Iowa Caucus Countdown: The Republicans

The Iowa Caucus is this Thursday, January 3rd.  The national media has descended upon us and at least one of my restaurant clients I talked with recently is extremely thankful.  Yesterday, I featured the Democratic candidates and today it's the Republican candidates.  Again, my intent is not to endorse any particular candidate but rather provide a little bit of commentary based upon my observations in the neighborhood. 

Rudy Giuliani - battle tested and has demonstrated his leadership abilities after the terrorist attacks in New York City.  Believes in low taxes and small government.  His stance on abortion and gay rights is opposite the typical Republican.  Personal life is messy.  The fact he campaigned less in Iowa than other candidates will likely hurt his chances for a caucus victory.  See video here.

Mike Huckabee - I first learned about him when he participated in the Little Rock marathon with Iowa's former Governor, Tom Vilsack.  And he hasn't stopped running since.  The time he has spent in Iowa has been worthwhile as he has thrust himself toward the top of the polls.  His down home fits well with Iowa voters.  His race with Mitt Romney has turned ugly at times but Huckabee has done more to help himself than any other candidate in Iowa.  See video here.

John McCain - Des Moines Register endorsement was a big shot in the arm for a campaign that seemed on life support a few months ago.  Iowa and McCain have never truly loved one another perhaps in part because his opposition against ethanol subsidies.  (I doubt he liked our indoor rain forest either).  McCain appeals to Independents and Democrats and could be a tough contender if he were actually to get the nomination.  His experience and public service are second to none.  See video here.

Ron Paul - Probably has the most vocal and ardent supporters of any candidate.  He is not just in favor of smaller government - he is anti-government.  One supporter I know has decided to caucus for the first time to support Ron Paul.  Paul opposed the Iraq war from the start and wants to end the IRS.  Has enjoyed an incredible fund raising effort over the Internet.  See video here.

Mitt Romney -  Earned front runner status in Iowa early.  Incredibly successful in business and managed to turn around the Olympics.  Recently has been dogged by changing positions on social issues.  His speech on his religion did not seem to be particuarly helpful.  Has spent a ton of time in Iowa and second place finish to Huckabee could spell trouble for his campaign.  See video here.

Fred Thompson - entered race later than other contenders.  Conservative and a former actor.  (Sound like anyone else?)  Believes in limited federal government, strong local government and low taxes.  Just doesn't seem to have picked up steam in Iowa.  See video here

 

 

Iowa Caucus Countdown: The Democrats

Yesterday I received five phone calls and four knocks at the door from several campaigns that are pulling out all the stops to win the Iowa caucus.  With the caucus coming up this Thursday, January 3rd, I wanted to highlight all the major candidates with some video footage of speeches.  Today I will feature the Democrats and tomorrow I will feature the Republicans.  I have added a little bit of commentary on what I observe in my own neighborhood but I am not endorsing any particular candidate. 

Joe Biden - Not considered by many to have a chance but has picked up some key endorsements in my neighborhood - including some republicans.  His affinity for foreign affairs and experience are his biggest assets. View video here.

Hillary Clinton - Either you love her or you don't.  Some in my neighborhood are concerned about her electability in a general election.  If nominated, will it just drudge up the same old issues that haunted Bill Clinton's presidency?  She has tremendous political skills and has some major political endorsements in Iowa.  Leading national polls but Iowa is more of a struggle.  Still running neck and neck with Edwards and Obama.  View video here.

Chris Dodd - His daughter spent the last couple of months in my son's kindergarten class.  An extremely personable and likeable guy.  (I doubt Connecticut voters appreciated the move to Iowa but I admire someone that puts his family first).  Long on experience (33 years in Washington) but short on momentum.  Worked to enact Family and Medical Leave Act.  A class act.  View video here.

John Edwards - probably has the most momentum right now of any democratic candidate.  Spoke to a huge crowd at East High School the other night.  While the polls are extremely close he appears to be gaining and moved ahead in certain polls.  Populist message appears to be resonating with Iowa voters.  Needs a victory in Iowa to continue on.  Those I talk with doubt that second place will be good enough this time.  View video here.

