Making It Legal:

Mastermind group dynamics are like baking bread: while the process may be straightforward, it takes a delicate touch to make sure that all of the ingredients are in the right proportion and that the dough is kneaded properly.

What’s needed to get started?  A group of people who are willing to make a regular commitment to each other. Sounds simple, but the experience can very quickly turn into a Goldilocks-type exercise.

• Time commitment. How often should you meet? For some, every week is too frequent; every month is too distant. What’s “just right” can depend on the person.
• Number of members. Eight may be too many; four may be too few. In her post, “what is a mastermind group?” Iulia Mihai says that 5-6 is “just right.” (She also provides a link to Jack Canfield’s free Mastermind Planning Guide)
• Meeting agenda. How tight you make it? Do you make allowances if someone has a crisis and requires more than their allotted time?
• Accountability. Here, especially, there’s a need for a delicate balance. On the one hand, group members need to be accountable to themselves and to the other members of the group for the steps they say they will be taking to further their business from one meeting to the next. On the other hand, situations can throw a monkey wrench in the works. How we draw the line between legitimate reasons for not meeting goals and “dog ate my homework” type of excuses?

And finally, there is that elusive element (as in most relationships) of “chemistry.” I’ve been part of mastermind groups in the past.  Over time, those groups had difficulty sustaining the passion with which they started. Perhaps it was that we didn’t have sufficiently similar interests and goals. Yes, we were all women business owners who want to grow our businesses and increase our revenues while providing valuable service. In the end, though, that wasn’t enough to keep these particular groups alive.

I’d love to hear your feedback about what has made your mastermind group work. What were the common bonds? Or was it your diversity that provided the magic ingredient?

Leadership expert Ken Blanchard once said, “Feedback is the breakfast of champions.” But if you’re working solo (or in a small company), where will that feedback come from?

Small and solo businesses can get feedback in several ways:

1. A Board of Directors. If there is more than one owner in your company, you have automatic access to a “board of directors.” Directors are usually people within your company who have executive authority to make major decisions. As noted in the E-Myth post, “Do You Need a Board of Directors?” a board of directors can help develop business plans, handle policy issues, focus overall business strategy and monitor a company’s financial strength. However, when you bring in a board of directors, this will be the team that decides and implements change for your company. Decisions will be mandated by a majority.
2. A Board of Advisors. Advisory board members don’t have a legal responsibility to your company. And you don’t have a legal responsibility to take the advice they give. However, as Bert Martinez points out in “The Value of the Board of Advisors,” they still have at least a “moral” responsibility to give you the best advice possible. A board of advisors can provide you with objective opinions, credibility and the value of learning from OPE (other people’s experiences).
3. A Mastermind Group. Whereas a board of advisors convenes to focus on your business, a mastermind group convenes to help each of the members of the group. Consider it a peer advisory team. But like a board of advisors, you don’t want people who will rubber-stamp your ideas and plans. There’s a delicate balance in finding the right people: they need to be supportive yet also willing to challenge you. And you need to be willing to listen to the challenges and concerns they raise.

Whichever way you choose, don’t overlook the power of feedback. Steve Jobs suggests that you “ask for feedback from people with diverse backgrounds. For each one will tell you one useful thing.”

I have vivid (and not always pleasant) memories of the dating scene. There’s a huge amount of pressure to find “the right one.” But how can you know? Who’s really ideal for you?

The answers to those questions take a certain amount of introspection. First, you have to know your needs and desires. Do you want to be with someone who lives locally or are you willing to move? Do they need to be handy around the house — or in the kitchen? Is financial stability (and therefore, their earning potential) important to you? Does it matter if they have children from a prior relationship?

Next, there’s the chemistry factor. It reminds me of the old Jewish joke of the man in his early 30s whose mother was desperate for him to be married. He was very picky. He had a list of 99 qualities that his ideal bride had to have. One day, he burst in the door and exclaimed to his mother, “Ma! I’ve met her! I’ve met a woman who’s got all 99 qualities. She meets every one on my list!” The mother breathed a heavy sigh of relief and cries, “Thank God! When’s the wedding?” The son replies, “Wedding? There’s no wedding. I can’t stand her!”

