passion is to help entrepreneurs achieve their dreams and she lives by her own motto: “Grab the world by the pearls, it's yours for the taking!” – by Kelly Bagla, Esq.
She and her husband, Brent, live in San Diego with their four beautiful dogs.
1 5857 Owens Ave, Ste 300Carlsbad, CA 92008Mobile: 760-525-4540Work: 760-784-9109
Introduction
Everything You Need to Know about Your Business Legal Lifecycle®
A smart man makes a mistake, learns from it, and never makes that mistake again. But a wise man finds a smart man and learns from him how to avoid the mistake altogether.
– Roy H. Williams
Whether you play chess or not, the parallels of chess and running a business are clearly evident:
You learn to look ahead
You learn the value of sacrifice
You learn the value of preparation
You learn to anticipate your competitors' moves
You learn to think outside the box
You learn to win
The game of chess is about winning; it's about protecting a prized piece and engaging in war with the opponent who wishes to defeat you. There are differing strategies for both offensive and defensive play, and the wise chess player will have experience with both. Running a business is much the same, protecting something of value, your company, and engaging in war with your competitors who wish to win. The only way a business owner can successfully navigate the many obstacles that face a business is knowing exactly which phase you are in at all times in your business.
Every business has a Business Legal Lifecycle®. As a business owner, this is probably the last thing on your mind, but my legal experience has repeatedly shown that business owners who pay attention to their Business Legal Lifecycle® are usually the successful ones.
From the moment you make the decision to set up your business, you are automatically starting your Business Legal Lifecycle®. By reading this book you will hopefully learn the four phases of the Business Legal Lifecycle® and how to better position yourself for success. Each phase has its own challenges and rewards and knowing that your business has:
a Startup phase
a Growth phase
an Established phase, and
an Exit phase
provides you with a road map as to where your business is at any given time. As your business grows and develops, so do your business goals, objectives, priorities, and strategies. Knowing exactly where you are in your business can be the fine line that makes or breaks your business.
Some businesses start fast, grow fast, and fail or succeed fast. Many businesses start slowly, then build fast, grow faster, buy other companies, or get sold and molded into larger organizations. But every business has its own Business Legal Lifecycle®.
This book is designed to help you determine where you are in your Business Legal Lifecycle®, how to handle the legalities of that phase, and how to move to the next stage. As a business attorney, I have helped many business owners like you move from one stage to the next, and with every stage come new risks and rewards. With every stage also come new legalities to face. This book addresses important questions that entrepreneurs and business owners alike ask every day, which can have huge impacts on the business if not implemented correctly. Educating yourself about your Business Legal Lifecycle® will position you as a better business owner and help you create a successful business.
I have always loved the game of chess. Since playing chess requires the same thinking and strategies as running a business, I decided to use the following pieces to represent the four phases of your Business Legal Lifecycle®, which will help you visualize where you are in your business:
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Startup Phase:The Pawn represents the first barrier of protection. They work hard and are sacrificed. The Startup phase represents the hard work put into starting a company and trying to keep it afloat. |
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Growth Phase:The Rook represents the castle walls, which protect the King, Queen, Bishop, and Knight. The Growth phase represents innovation as owners try to grow their business with unique confidential ideas and personnel. |
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Established Phase:The Knight represents the professional soldier whose job it is to protect those of rank. The Established phase represents your company as being stable and known to consumers as a recognized brand. |
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Exit Phase:The King is the most important piece in the game. If your King is captured, you lose the game. The Exit phase is the most important phase in your Business Legal Lifecycle®, as this is the phase that sets you up for retirement or to start another venture. Without proper planning and money, you can't do either. |
PART II Startup Phase
The critical ingredient is getting off your butt and doing something. It's as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.
– Nolan Bushnell
The Pawn represents the first barrier of protection. They work hard and are sacrificed. The Startup phase represents the hard work put into starting a company and trying to keep it afloat.
CHAPTER 1 What Legal Entity Should I Be?
As a practicing business attorney for 18 years, I have heard it all when it comes to incorporating a business. Many think that incorporating their business will help them cut the federal tax bill or avoid paying state income
