Twice a month I blog for IowaBiz which was acquired by the Des Moines Business Record this summer.  Since that time it appears the bloggers have stepped up their game.  The posts have been informative and entertaining.  I encourage you to take a look.

My post today for IowaBiz centers on the trend of hiring outside law firms on a non-billable hour basis.  It’s a trend I embrace and use frequently in my law practice.  Similar to the law firms mentioned in my post, I have already provided outside general counsel services to certain business clients based upon a mutually agreeable fixed monthly fee.  These clients receive a fixed monthly bill and do not receive bills for phone calls and overhead costs such as copying and postage.  I also have performed certain projects such as incorporation and LLC formation on a fixed rate and have also done so with contract review and writing.  No, I have not completely eliminated the billable hour from my practice but would love to do so.

Great post from Susan Reid on the Small Business Trends Web site on the 15 Ways the Olympics Exemplify Success for Small Business Owners.  In the comments of Reid’s post, Anita Campbell has some terrific words about West Des Moines, Iowa’s very own Shawn Johnson.  Johnson definitely made us all proud with her amazing attitude and fantastic performance.

But I’ll add one to Reid’s list:

Be Honest.  Although you may initially capture the gold it certainly won’t be worth the consequences if you are caught being dishonest.  It includes your dealings with the IRS, customers, suppliers, employees and business partners.  The dishonest small business owner will likely get sued, or worse, end up being prosecuted.  And with the Internet it is very hard to keep your reputation quiet.

photo of Shawn Johnson in butter at the Iowa State Fair on Flickr by Iowaarcheryboy.

 

 

I will be speaking at the Midwest Entrepreneur and Small Business Conference scheduled for September 12 & 13 at the Jordan Creek Marriott in West Des Moines.

I encourage you to check out the preliminary presenters’ list for this first of its kind conference in our community.  Hope you will consider attending.

Gavin Craig in his new Twin Cities Business Litigation Blog has an excellent post on the importance of making sure the world knows you have a corporate entity.  Craig is convinced that many small business owners (especially contractors) do not know how to properly operate a corporation or LLC. Craig says,

When a person incorporates their business, it takes more than just filing a form with the Secretary of State. When a business is incorporated, it can’t be a secret to those that do business with the new corporation. In other words, the new corporation needs to disclose the fact that the business (the party that is contracting with others) is incorporated on its letterhead, business cards, invoices and checks.

Craig is right on with his warning on this issue.  Whether you live in Minnesota, Iowa or Timbuktu, you must make sure you disclose the fact you have a corporate entity on your letterhead, business cards, invoices, checks and especially CONTRACTS. 

This is a particularly important message for franchisees.  Many franchisees operate under franchise trade name but fail to disclose in contracts, letterhead, business cards, etc. the name of their actual corporate entity.  One franchisee I know was personally sued for the damages related to an advertising contract because he had not disclosed to the other side that he actually operated with an LLC rather than as a sole proprietorship.  He had signed the contract using only the trade name of the franchise.  The other side said at trial that it didn’t know the franchisee had an LLC.  So ultimately the judge sided with the advertising company.  It was an expensive lesson that could have been easily avoided. 

 

The Wall Street Journal’s ‘Stories from Around the Web’ featured my recent post on The Real Reason the Packers Traded Favre.  It’s the second time in the past few months that Rush on Business has been featured on the WSJ online site. 

Another fun thing is my post on Favre was up on the computer at the Iowa State Fair in the Mediacom booth last Saturday.  I didn’t make it in butter but fun nonetheless.

After reading a post from Ohio business lawyer Terri Rasmussen I wrote a post for IowaBiz asking whether Iowa will need a "business" court to compete?

In response I received an email from the Co-Chair of the ABA’s Subcommittee on Business Courts, Lee Applebaum, who was kind enough to provide me more information on the recent developments in business and technology courts.  At this point Iowa is not included in the states that have established business and technology courts.