Barack Obama - Has given two of the best speeches of any candidate during the entire campaign.  His inspirational message of hope and change makes him a force to be reckoned with in the caucus.  Position that he was against Iraq war from the beginning sets him a part from the other candidates.  In a virtual tie with Edwards and Clinton for the lead.  Very charismatic.  View video here.

Bill Richardson - A substantial resume and a charming person.  I am not hearing a lot about him.  Vows to bring troops home now. A finish behind Biden or Dodd could spell doom for this campaign.  View video here.

Tomorrow:  The Republicans.

I List Expanded

Mike Sansone and Drew McLellan have developed the I List - a list that showcases the power of blogs in Iowa.  While Mike did a great job of compiling the list, some notable Iowa law blogs are missing from the list including Jennifer Jaskolka-Brown's family law blog, George Davision's Law Blog, Bill Grell of Huber Book & Cortese,  The Yin Blog  and our own Sullivan & Ward Iowa Law Blog

Our law firm has continued to recognize the power of blogs and we now have as many active blogs as any other law firm in the state including Rush on Business, Jennifer's blog, and the Iowa Law Blog.  On our Iowa law blog we have had six different lawyers who have posted on topics ranging from employment law to OSHA regulations.  Matt Gardner also had his own Wealth and Estate Planning Blog but now has turned his efforts toward developing our law firm blog.

So here is my list with those law blogs added.

Adam Carroll
Andy Drish
Art Dinkin, CFP, CLU, ChFC
Association of Business & Industry
Babich, Goldman, Cashatt & Renzo
Barry Pace
BeatCanvas

Bill Grell
Blue Frog Arts
Brett Trout
Bridges Financial
Broom Wizards
C Wenger Group
Carpe Factum
Claire Celsi
Cloud Nine Diamonds
Compass Financial Services
Conference Calls Unlimited
ConverStations
Dave Dreeszen
Des Moines Families
Dickinson, Mackaman, Tyler & Hagen
DMWebLife
Do You Q?
Dr U Fantasy Football
DSM Buzz
Dwebware
Employer Ease
Eric Peterson
Focal Point Multimedia

George Davison
Gift Idea Help
Home Know-it-All
Insight Advertising & Marketing
Iowa Bed & Breakfast Association
Iowa Biz
J. Erik Potter
Jann Freed

Jennifer Jaskolka-Brown
Josh More
Kyle's Cove
Maiers Educational Services
McKee, Vorhees & Sease
McLellan Marketing Group
NCMIC Insurance
Purple Wren
Radio Iowa
REL Productions
Rental Metrics
Rita Perea Consulting
Roth & Company
RSM McGladrey
Ruby's Pub
Runners' Lounge
Rush Nigut
Ryan Rossinick
Simplifive
Snap! Creative Works
Studio 24 Design

Sullivan & Ward's Iowa Law Blog
Swing Station
The Members Group
The Mitchell Group
The Simple Dollar

The Yin Blog
Transition Capital Management
US Rodeo Supply
Victoria Herring
Wade Den Hartog
Wealth With Mortgage
When Words Matter
White Rabbit Group

So don't just copy this list.  Add to it.  I am sure there are more hard working Iowa bloggers that deserve recognition and credit.  Let me know of any you would like to add.

Iowa Caucus Issue: What about Small Business?

The Iowa Caucus is approaching quickly.  If you attend campaign rallies for the candidates or listen to TV ads you will almost never hear anything about small business. 

But in reality, America's small businesses are the driver of our economy.  Consider these facts from the Small Business Administration (SBA) as outlined in February 2006:

10. Small businesses make up 99.7 percent of all United States employers.

9. Small businesses create more than 50 percent of the American nonfarm private gross domestic product (GDP).

8. Small patenting firms produce 13 to 14 times more patents per employee than large patenting firms.

7. The more than 24 million small businesses in the United States are located in every community and neighborhood.

6. Small businesses employ 50.1 percent of the United States’s non-farm private sector workers.

5. Home-based businesses account for 53 percent of all small businesses.

4. Small businesses are 97 percent of America’s exporters and produce 26 percent of all export value.

3. United States saw an estimated 580,865 new small firms with employees start-up in the last year measured.

2. There are approximately 4,115,900 minority-owned businesses and 6,492,795 women-owned businesses in the United States, and almost all of them are small businesses.