Choosing professional advisors for your company (you knew I’d come around to that eventually, didn’t you?) is not much different. As I mention in my program, “How to Choose and Use Attorneys,” you have to be very clear about your personal needs and feel comfortable with the “chemistry” you have with the advisor. For some reason, entrepreneurs seem stymied when it comes to knowing what questions to ask so that they make the right choice. For example, you’ll want to know:

1. Do you practice in my state? I routinely get e-mails from business owners around the country looking to hire me. However, attorneys are licensed on a state-by-state basis. As a result, if I’m not licensed in your state, I can’t ethically practice your law.
2. What’s your background and experience with my issues? We all know that lawyers are more expensive than a cup of coffee at the local deli. When you make the financial investment in legal advice, you want to be sure that the person “has the goods.” Ask for examples of issues handled.
3. How do you charge? Yes, lawyers tend to bill by the hour, but more and more, they are developing pricing on a project or monthly retainer basis. Don’t be embarrassed to ask for the numbers, as well as an estimate of what you think it will cost to handle your issues.
4. Who’s doing the work? You may have a great rapport with a particular attorney, but depending on the firm, she may not be the one actually doing your work. You want to know how your matters will be handled. (That can affect your costs, as well.)
5. Finally, there’s “chemistry.” Especially for smaller businesses, professional relationships are vital for their survival. You need someone responsive. You’ll want to feel very comfortable picking up the phone or sending an e-mail when you have questions or need something explained. Plus, you want to get a sense that you will be well taken care of — not just shoved to the back room because you’re not generating $1 million a year for the firm.

Today, I’m taking a deep breath, because it may be my last one for a long time. Starting Monday, I’m beginning the process of totally redesigning my website. Anticipated launch is early-to-mid-January (stay tuned!). Before reaching this point, I needed to come up with a logo, consider the “architecture” for the site and tweak more than 90 articles for better SEO. Oh yes, and then there’s the actual design of the site. Leaving aside the prodigious number of hours involved in the preliminary tasks alone, here’s the $64,000 question:  Do you really think that I, a trained and practicing lawyer, have the time and talent to handle all of these items?

If you guessed “no,” you’d be right on the money.

That’s where many entrepreneurs — especially solopreneurs — go awry. They are so busy trying to “do it yourself” that they lose sight of the forest for the trees. It reminds me of several of the points that I raised in my article, ““Three Big Reasons Not to Do Your Own Legal Work”.”  They are:

1. It’s not a productive use of your time. I have a lot on my plate. As I’m sure you do, too. In entrepreneurial ventures, the best use of your time involves playing to your strengths, rather than re-educating yourself to overcome weaknesses. I may have a passing understanding of how SEO works, but it’s not my strength or the main focus of my work. Likewise, does it really make sense for you to take precious time away from your core business to earn a DIY law degree?
2. You may not have the training to do it right. I’m not trained in JavaScript or graphic design, and my brand requires that I end up with a reasonably professional-looking website. If I had to do it myself, well, it would be like trying to pass off a 5-year-old’s stick figures as appropriate for the Metropolitan Museum of Art. Fuggeddaboutit. Your business also needs to stand on a solid foundation, and having the right legal protections in place is part of it. If you’ve not been trained to spot the legal issues, how do you know if you’re making the right legal decisions?
3. You risk developing a puny business mind-set. You know the expressions, “There is no ‘I’ in ‘team,’ ” and “It takes a village.” Well, building a business that is sustainable and can withstand your absences takes more than just you to run and grow it effectively. I spent many years with a team of only one (a former business partner). As long as we kept looking to each other for our “brain trust,” our ideas were limited, our knowledgebase was limited, and, frankly, our income-earning capacity was limited. Only when I started to expand my circle did my creativity, possibility and revenue expand, as well.

Q: I have worked for my dad for more than a decade. He recently told me he wants to stop working but says he is not retiring. He wants to be paid the same amount of money and he wants himself and his wife to keep being covered by medical insurance through the business. He said he would give me a percentage of the business–I think 10 percent at the start and then the rest in 10 years. This sounds very unfair to me and a great deal for him. I have tried to talk to him to see if he is flexible on some of these points, and he says no. I’ve tried to setup a sit-down with him to try and reason with him but he keeps canceling. Do I have any rights to any of the business since I am his son and have worked to build the business up?

A: The short answer is that without either a written agreement concerning ownership, or an agreeable parent who will transfer it, you could be in for a difficult ride. You don’t have any rights in the business (while he’s alive) simply because you are his son. While there could be a strong “fairness” argument for making you an owner because of all the time and effort you’ve put into the business, “fairness” is often a matter for the courts. And once litigation starts, there’s no guarantee how it will turn out, or whether there’ll even be a business left to take over once you’re done.