Business people often express frustration with our court system but Iowa courts do rank high in polls when it comes to judical fairness.  What you think?  Should Iowa should establish or experiment with a business court?

photo on flickr by Greg Westfall

The Ohio Employer’s Law Blog earns a gold medal with its Olympic-themed Blawg Review #172.  Jon Hyman’s review has some great blog posts from lawyers across the country,  both in and outside of employment law.  Be sure to read it.

Thanks to Jon for including my post on the real reason the Packers traded Brett Favre.   

photo on flickr by Marc van der Chijs

"How could the Packers trade him?"

"What were the Packers thinking?"

"I just don’t understand it?"

I am writing to shed some light on this decision.  Favre turns 39 in October.  That means next year Favre would have entered a protected class for the purposes of age discrimination when he turned 40.  Sure, Favre may have had a decent season with the Packers this coming year (although he most assuredly will not for the Jets), but what about the following year?  Seriously, how many years does this guy have left?  Eventually he would have been benched in favor of a younger quarterback.

So Aaron Rodgers (age 24) steps into the role of starting quarterback now.  Rodgers may be untested but it makes perfect sense.  Trade Favre now and avoid the unpleasantness of an age discrimination claim by the all-time passing leader later.

So quit blaming the Packers’ president or general manager for this fiasco.  Everybody knows the lawyer is to blame.  

photo on flickr by *Jame*

 

     

Many people dream about owning their own business.  More and more people are choosing franchising as the avenue to to pursue these dreams.

The Federal Trade Commission (FTC) has excellent information in its consumer guide for buying a franchise.  The FTC recommends that BEFORE you invest in or select a franchise you should think about how much money you have to invest, your abilities, and your goals. The guide warns you to "be brutally honest."  Three key areas are listed:

1.  Your Investment – How much do you have to invest?  How much could you afford to lose? Do you need financing? What’s your credit score?  Do you intend to invest with partners? How much do you have in savings?

2.   Your Abilities – Does the franchise require special education, expertise or training?  What skill sets do you bring specifically to this business?

 3.  Your Goals – Do you need a specific annual income?  Do you have interest in a particular field?  Are you interested in retail or service?  How many hours can or will you work?  Do you intend to hire a manager or run the business? Is this a primary source or supplement to income? Do you get bored easy or are you in it for the long run?  Would you like to own multiple locations?

One of the biggest questions to ask yourself in my view is whether you are just buying yourself a job.  If you buy a franchise you should treat it like an investment and expect a return on that investment.  Otherwise, you are most likely better off just looking for employment.  It’s certainly less risky and considerably less stressful. 

In the next post we will examine what it means to "buy yourself a job" and how to avoid that trap.

 

 

Franchisee lawyer Richard Solomon has a passion for spreading the word about conducting pre-investment due diligence.  His latest post on the BlueMauMau site outlines many of the pitfalls experienced by franchisees in various industries.  It also discusses the fact that a mere review of the franchise disclosure document and franchise agreement is not enough.  On that subject he says,

Every failed franchisee hired some cheap lawyer to “read the contract”.  When you add up what you are risking, you will appreciate that a few hundred dollars for an incompetent review of documents by someone who doesn’t know where else to look for what needs to be considered is really stupid. You can’t afford that approach. But it’s your money and your decision.  

I agree with Richard that due diligence is critically important.  I also agree that prospective franchisees must do more than just read the contract (i.e. Franchise Agreement and Disclosure Document).  Real due diligence will require a multi-disciplined approach.  The prospective franchisee should get a lawyer, accountant, banker, and even a marketing professional into the decision-making process.  If a specific location is key (such as retail or restaurants) you will want a commericial real estate agent also involved.

But above all, the franchisee must become engaged in the process.  Don’t rely on the professionals to do the hard work for you.  You must roll up your sleeves and investigate.  In the next post we will discuss more of the details about how conduct franchise due diligence.