This past month marked the first time in over six years that I had not posted during a month on this blog.

Why?

Life has been a bit busy to say the least. I’ll share.

First, I had the pleasure of coaching a great group of young boys that capped a great run by finishing second in the Iowa State Little League Tourney. Think you want your boys to play in the Little League World Series? You might think twice because essentially you need to give up about a month and a half of your life if you make it that far. As it stood, I spent about three weeks straight with baseball to get the championship game of the state tourney. Still it was an experience I’ll never forget and I am thankful I had the opportunity to do it.

Second, I am a part of a new business venture called Sports Spotlight USA, Inc. which we founded in June. Check out our Web site at www.sportsspotlight.com. Sports Spotlight is a multi-media company covering high school and youth athletics plus all active endeavors. This company is truly a passion for me as it combines two of my favorites, sports and social media. We have a monthly print and digital magazine, a radio program, a Friday night TV program (which cranks up during the football season) and social media through our Web site, Facebook, Twitter, YouTube and Pinterest, channels. I am blessed to have a great staff that runs the day-to-day operations. We currently cover primarily Iowa right now but we have plan to grow the business regionally and nationally. Please follow us if you’re a sports fan (or even if you’re not)!

With all that on my plate I will no longer be active with NotifyWorks. NotifyWorks was my first true entrepreneurial venture. Like I’ve seen through the years with the many business owners that I represent, I learned a whole host of lessons from that experience. It sure isn’t easy getting a product off the ground and I have an appreciation for anyone who has the courage to design a product and launch it to the public. Particularly if you are bootstrapping the business. I still believe in NotifyWorks as a product and I continue to use it with my clients. The company is heading in a new direction so the timing was right for me to step aside. A big thanks to my partners, Mike Colwell and Brian Hemesath, for all their help in that endeavor. 

Finally, I plan to get back to legal blogging here very soon and I’ll continue to provide timely updates on issues relating to business, franchise and employment law. Thank you to all that follow this blog and a special thank you to all my clients! 

 

Yesterday the United States Supreme Court upheld, in a 5-4 decision, the constitutionality of the individual mandate under the Affordable Care Act. I am no expert on the act and I have not had time to closely review the decision. Consequently, I suggest you do what I am doing and go read some of the best coverage on the Web from lawyers around in the country in the Affordable Care Act section of the LexBlog Network. There’s no question we all need to be informed.

If you are interested in reading the entire decision you can find it here.

Please note that Rush on Business is not a political blog and I will not be posting comments that are politically motivated. Any comments analyzing the decision and its potential impact are welcome.

I read an interesting article from Entrepreneur Magazine entitled Back to Civilian Life, Veterans Try Franchises. The article discusses how a former fighter pilot purchased a franchise after retiring from the U.S. Air Force.

A couple of months ago I spoke at the Iowa Veterans Career Retreat. Many of those in attendance were looking at starting their own businesses. None in the audience that day were considering a franchise. However, a franchisecould be a good alternative.

How do you go about choosing the right franchise among the many offerings out there? Good question. My friend Joel Libava a/k/a The Franchise King wrote a book on the subject called Become a Franchise Owner! I recommend the book for any veterans that may be interested in purchasing a franchise.

Some wisdom I’d share is not to get sucked into the notion that franchising is less risky than starting your own business. Franchisees fail at about the same rate as other businesses. Conduct due diligence and carefully formulate a business plan even if you are purchasing a franchise because "they already have the system in place". And it’s also very helpful to be honest with yourself in assessing whether a franchise is right for you.

Finally, evaluate whether you are buying yourself a job. You should purchase a franchise as an investment and expect a return on that investment. Otherwise, veterans (or anyone for that matter) is better off just looking for employment. It’s less risky and a lot less stressful.

Mike Colwell of the BIZ recently wrote an excellent post on IowaBiz titled Partnerships a Guaranteed Divorce. Mike explains in his post that wise business people will always plan for the divorce. The end is inevitable, whether it’s due to death, retirement, disagreement or other reasons.

Mike also linked to my recent seminar on Partnering that I delivered at the BIZ Raising Capital Seminar. It’s long but provides many tips for business people interested in partnering with others. Like a good marriage, communication and planning are the key ingredients for a good partnership.

You can see many helpful business videos from the Raising Capital Seminar in the Post Event video section of the BIZ Website. 

The Boulder Business Advisor has a general overview of the three main types of business structures and the factors that go into making a decision about which entity to choose for your startup business.

It’s important to get tax advice when deciding what entity is best for you. Another critical question, as mentioned in the post by Mike Laszlo, is whether you plan to take venture capital. Generally, you will want a C corporation if you plan to take venture capital. But I’ve worked with a number of organizations that started as a limited liability company (LLC) and then later converted to a C corporation down the road after taking venture capital. I’ve also had organizations that started as an S corporation but later became an LLC for various reasons. Choosing one entity type in the beginning does not necessarily mean you are stuck with that entity type for eternity.

The darling of the business entity formation world right now is the LLC. But see my recent post on the factors of whether the LLC is right for your business.  The LLC is not the right entity choice in all situations. Talk with a business attorney and accountant before making your business entity decision.

 

 

 I was busy reading an article on Why Lawyers Don’t Run Startups (And Why Entrepreneurs Hate Lawyers) when I ran across a terrific lesson learned from the article’s author, Steve Blank. 