Rather than sitting down with just the family, this might be a ripe opportunity for all of you to meet with a professional mediator. Sometimes, having a neutral third party in the mix helps people act more rationally.

 There’s no use trying to find an accountant on April 14th and hoping that your issues will miraculously be resolved by tax deadline time. Like hiring other professionals and vendors for your business, you want to take your time to select them carefully. And you want to have them in place before you have an immediate need (read: crisis).

So how can you go about finding one and what should you ask? As Gray Rollins points out in his article, “How to Choose the Right Accountant,” there are certain things you want to look for:

• Find someone local. Tax laws vary from state to state and you want someone who’s up to date on your issues.
• Ask people you trust. Sure, you could go to the Yellow Pages, or find an online ratings system. But if you ask people you know (like other entrepreneurs), you can better gauge whether a particular accountant is a fit for you.
• Get their qualifications. You’ll want to work with an accountant who understands your issues. Those who specialize in tax preparation for W-2 employees may not know all of the benefits in the Tax Code that are available to business owners. Similarly, accountants whose client base focuses on machine manufacturers might not have the same level of familiarity with the best tax structures for knowledge workers.

Still stumped? My How to Choose and Use Attorneys program  contains a full questionnaire of 20 issues you’ll want to raise with most professionals you hire—not just attorneys.

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.

OK, I confess.  I may have conquered the art of posting regularly to Making it Legal, but I still feel overwhelmed at times about moving through the world of social media.  Like I don’t have enough on my plate already?  It reminds me of my sister-in-law’s recent birthday party.

The whole clan (there were nearly 20 of us!) got together at Carmine’s Restaurant and sat around a huge table.  First came the garlic bread.  Then the antipasto.  Then the Caesar salad.  Then the fried zucchini strings.  Then the penne with tomato sauce and pesto tortellini.  Then the chicken with mozzarella cheese.  The broccoli rabe with garlic.  Then dessert:  biscotti and chocolate mousse cake.  Frankly, by the time the pasta came around, I was done.  But I kept eating.  It was so scrumptious.  I was so full I could barely breathe . . . and felt just this side of sick!  I walked out of the restaurant v-e-r-r-y slowly.  I just couldn’t digest it all.

When dealing with social media, there’s so much to digest and understand–especially to use it effectively.  That’s where I’m thrilled to have my own social media Sherpa, Lena West.  She has a helpful post (yeah, OK, it’s from last year, but the advice is solid) on social media time management that bears reading.

Okay, I get it.  We’re a big ticket item.  We come with a bad reputation.  We can be nasty and ugly (although I’m kinda cute) and speak in a strange jargon . . . where it seems we’re deliberately trying to play intellectual one-upmanship games with you to let you know who’s the smartest guy/gal in the room.  You’d rather undergo root canal without anesthesia than deal with one of us.

And yet.

And yet, we can be your greatest support system.  Your protector.  The cool head prevailing when you’re ready to lose your mind.  The one who talks you down off the ledge.  And maybe (if you’re lucky enough to work with me), we’ll tell you a joke or two and make you laugh, so that you realize the world won’t come to an end if that truly awful deal doesn’t close. 

In his article in the New York Enterprise Report, Daniel Abrams identifies 10 ways you can get the most out of your attorney.  But before you reach that point, you also need to be sure you’ve chosen the right one for your business.  My program, How to Choose and Use Attorneys, available through GreatBusinessLawResources.com, can show you how to do just that.  Like dating, you want to be sure you have the right chemistry with your attorney so that you’re comfortable being vulnerable and exposing your not-so-perfect qualities/decisions.

This economy has certainly battered my business around a bit. There are times I’ve felt like a ship in a storm-tossed sea. But I have been able to stay on a relatively even keel and keep my sights set on my destination, thanks to my advisory team.

“Advisory team.”  It’s a highfalutin’ term for what some people consider good friends who will be a sounding board for you in a pinch. Whether you pay them or you don’t, have formal arrangements with them or not, they are crucial in one major respect: You can’t build a successful business without them. 

I’ve learned from personal experience that I really flourish when I have others helping me keep my eyes above the dashboard, making sure I keep working toward my strategic goals. Without them, I’ve gotten stuck in my own mishegaas, like a dog chasing its tail. I have people I’m accountable to (other than me, my own worst taskmaster). People to keep me focused so that I don’t spread myself too thin. People to share the victories with. Two who come to mind are Dawn Fotopulos of SmallBusinessHow2.com (”simplify, focus and leverage” is her mantra for me) and Rochelle Lisner of DynamicBusinessGrowth.com (who reminds me to “speak in stories” not “information dumps”). And there are more!  I wouldn’t be where I am without them.