1. The latest figures show that small business creates 65 percent or more of America’s net new jobs.

I encourage you to find out where the candidates stand on America's small business issues.  It's an issue vital to our economy.  You are unlikely to find an express position regarding small business on any of the major candidates' Web sites, so you will need to ask them.  Seriously, can anyone tell me where their candidates stands on SPECIFIC small business issues? 

 

Iowa Caucus Not for the Night Shift?

A Des Moines Register article discusses how many bosses are unwilling to allow night shift workers to caucus.  Understandably this makes politically active employees a little upset.  The article quotes a Medicom employee who said,

"It made me so furious. I raised such a fit I'm surprised they didn't send me home."

It's true that Iowa law does not require employers to give employees time off so they can caucus.  But as I have pointed out before it is my view that treating employees with respect is one of the best ways to avoid employee lawsuits.  An employer should ask themselves whether a few hours away from work every four years would really hurt production?  But think of the goodwill that could occur by respecting the employees' desire to participate in the political process.  Do you think you might have more committed and loyal employees?

At least the Des Moines Police Department gets it because police officers working on the night shift will have the opportunity to caucus provided they have made the request in advance and calls for service allow them to do it.

Update:  The Des Moines Register reported in its Sunday edition that the Medicom worker described above will now be allowed to participate in the caucus. 

Legal Checklist for Starting a Business in Iowa

American_dream With 2008 fast approaching perhaps you are considering the pursuit of the American Dream to own your own business.  But where do you start?  Here are some helpful legal tips to consider before you start your Iowa business:

1. Find out the availability of your proposed business name. You can do a quick search on the Iowa Secretary of State Web site to see whether your name is available. If the name is available you may want to reserve the name through the Secretary of State but you are not required to do so before forming your business entity. You may also want to consider whether any company outside Iowa has your business name. You can conduct a free search on the U.S. Patent and Trademark Office or use a paid service to research trademarks nationwide. It is also a good idea to check whether someone has your proposed Internet domain name.  An intellectual property attorney could also be very helpful in this process.

2. Pick a Place to Incorporate or Form a Limited Liability Company (LLC). I am sometimes asked whether an Iowa company should incorporate or form an LLC in another state such as Delaware or Nevada. In general, an Iowa small business is probably better off incorporating or forming an LLC here in Iowa. The filing fees are low and the ongoing fees for registering the business in Iowa are among the lowest in the country. (Only $30.00 every two years if you file your biennial report online).

3. Choose the Shareholders and Directors. If you are forming a corporation who will be the shareholders in the company?  If it's an LLC, who are the members? These are the owners of the company.  Determine how much capital you will need. Do you have enough capital or access to capital in order to start the business on your own? If not you may need to consider other investors.

In most cases the shareholders of the small business are also the directors. Do you want outside directors? There may be good reasons to have outside directors but think this over carefully before you elect to do so.  Electing outside directors may limit your control over the business.

3. Create your Articles of Incorporation or Organization. The articles of incorporation (corp) or organization (LLC) act as a charter to start your new business in Iowa. The filing fee with the Secretary of State is currently $50.00. It is generally a good idea to have an Iowa business lawyer prepare your Articles of Incorporation or Organization and other corporate documents.

4. Prepare corporate bylaws or operating agreement. The bylaws (corp) or operating agreement (LLC) set out the operating standards and procedures the business company will follow.

5.Create meeting minutes, resolutions and agreements. It is a good idea to document the initial meeting minutes of the company including the meetings of the shareholders and directors or the members. At this time, you will elect the officers of the company including the president, vice-president, secretary and treasurer. You will also issue stock (corp) or membership (LLC) certificates at this stage. If you have multiple shareholders or members you will also likely need a buy-sell agreement.