In every company that gives you a contract there’s someone who wants a deal. When you run into contract issues, call them first for advice.

In my experience, this is SO true. I’ll often review and negotiate contracts for clients. Often, there are terms that are unacceptable and put the client at considerable risk if they were to give in on the terms. I’ll always ask them to go back to the person who has the most stake at getting the deal done to find out if a compromise can be reached. Hint: It’s rarely the lawyer on the other side of the table who could care less about the deal and cares much more about a brilliantly written contract that forever protects the other side from every possible liability. It doesn’t always work, but more often than not, we are able to move past the stalemate.

As a part of the process, it’s important for business people to communicate their overall strategy to their lawyer. As the article suggests, what are the short term consequences of signing a deal? What can screw you in the long term if you agree to the contract? What contract terms really matter to you? Many lawyers concentrate too hard on protecting their clients from EVERYTHING. When in reality getting a deal done on terms that you can live with should be your priority.

Last December I wrote about how an employee wage misclassification case cost Oracle $35 million. The question about whether an employee is exempt v. non-exempt is often misunderstood by employers. Often, employers want to avoid paying overtime to employees.  So employers will play a game of Russian roulette by paying those workers a salary instead of hourly. 

Have you reviewed your employee wage classifications recently? If not, we recommend that you do so. We have found in our reviews that employers large and small often make mistakes in classifying the wages of their workers. Sometimes even companies with sophisticated HR departments make errors – just ask Oracle. And companies right here in Iowa make mistakes too.

A tremendous resource regarding employee wage classification found on the Department of Labor website at www.dol.gov. There’s great information on the site about the tests used to determine whether employees are exempt or non-exempt . Don’t wait for a lawsuit to review your wage practices. By then, the horse will be out of the barn and you’ll likely find yourself paying a substantial settlement or judgment.

 

 

Over the years I’ve noticed that very few businesses actually plan for selling or passing on their business to employees or family. It’s one of the most important things any business owner can do.

I’ve teamed up with business coach Monte Wyatt to provide a free seminar to business owners on business succession planning. The seminar is Friday, April 13, from 11:30 a.m. to 1:00 p.m. at the Brick Gentry offices located at 6701 Westown Parkway, Suite 100, West Des Moines, IA 50266. We will provide lunch.

If you’d like to come please RSVP by sending an email to rush.nigut@brickgentrylaw.com. Seating is limited to 20 people. We would love to see you there!

 

* This is a guest post from Aaron Hall.  Aaron is a Minnesota business lawyer that handles intellectual property matters. See his information below.

Someone is copying my website. What are my options?

Illegally copying websites is a big problem as the internet grows. Illegal copies of your website may be made by competitors, spammy websites looking for free content, or other businesses who liked what you wrote. If you are the victim of copyright infringement, you have a number of legal rights and options.

Options for Victims of Copyright Infringement

By creating content for your website, you automatically own a copyright in that content. If someone is infringing your copyright by copying your website content without permission, you have the following options.

1. Try to Work it Out Yourself

First, you can try to work it out with them by contacting them and asking them to take down the infringing material. If you feel comfortable with negotiation, this is certainly the cheapest option.

2. Attorney’s Cease and Desist Letter

Second, you can hire a law firm to send a cease and desist letter which serves as a take down notice. That letter can demand that the person take down the infringing material and also pay some sort of fee to settle the matter. For example, you might demand payment of $500 for use up until this point, in addition to the infringing material be immediately removed from the website.

3. Register Your Copyright and Sue

Third, you can register a copyright with the U.S. Copyright office and then sue for copyright infringement. Federal copyright registration is a requirement before initiating a copyright infringement lawsuit in the United States. In general, copyright litigation must be done in federal court. Fortunately, copyright registration is very cheap and you can do it on your own or with the help of an attorney. Then you can contact a law firm to initiate a lawsuit for copyright infringement and seek damages.

The Cost of Protecting Your Rights

One public policy behind copyright law is that you are required to enforce your own rights against those who infringe upon your intellectual property rights. For that reason, your material must at least have certain degree of value in order to justify spending the money on copyright registration and enforcing your legal rights. The courts don’t want to get bogged down with small and nominal copyright claims. However, when the value of your material is significant, the options here provide you with the various routes you can take to protect your copyrighted material. Many business owners view enforcing their intellectual property rights as merely protecting an intangible asset of their company. Intellectual property is an investment, like other assets of your business, which requires protection from thieves who would attempt to steal what your business has built.

Aaron Hall is a business attorney at the Twin Cities Law Firm, LLC in Minneapolis, Minnesota. He represents companies in intellectual property matters including copyright, trademark, and litigation.

 The Business Innovation Zone (BIZ) is holding its annual Raising Capital seminar at StartupCity Des Moines on March 27 starting at 9:00 a.m. Raising capital for your business is complex and often time consuming. This is a great seminar to get you started.

There are several lawyers, accountants and business people presenting including Ben Milne who is the CEO of Dwolla. Ben will be speaking on the "pitch" to investors. That should be very interesting as his company just completed a $5 million raise for venture capital.

I’ll be speaking on partnerships. We’ll talk about the why partnership disputes commonly occur and how to avoid them. It’s not uncommon for partnership disputes to cost in excess of $100,000 for litigation and can often derail a company’s plans for growth and profits.

And while you’re at it, check out this post on the BIZ Blog on Creative Fundraising. It’s a good read.