How important is a business’ location? That is a very loaded question because generally it depends on the type of business. Businesses that rely on foot traffic, obviously, need a location where there are a lot of potential customers walking by. While that seems like an obvious answer what about other businesses? Does a software company need to be in Silicon Valley? Does a surf company need to be in Hawaii? In today’s rapidly evolving economy, more and more businesses are breaking through the old stigmas about business location.
Two West Michigan entrepreneurs are prime examples of this. West Michigan is not known for its skateboard or biking scenes, but that is not stopping Six Starz Skateboarding & Surfing Co. and 616 Bicycle Fabrication from setting up shop here. Six Stars was founded by Chad White who combined his interest in clothing and fashion and his love for skateboarding to start this new business. 616 Bicycle Fabrication was formed by Aaron Joppe and his partners. Joppe sold his ownership interest in the national brand Slingshot Bikes to start this hand crafted bicycle fabrication company. While neither is in an industry that is usually associated with West Michigan, they are both determined to not only impact local culture but to see their businesses succeed on a national level.
The contract seems like a relatively straightforward business mechanism: you put down what both parties duties are and then you sign it. Seems simple, or is it?
Let’s look at this simple contract statement: “Farmer agrees to sell 10 cows to Buyer for $1000.00.” That seems cut and dry. There is one obvious problem in the eyes of this contract attorney. The term “cows” is ambiguous. Are these young cows, old cows, brown cows, black cows, big cows, small cows, female cows, or male cows? There will be no problems if the 10 cows are delivered and they are what the buyer wanted but if they are not then there is a real problem because of the ambiguity of the term “cows”. Ensuring that the contract matches exactly what the parties agree to is important so the wording of the document needs to reflect that.
Contract law gets even more complicated. Certain contracts need to be in writing to be enforceable and some actions can constitute a contract regardless of if there is a writing or not. Enforceability of terms of a contract can be waived if not enforced within a reasonable time and rights can be given away if the contract is agreed to.
There are two professionals that every small business needs: an accountant and an attorney. These are also the two things that most small businesses try to avoid. I have heard it before from small business owners: “I would love to hire an accountant or attorney but I just can’t afford it.” As any accountant or attorney can quickly tell you, by the time most clients contact them it’s too late and the cost to the client grows exponentially.
So how do you go about choosing an attorney that works for your small business? My advice is to shop around. The business law firm that you hire should not only be competent to handle your needs but you should also be comfortable with them. Your small business is most likely tied to your dreams. Either the business is something you have always wanted or is something you want to succeed so you can accomplish other goals. In either case, your attorney is going to be crucial in guiding you and your business to accomplishing those goals. Allowing someone to have that much access and control over your dreams, should not be a random name pulled out of the phone book. Talk to the attorney and get to know more about them and what they can do for you.
Another big question is do you go to a big law firm or a small law firm? Big firms allow you access to many highly proficient attorneys but because of the high overhead those attorneys generally charge more. Small law firms can be more financially friendly but may not have the access to the resources of a large firm. This is another reason why shopping around can serve you best. If a big firm can offer their services for a reasonable price then you might choose them. If a small firm can offer you the general business counsel you need then you might be best served by them.
The old adage “measure twice and cut once” has often been the theme for startups. The idea behind this being that startups had to take months, if not years, in the planning and developing stages. Entrepreneurs often want to make sure their ideas are refined and near perfect before moving into the manufacturing and selling stages. This was also the time period that many startups floundered. Any entrepreneur will tell you finding funding for a dream is difficult but to find it for an extended period of time is nearly impossible.
One program in Grand Rapids is looking to not only break through this traditional thinking but to crush it. "Think. Make. Start." which begins August 3rd, is a competition that pairs designers and entrepreneurs to form teams that will compete in a condensed version of the planning stages of a startup. Competitors will attend a day long workshop on the first day and then will have less than 4 weeks to develop their idea into a product that will be nearly market ready. The winning team will be chosen on August 30th and will receive $5,000.00 in funding from West Michigan based entrepreneurial launch pad Start Garden.
Part of the business planning process is picking a location for your business. Sometimes economics play a part in the decision making process other times the location of potential customers governs where the business is set up. But can West Michigan be the best place for a startup business?
One startup laboratory feels that West Michigan is a great location for their new business. ArcticAx, a Canadian company is forming a new bio-life science start-up lab that will process genetic tests for age-related macular degeneration called "Macula Risk." They chose a location for this startup in Grand Rapids, Michigan over New York. ArcticAx stated this location was chosen because of West Michigan's "talented pool of technology work force, world-renowned universities graduating the next generation of tech talent, and Grand Rapid’s excellent infrastructure." The state and local incentives were also beneficial. It is anticipated that this entrepreneurial endeavor will create 28 laboratory jobs over the next three years in addition to the work it generates for the $1.9 million build out for the laboratory.