6. Obtain your employer identification number (EIN). Your corporation or LLC will need to obtain an employer identification number from the IRS. This can be done through a convenient online application process.

7. Elect your tax status.  There are several different options for how your corporation or LLC could be taxed.  Make sure to talk with both your accountant and lawyer about which form of business entity is the most advantageous for your situation.

8. Open a bank account. You will typically need the EIN and a banking resolution in order to do this.

9. Obtain any licenses and permits. You will need to check the federal, state and local regulations to determine whether you need and licenses or permits to operate your business.

10. Follow the corporate formalties of running a business. In Iowa, this includes registering your business every two years with the Secretary of State's office. You also need to do corporate minutes at least on an annual basis including the election of officers and directors. Sign all documentation using your title as a corporate officer. You will also want to minimize or avoid situations where limited liability is not an absolute.

For more information on setting up an Iowa corporation or LLC please visit my small business formation page. 

photo on flickr by MargaretFun.

Humor in the Workplace is a Gamble

An Iowa man who worked with Catfish Bend Casinos in Burlington was fired for posting a Dilbert cartoon on the office bulletin board.  Apparently the boss didn't appreciate the comparison to a drunken lemur.

Dilbert creater, Scott Adams, offers this advice:

If you intend to mock your boss with Dilbert comics, the trick is in knowing which comics to pick. Apparently there is a fine line between posting a comic that criticizes a particular policy decision, versus a comic that calls your boss an inebriated prosimian. (Thank you, Wikipedia.) 

It's important to remember that humor is in the eye of the beholder.   If humor is used too much or at the wrong time in the workplace bad things can happen.  A hostile work environment occurs when jokes, suggestive remarks, pictures, cartoons, or sexually, discriminatory or otherwise derogatory comments alter the circumstances of the workplace.

On the other hand, humor in the workplace is important to job satisfaction.  I really can't imagine working in a place without some humor here and there.  But at the very least it's best to still maintain professionalism and have a good sense of how people will react to your humor.  Calling your boss a drunken lemur?   Even Adams agrees that one was a little more cutting than the typical Dilbert strip.  In an interview with the Register reporter he said, "I can see how this one may have been a tad bit over the line."

Edwards Campaigns with Most Famous Client Before Iowa Caucus

Abe Lincoln, Freedom Fighter (1978)
Abe: I don't know about this politician business.
Judge: What do you mean by that?
Abe: If I have to sacrifice my integrity for politics, I guess I'll just have to stay a lawyer!
 

Up to this point I have avoided blogging on politics and the Iowa caucus.  It's a no win situation for me.  I have clients on both sides of the aisle and a policy not to debate politics with clients has served me well.    Besides, Iowa lawyers like Gordon Fischer and Ted Sporer do a tremendous job of covering politics with their blogs so I'll leave the debate to the experts.

But one campaign strategy surprised me.  Many of the candidates are lawyers.  But as Joe Kristan recently pointed out, lawyers are not exactly the apple of the public's eye.  It's probably part of the reason why lawyer candidates tend to rarely emphasize their legal careers.  But one candidate has decided to go against the grain.  Trial lawyer extraordinaire John Edwards is campaigning in Iowa today with his most famous client.

As detailed in his book, Four Trials, Edwards obtained a $25 million judgment on behalf of Valerie Lakey and her parents.  Valerie nearly lost her life when she was disemboweled by a swimming pool drain that was incorrectly attached.  He has sent out mailings featuring the Lakeys and is now campaigning with them.  He also unabashedly points to his career as a trial lawyer as an example of how he will stand up and fight against corporate and special interests.    It's a bold but risky move given the public opinion of trial lawyers in particular.  But I am proud of Edwards for not shying away from his tremendous career as a lawyer. 

While the image of lawyers could be improved, it should start with lawyers being proud of the profession they have chosen.  We offer society a valuable and important service.  My thanks goes to lawyers like Edwards who aren't afraid to talk about it.   

