines of .  .  . last week
• Hedging about your terms, and that collecting will be like grasping smoke

WANT TO KNOW MORE? You can, by checking out my downloadable program, “How to Train Your Clients to Pay You.”  You’ll get lots of valuable insights worth hundreds of dollars for a fraction of the cost!

Turn off the TV.  Leave the e-mail alone for an hour.  The kids will fend for themselves.  It’s time for your Hour of Power–and learning how to create a business partnership that works. Just one hour–8 to 9 p.m. ET–can take you from tailspin to steady . . .  so make sure to sign up for The Entreprenur’s Prenup teleclass now!

If you have any inclination to work with a business partner, I hope you’ll be joining me for my FREE Entrepreneur’s Prenup teleseminar.  It’s easy to identify the high points, but the low points tend to get glossed over.  Learn what they are so that you can avoid them!  Sign up today!