From the December 1998 issue of Startups

Perhaps the most challenging part of starting a small business is covering all your legal bases. "The law increasingly affects every aspect of small-business operation, from relationships with landlords, customers and suppliers to dealings with government agencies over taxes, licenses and zoning," says Fred S. Steingold, an Ann Arbor, Michigan, attorney and the author of Legal Guide for Starting & Running a Small Business (Nolo Press, two volumes for $24.95 each, 800-992-6656 or http://www.nolo.com

The best way to ensure you've got everything covered is to hire an attorney with small-business expertise who can give you advice in these key areas:

  • Business structure. Will you form a sole proprietorship, partnership, corporation or limited liability company? Do you know the advantages and limitations of each?
  • Written documents. Does your lease state who pays for utilities, maintenance and repairs? Do you have an option to renew? Can you sublet? Your leases and other written documents--purchase agreements and employment contracts--should be drafted in clear, precise language and spell out each party's expectations and responsibilities.
  • Co-ownership agreements. What happens if your partner wants out of the business? Do you have a buy-sell agreement to purchase his or her interests? Does it contain a "noncompete" clause so he or she can't open up a similar business down the block?
  • Licenses and ordinances. Does your industry require you to be bonded or insured? Will you need professional or product liability insurance?
  • Employee relations. If you hire independent contractors, do you know how to classify them so you're not penalized by the IRS? Have you prepared an employee handbook outlining your firm's policies and procedures? What about trade secrets you want to protect?
  • Future planning. Have you drafted a will or trust to protect your business assets and your firm's continuity in the event you die or become disabled?

It's not practical, economical or even necessary to contact a lawyer about every business decision you make that could have legal ramifications. "Handle the most routine matters on your own," says Steingold. For example, if you plan to run a homebased business, you can check out zoning laws and land-use restrictions on your own time to ensure your business complies. If a relative wants security for the money he or she is lending you, simply sign a promissory note, available at most stationery stores.

Another option: Sign up for a prepaid legal plan. Often compared to HMOs, these services give you access to a set amount of legal services and consultation time for a monthly fee as low as $20.

Steingold also suggests educating yourself about basic legal issues by studying books and software programs on how to start and run a small business. These resources give you access to dozens of standard legal forms that can be used as the basis for contracts you want your lawyer to draft.

Says Steingold, "You'll be able to make most day-to-day decisions on your own, then seek professional advice only when you truly need it."

Cost And Effect

Want to lower your legal costs without increasing your business's liability? Follow these steps:

  • Discuss fees. Once you've found the right lawyer, ask whether he or she charges an hourly rate or a fixed fee. "If charges are by the hour, set a cap so you know the maximum you'll be spending," suggests Fred S. Steingold, an attorney in Ann Arbor, Michigan.
  • Do some footwork. Keep accurate records, do preliminary research, and write out a draft of any agreement you want your attorney to finalize.
  • Use paralegals. Ask your lawyer about using paralegals for routine legal tasks like researching public records and drafting documents. Their hourly rate could be half what your attorney charges.
  • Educate yourself. Call special-interest publishers Nolo Press (800-955-4775) or PSI Research/The Oasis Press (800-228-2275) to obtain a catalog of legal books and software programs for business owners. Also check into legal seminars offered by your chamber of commerce, local business association or university extension service. They can help you learn the basics of legal issues affecting your business.

Healthy Returns

When you're out of town on business and can't get to a health club, you can stay fit with a simple five-point program offered by Bill Driskill, a personal fitness trainer and owner of Total Body Fitness in Rocklin, California.

1. Walk: Use coffee breaks at business meetings and conventions to take a brisk stroll--not enough to break into a sweat but enough to loosen your muscles. "A five- to 10-minute walk will raise your heart rate, increase your oxygen intake, burn additional calories and increase your metabolic rate," Driskill says. "Your body will feel energized and your mind sharp."

2. Stretch: Take two or three minutes every hour to stretch your upper body, shoulders and neck. You can do a simple routine while sitting at your desk.

3. Avoid sugar: The sweet rolls and cookies often found at conferences may taste great, but the sugar they contain provides only a short-term energy boost. Sweets act as a natural depressant in the long run.

4. Limit caffeine and alcohol: Coffee, tea, wine and alcoholic drinks will dehydrate you and limit your ability to focus.

5. Drink water: Driskill says the amount of water you drink each day should equal, in ounces, one-half your body weight. If you weigh 140 pounds, that's 70 ounces, or seven 10-ounce glasses, each day. So take a water bottle with you and fill it--and drink it--regularly.

One Of A Kind

When you only have one employee, keeping him or her motivated presents special challenges. Your employee has no one with whom to exchange ideas, discuss work problems or share a coffee break. Nor does he or she enjoy the momentum working with others can bring.

The good news: One doesn't have to be the loneliest number--not if you make a concerted effort to keep your solo employee both energized and happy. Bernard Liebowitz, a management consultant and organizational psychologist in Chicago, offers this five-step plan to keep your employee motivated:

1. Ask for input. "When employees feel their concerns are being addressed and their ideas respected, you have a highly motivated employee," says Liebowitz.

2. Be upfront. Employees become bored and critical when they don't know what's going on and feel left out. Keep your employee abreast of what he or she needs to know about your company. When you ask your employee for advice, tell him or her if you end up using it. The next time you ask for an opinion, your employee will be more eager to give it.

3. Be accommodating. When your business relies on one employee, you might have to make special allowances, such as giving him or her time off to attend a class or take a child to a doctor's appointment. Always try to be flexible.

4. Set the tone. Establish the ground rules from the start so your employee is aware of your boundaries. Make sure your employee knows how much authority or responsibility he or she has and clearly understands your expectations.

5. Always reward achievement. When your employee has an idea that helps you sell to a fussy client or resolve a vendor problem, it pays to give him or her praise, thanks and rewards. Before long, your employee will become your strongest ally.

By using Liebowitz' five-step plan, you'll have a more loyal and productive employee--and create a happier work environment for both of you.

Carla Goodman (carlagood@aol.com) is a freelance writer in Sacramento, California.

Contact Sources

Liebowitz & Associates PC, (773) 334-2003, http://www.liebowitzassoc.com

Total Body Fitness, (916) 202-3006, http://www.totalbodyfitness.com