Photo on flickr by alexdecarvalho  

  

Central Iowa Blogga Nostra Grows in Popularity

There is a nice article in the Business Record by Amanda Ripp this week about the Central Iowa Blogga Nostra gaining momentum and growing in popularity.  I am continually impressed with the quality of individuals and business people who are blogging in Central Iowa.  The article features several quotes from members of the Blogga Nostra extolling the benefits of business blogging: 

Mike Sansone (Blogging and social media coach): "The reach (of blogging) extends beyond borders; it brings money and business into Iowa."   "In the old days, it took a phone book and a chamber of commerce to extend your business to another city," Sansone said. Blogga Nostra members are extending their businesses through more high-tech means with their blogs.

Angela Maiers (Independent education consultant):  "I have seen a difference, not just with blogging, but being on the Web," Maiers said. "It has helped me to build connections with businesses and other educators, and helped me to prepare students for the 21st century. There are powerful people with powerful ideas outside of the classroom and I have made those connections through blogging."

Timothy Johnson (Chief Accomplishment Officer of Carpe Factum and professor at Drake University):  Timothy met his favorite author, Steve Faber, through blogging.  "A couple of months after I began blogging, I got an e-mail from Steve, out of the blue, complimenting me on my writing," Johnson said. After making the connection, Faber spoke to one of Johnson's classes.

Mike Wagner (branding consultant):  "When there are possible business opportunities, you are able to sustain those relationships," Wagner said. "You have a shot to do business with people. Typically you hand a business card to someone and they throw it away. Give them a brochure, maybe they read it and then they throw it away. With blogging you can keep up the conversation. You keep business growing and react to consumers through an interactive piece."

Brett Trout (Iowa patent and intellectual property attorney):  If a blog is linked to a more popular or higher-traffic blog, it will be easier for search engines to find the site, increasing the blogger's popularity, Trout said, "This is huge to Google."

Andy Brudtkuhl (Web developer with Simplifive):  "The diversity of the group makes for different readership; it allows us to cross audiences," said Brudtkuhl,

and even this Iowa business attorney:  "You link out to other people, or mention them on a post; it is a reciprocal effect," . "They write about you, and then someone else writes about that [post].  That's how it grows."  "The cost is minimal, Bloggers can spend anywhere from nothing to a couple hundred dollars per month. Web sites can cost thousands of dollars to maintain."

So what are you waiting for?  Join us at the Panera U in West Des Moines the first Friday of every month.  It's a great opportunity to meet new friends and gain business contacts.

P.S. Thanks to fellow Central Iowa Blogger, Doug Mitchell, for lunch today.  Doug is a perfect example of someone that has gained contacts through the Central Iowa blogging community and is now using those contacts to build a business.

Knicks' Sexual Harassment Case Provides Good Lessons

The New York Knicks sexual harassment case provides some great lessons on employment law.  Previously I touched on the Knicks case in explaining how companies could avoid sexual harassment claims.  Now the case has been settled and there are additional lessons to learn.

Frank Steinberg of the New Jersey Employment Law Blog explains the importance of "fee-shifting" in employment law discrimination cases.  In these cases the loser pays the attorneys' fees of the other side.  This places a great deal of pressure on the defendants to consider settlement.  As Frank said,

It is quite possible that, depending on the cases, the fees could be greater than the damages awarded to the plaintiff.  Thus, a realistic evaluation of the likelihood of complete success should always be a part of the defense strategy and should be evaluated on a continuing basis. 

You should always consider business strategies for litigation.  I encourage you to approach litigation dispassionately and consider the best business approach to ending your dispute.  Sometimes the best business approach means litigation is necessary but only after you have carefully evaluated all aspects of your case to determine how to prevail, or at the very least, extract yourself from the litigation under the most favorable settlement terms.

Or, if you got your brains beat in like the Knicks did settlement is never a bad option.

 

Accountants are Like . . . I Guess Like Accountants

There's no business like show business, but there are several businesses like accountingDavid Letterman.