You can build a dream team of your own, too! For tips on how to do that, sign up for a complimentary copy of my Entrepreneur’s Business Law Primer, available at GreatBusinessLawResources.com/bizlaw. It includes an audio clip on “how to choose an advisory team” that I think you’ll find helpful.  Let me know if you do!

I was sitting with a colleague, Matt Clifford of The Island Financial Group last week, chatting about a range of things: the economy, is the administration’s Stimulus Package truly stimulating (or is it a handout), and how small business owners can protect themselves.

Our conversation then moved to “whom can you trust?” With the seemingly pervasive attitude of fear, how can business owners protect themselves in areas where they might not have enough experience (e.g., financial planning, accounting and law)? How can they feel comfortable trusting those professional specialists? For starters, we came up with a list of Top 5 questions to ask those who will become part of their trusted advisor team.

Choosing a Financial Planner:

1. What does “financial planner” mean to you? What will you be doing for me? Manage/invest my money? Write a plan? Set goals?Sell insurance? Some combination of the above?
2. What’s the breakdown (in percentages) of your own income? How much comes from money management fees? Fees for plan creation? Selling insurance?
3. How can you help me create a lifestyle for myself and my future? How can you help me take the money I accumulate and turn it into an income I can live on?
4. How will you help me protect what we put together? What will you/we do to protect against the effects of inflation, market downturns, disability, prolonged illnesses and more dependents (e.g., caring for parents or siblings)?
5. Tell me a story: How were you able to help someone in similar circumstances to mine?

Choosing an Accountant:

1. How will you act as my advisor? Are you just filing my taxes or is there more you’ll do?
2. How can you help my company meet its financial and tax goals?
3. Can you help me determine the profitability/feasibility of major financial decisions, such as buying equipment, business acquisition or business expansion?
4. What is your background and experience with companies in my industry? With my revenue levels? With the particular issues my company is facing?
5. Do you have your certified professional accountant (CPA) designation, and will that be important for the kind of work I’ll need done?

Choosing an Attorney:

1. What is your background and experience with companies in my industry? With my revenue levels? With the particular issues my company is facing?
2. How do you charge for your services? Hourly rates? Flat fees? What are those rates/fees? Do you require monthly retainer payments or do you charge on a project basis? How can you help me keep my legal fees and costs down once I’ve hired you?
3. Who will be doing the actual work on my matters? You? Or someone else in your firm? (Make sure you meet those people, too)
4. How will you keep me informed about the progress of my matters? Should I call you periodically? E-mail check-ins? How quickly can I expect to hear from you in response to my call or email?
5. Tell me a story: How were you able to help someone in similar circumstances to mine?

For more details on how to hire an attorney, when you’ll want to have one on your team and how to manage the relationship so that it works for you, I’ve created a program, How to Choose and Use Attorneys, available through my site GreatBusinessLawResources.com. It comes with a handy checklist/questionnaire to make sure you ask the attorney–and yourself–all of the pertinent questions you want the answers to when you’re pre-screening.

I try to be generous with the information I share. But the short of it is this: I “sell” my expertise. Maybe you sell stuffed animals. Or face cream. Or jackhammers. Or website design. With all of my years of expertise, I take the vast subject that is “The Law” and implement for my clients it in the form of agreements (among other things).

(Marketing experts may take issue with how I describe what I sell, but that’s not the point here).

The point is: If you don’t want to give away your product or service for free, don’t go to an expert in another field and schnuckle around for freebies. Another way of saying this is: If you value being protected against lawsuits and recognize that there is expertise “out there” that you lack and that could protect you, that expertise has a value. And we honor that value in our capitalist system by providing something of value (namely, money) in exchange for it.

(Note: This isn’t meant to start a debate on whether the Obama stimulus/bailout bill is leading us toward socialism).

Today’s rant is brought to us by the letter “O” “One thing I want to include in my agreement is______; how do I phrase it?” For example:

• “I need an exclusivity clause”
• “I need something that talks about my owning what someone else is making for me”
• “I need verbiage about my being able to kick out my business partner if he doesn’t pull his weight”

Unless you expect to give handouts to others, do the right thing. Include in your budget a bit for legal and other professional fees. The karma of professionalism will come back to bless you.