There are an overwhelming number of rules for a business owner to follow. Federal, state and local laws, internal bylaws, and industry specific regulations can create a wide range of obstacles that can trip up a business. There are even situations that you can believe you are in compliance and be under the impression from the authorities that you are in complance only to later be shut down because of a violation of an ordinance. This is what one young entrepreneur found out the hard way.
Nathan Duszynski is ahead of his years. This 13 year old entrepreneur was able to save money to purchase and begin operating a hot dog cart in Downtown Holland, Michigan. Duszynski was able to get started during the Tulip Time Festival and planned to continue operations out of a local business’ parking lot. Duszynski had gotten permits and licenses from the City of Holland and from Ottawa County. After only a couple of days of running his small business, Duszynski was shut down by the City of Holland because of an apparent zoning violation.
Duszynski’s story is unique because of his age but a small business being shut down by a government entity is not rare. Zoning ordinances are just a few of the many laws that a business must be in compliance with. While it appears that Duszynski appears ready to fight this, like the food truck debate in Grand Rapids, there are no guarantees with taking on that battle. Being able in compliance with the plethora of rules and regulations can be daunting but with a little planning these stoppages can be avoided.
Big Business Helps Small Business
Sometimes as a small business owner it seems like you will never get a break. Endless hours of toiling and hoping that something will go your way. Software developers hope that companies like Google or Yahoo will pick up on their idea. Local bakers are looking for national food manufactures that want to turn their goods into grocery store items. Many small business owners would love to see their goods or services go national.
Meijer is looking to help out at least two small businesses come this holiday season. Meijer is running its Next Big Toymaker contest that will allow small businesses that manufacture toys a chance to land space on Meijer’s toy selves just in time for the holiday rush.
This could be the big break that two small toy manufactures need. Being on the toy selves of such a well shopped and regional presence like Meijer is can be the push that a small business needs. Not only does the opportunity provide far more exposure for the small business’ products but the increase in revenue from the holiday season can help fund other opportunities. So are we going to get a sneak peek at the next up and coming toy company this holiday season? Only time will tell. Good luck to all those that submit entries.
Startup vs. Starting a New Business
Recently I was speaking with a few people at a networking event and the question was posed to me if there is a difference between a startup business and just starting a new business. I answered the question but as I did some looking around I realized that this person is not alone with his inquiry.
Everyone knows what forming a new business is. This the incorporation or formation of a business entity that does landscaping, runs a grocery store, sells clothes, or any number of things. Often times these businesses are considered small businesses even though some do not start off small or stay small for very long. These types of businesses are sometimes called lifestyle businesses because the individual or individuals that own the business are just running a business while still living a relatively normal life. In baseball terms, starting a small business is just trying to get on base.
Startups on the other hand are started by people that are looking to change the universe. While they are business in nature, in reality they are the development of an idea or the creation of something new and revolutionary. Theses startup ideas are often times not the reinvention of the wheel but making the wheel work better. In baseball terms, people that create startups are looking to hit a grand-slam homerun. They want to take their seed of an idea, develop that idea into a product, get funding, get a buzz going, hire employees, get more funding, and ultimately have their idea spread like wildfire while they make millions. People that form startups find that the startup takes up all of their life. When they are not working on the idea and development side of things, they are working on the business side of things, and then they still need to find time to market the product and work on that all important funding issue. While a lot more goes into the startup the payoff and the lasting impact can be worth it.
As you can see even though there is some cross over, there is a difference between forming a landscaping company and being able to mow lawns more efficiently than the competition and having an idea of a new machine that can mow lawns more efficiently. It is very common for people that have small businesses to venture into the startup area with new ideas. Either path you decide to take, it is important to have a support system around you. Your financial, advisory and legal needs are important and too often people take on the “do-it-yourself” mentality, get into hot water and then it’s too late. Contact someone with experience with these matters and pick their brain. It’s well worth it.
Online Legal Services vs. The Traditional Attorney
As most successful business minds know, being able to keep overhead low means that profit margins are higher. One of the increasing popular methods of cutting costs is instead of hiring an attorney to handle your business' legal needs businesses are going to an online legal services website for their legal needs. But these services can often times fall short of accomplishing what you want.
Here is a classic example: An individual wants to incorporate his business so he logs onto one of the many online legal services sites and gives them all of the information and pays them their onetime fee. That site then files articles of incorporation for that person with the state. That person now believes he is protected from liability because he is a corporation. In reality, all that site did was file a document with the state and the state said, “sure we will recognize that corporation.” The site did nothing more than that to create a corporation. The site fails to execute any of the internal documents and agreements required to create a corporation, fails to call meetings and take minutes of those meetings, and fails to issue stock. Basically all that site did was reserve this person a name with the state.
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The purpose of this blog is to educate the public on the current issues that are affecting businesses. Posts will range from business news to business tips and other information that might be helpful. It is our firm's goal to help bring to light some of the many issues that are impacting local and national businesses. As can be seen from our website, we are looking to cover information that is pertinent to small businesses, startups and entrepreneurs, as well as established businesses.
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