Joe Kristan shows he is really in the holiday spirit over on the Roth & Company Tax Update blog when he followed up on tax professor James Maule's post that every profession has its good and bad.  I know a lot of people don't like lawyers but weasels AND black widow spiders

Of course Joe proves there is no accounting for taste. 

 

How to Avoid the Business Divorce

Baseball's Day of Infamy

The Mitchell Report was released on December 13, 2007.  For baseball, it's just another black mark on an era now known as the "Steriod Era". 

But what was accomplished by the report?  Did we really need the report to determine steriod use was (and apparently still is) widespread in major league baseball? 

The report outed many of the big names in the sport but the reality is much of the report would not hold up in a court of law.  Many of the allegations are based upon hearsay and shaky evidence.  Besides it's incomplete.  Those mentioned weren't the only ones who allegedly took performance enhancing drugs in major league baseball.  Is it fair to name names under these circumstances?  

I find the hypocrisy in all of this amazing.   MLB glorified the pursuit of the single season home run mark and fans returned in droves to stadiums across the country. (Recall that baseball was practically dead before Sosa and McGwire did their magic due to the strike in 1994-95).  Selig apparently called the Mitchell report "a call to action".  Sorry Commissioner, but the call to action rang a few years ago.

I also find it particularly interesting that Rafael Palmeiro testified under oath before Congress that he did not take steriods - shortly before he tested positive for steroid use. Was he prosecuted? No. In fact, the President of the United States (and former Texas Rangers owner while Palmeiro played there) supported his friend 100 percent. Bush reaffirmed his belief that Palmeiro did not take steriods even after a positive test!

Barry Bonds?  Indicted despite no positive tests.

Mitchell says everyone should concentrate on his recommendations rather than focus on the names.  Unfortunately he knows that is not possible and it is disingenuous to indicate otherwise.  And if he truly recommends a full pardon for all included in the report why name names.  Ultimately I think the Mitchell report just excentuates major league baseball's mishandling of this whole situation.  This report just hurts baseball.  And I know others agree.

MLB should keep in mind this quote from Yogi Berra,  "If the fans don't come to the ball park, you can't stop them."  The fans deserve better than this report offers.  Stop with the mud slinging and solve the problem.  The report wasn't necessary in the process.  We all know the problem.  It's up to the commissioner and the players' union to do something about it.

 photo on flickr by jason michael.

 

 

 

How to Make Your Presentations a Little Better

I am attending the Iowa State Bar Association's eCommerce seminar tomorrow.  The man formerly known as the sixth best law blogger in the world is one of the presenters.  I am looking forward to Brett's talk as he shares his Vegas Blogworld speech with the audience.

It got me thinking a little bit about how to improve presentations.  Recently I have been to a rash of presentations where the speakers throw up their power point and then talk directly to the screen rather than the audience.  It's unbelievably annoying.  It's death by power point.

The best presenters I know are terrific storytellers.  The best speech I have heard over the past year came from Charlie Anderson who delivered a terrific story about his company at a SEMEE event earlier this year.  He was the only presenter that evening who talked without a power point.  His passion was evident.  No slides were necessary.

For great advice on making the right presentation be sure to check out how I made my presentations little better.  This comment about slides from the post is particularly insightful:

Let the slide serve your message, rather than letting you (and your personality and timing) be governed by the slide. 

Thanks to Matthew Homann's [non]billable hour for the link to the presentation post.

 

Year-End Tax Planning Ideas for Your Business

Iowa accountant Joe Kristan of Roth and Company shares some year-end tax planning ideas over on IowaBiz.com

It's a good idea to visit your accountant now (if you haven't already) to determine if there is anything you can do to improve your position come April. 

Iowa Franchisors Picking Up Steam?

Iowa has never been the hot bed for franchisors but it seems as though some Iowa franchisors are really picking up steam.  According to the Des Moines Register this morning Chocolaterie Stam stores have expanded to Ames, Chapel Hill N.C., and Wauwatosa, Wisconsin.  Upcoming stores including Minneapolis and Steamboat Springs (that would be my personal favorite) and also is contemplating stores in Kansas City or West Des Moines.

Another expanding local franchise is Maid-Rite.  It is my understanding Maid-Rite is growing rapidly with plans to head into Florida and Texas and with the new store design it's easy to see why.  This definitely is not your father's Maid-Rite.

But if you are considering these franchises be sure to conduct your due diligence and consider the fundamentals for franchisees in your negotiations.  Don't fall in love with the deal.  (I know it's tough with chocolate but control yourself). 

Rooftop Foundation Spreads Cheer This Weekend

The Rooftop Foundation is holding its annual shopping tour for the kids at the Moulton Elementary School this Saturday.  The Rooftop Foundation is a 501(c)(3) non-profit organization created by Ken and Esta Deever of Deever Roofing. 

Every year the Deevers (and 60 volunteers) load up two bus loads of children and arrange to take the children shopping for their families.  The children are not permitted to buy gifts for themselves as we try to teach the philosophy "it is better to give than receive".   Along the way we manage to stop at McDonald's for breakfast and the children also receive a surprise gift bag of their own after wrapping gifts for their families. 

In addition to the elementary children, our Santa has made it a priority to help spread Christmas cheer at the Young Women's Resource Center and to children in cancer treatment at Blank Children's Hospital in Des Moines.

It is an honor and a privilege to be a part of such a great organization.  One hundred percent of all donations go to benefit the children.  I am also excited because we have a new Web site coming very soon by Sandy Renshaw of Purple Wren.

Happy holidays!

Guest Blogger: Mike Colwell of BIZ on Business Mentoring - Lessons Learned!

Looking back on the first year of work at the Business Innovation Zone (BIZ), I have met with over 60 potential clients ranging across a wide variety of business areas.  I have learned much on this path. First and foremost, I have learned to never prejudge an idea. I must say that some of the most "unique" sounding ideas described in an initial phone call or meeting have turned out to have the most merit. The entrepreneurs in this area have a tremendous amount of creativity and several have identified truly unique market niches that have not been exploited to date. Along with those great ideas, I have met with many whose ideas I found lacking. Asking hard questions has become a well worn path for me. In many cases the idea has not been thought through from a business perspective. The euphoria of the "perfect product" has overshadowed the realities of a profitable venture. I often find myself asking potential clients questions about the running of their prospective business. For many, it is a rude awakening as they come to understand the immense hardship and stress that will come with starting a venture.

I am often asked what advice I have for would-be or current entrepreneurs. Here are my thoughts for those starting out:

  • Seek out many opinions on your idea. Do not just "go with your gut".
  • Spend time up front on a business plan, but only to the point that you frame your path and plan. Business plans evolve rapidly when you are forming a business, rarely surviving the first customer engagement.
  • Know your exit points. It is easy to look out and say "I will sell my business for $xxx,xxx,xxx". It is much harder to say, "I am only going to invest $xxx,xxx" or a certain amount of time. Treat your venture as an investment and know when to exit as the event arrives.
  • Take a balanced approach to your idea and business. Do not ignore important areas for lack of knowledge or assume that "I will figure it out when I get there".
  • Relationships matter. No matter how automated or high tech things get, the relationships you build will support your company and conversely the lack of relationships will guarantee its failure.
  • Learn to sell. Selling is ABSOLUTELY CRITICAL to your initial success. Hiring a salesperson is not the answer in the initial phases of a startup. You the entrepreneur must be prepared to get out and sell your idea, your product, your service, and yourself.
  • Finally, spend a substantial amount of time understanding the cash flow of your business. For most businesses, the lack of cash flow management is the single greatest failure point.

 

From Rush:  BIZ is a community sponsored non-profit business accelerator designed to provide economic growth in Central Iowa through the development and expansion of entrepreneurial enterprise.  Particularly if you have a business in Central Iowa that is poised to grow regionally, nationally or globally, I encourage you to contact Mike

photo on flickr by aloshbennett

LLCs Are Not Always Better Than S Corps

I have seen many articles on the Internet which state that you absolutely need to form a limited liability company (LLC) if you are a small business owner.  The S corporation, once the darling of small business entities, must now feel like the red-headed step child.

But as New York attorney Derek Underwood points out LLCs are not always a good fit for the small business owner.  You may be able to save on self-employment taxes by using an S corp instead of an LLC.  But as Iowa accountant Joe Kristan cautions you need to be careful when you set your "reasonable" salary.  Joe says the issue is given greater scrutiny by IRS auditors these days.  It's important to get advice from an accountant and/or business attorney on the issue when you make the decision about which business entity to choose.

Please note:  In Derek's post he mentions that an S corporation is usually less expensive to form than an LLC.  In New York the filing fees for an LLC are considerably more than an S corp.  However, in Iowa the filing fee for LLCs and S corps is currently $50.00.

 

photo on flickr by digitalclickclick

Claims Deadline in Microsoft-Iowa Case Fast Approaching

The deadline for filing claims in the Microsoft Iowa Class Action Settlement is December 14, 2007.  If you have any questions about how to file a claim be sure to email the claims administrator at claimsadmin@iowamicrosoftcase.com.

For a recap of articles on the Microsoft Iowa case click here which includes one of my most popular blog posts entitled On the Seventh Day She Rested.

Ain't No Man Alive Worth $50.00 Per Hour

In the last blog post I picked on college football coaches and their exorborant salaries.  But its probably not fair to pick on college coaches alone.

The Philadelphia Litigation Blog discusses how lawyers at large Manhattan firms are now charging $1,000 per hour or more.  Superstar litigator, David Boies, sums it up pretty well:

Frankly, it's a little hard to think about anyone who doesn't save lives being worth this much money . . .

All of this reminded me of a great story from John Ward the managing shareholder of our firm.  Sullivan & Ward has represented many of the rural electric cooperatives in Iowa for decades.  At some point many years ago a decision was made to raise hourly rates to $50.00 per hour.  When John discussed this rate increase with a client one of the board members proclaimed:

Ain't no man alive worth $50.00 per hour!

And while I don't advocate returning to the days of charging $50.00 per hour, I agree with the discussion on the Philadelphia Litigation Blog regarding flat fees in a case or deal.  In many instances billing in this manner promotes greater efficiency than billing by the hour.  In late 2006  I decided I would start charging on a flat fee basis for litigation in addition to my work for incorporating businesses, forming LLCs or monthly outside general counsel services.    I have not moved exclusively to flat fees.  I find some clients still prefer the billable hour but I am always open to alternative billing arrangements. 

I know others agree with moving away from the billable hour including lawyer and author Scott Turow who believes the billable hour must die.  For me I like flat fees and alternative billing arrangement for two reasons:

  1. The businesses I represent can better budget and allocate for legal fees.  Business clients seem to appreciate that.
  2. I have experienced greater satisfaction in my work.  Living by a clock is no fun in my opinion.

Pigs Get Fat but Hogs Get Slaughtered

One couldn't help but notice the carnage at the end of college football's regular season.  Coaches everywhere were fired or forced out.  Some of those coaches even had winning records.  Even the coach at my Division III alma mater didn't survive the past few seasons of mediocrity.  

Are college football fans just nuts or have these coaches created the monster of expectations by earning as much as $5 million dollars per year?  With that kind of money "It's just win, baby" and that means nothing short of championships and New Year's Day bowls.

But then a revelation.  The Supreme Court of Pennsylvania ruled that Joe Paterno's salary must be revealed to the public for the first time.  Speculation had put his salary at more than $1 million a year (which would have still been a deal in the present coaching market).   Paterno has been the head coach at Penn State for 42 years.  That tenure includes national championships, numerous top ten seasons and has made him one of the winningest coaches ever in Division I college football history. 

So his salary?  Drumroll please . . . $512,664.

Still a substantial sum of money but nothing approaching the dizzying sums of money that several other college coaches make including Iowa's very own Kirk Ferentz

Is there a lesson somewhere here? 

 

photo of Paterno statute on flickr by audreyjm529