Category Archives: Legal Issues

Should I take on a business partner?

Are two heads always better than one?

When it comes to taking on a partner to start or grow a small business, there’s no right or wrong answer. 

Partners can complement each other’s management skills and bring benefits such as special expertise and client relationships. 

As with any relationship, there are trade-offs that must be carefully considered before deciding whether adding a partner is a wise move, and then you have to find the right person for the role.

If it sounds a bit like marriage, you’re not far off. Having the right partner can be a terrific advantage for a business. Making the partnership successful takes as much energy, effort, and positive feelings for one another as it does to make a marriage work.

There are several important things to consider before choosing a partner and entering into a business partnership.

Define your objectives. From the beginning, the partners need to be certain they share the same personal and financial goals and have comparable expectations for what the partnership will accomplish.

Define your roles. Each partner’s roles and responsibilities should supplement and enhance other’s, but not overlap. In other words, don’t get in each other’s way. Respect each other’s skills and abilities, but do your own job.

Share financial obligations and rewards. Be clear with each other about your financial obligations and how the rewards (i.e., the profit and owners’ equity) from the partnership will be shared. 

Sign a written partnership agreement. This is absolutely essential. Every partnership should be based on a well-written partnership agreement, prepared by an attorney with a great deal of experience in business law. It will be worth every dollar you spend to have it prepared. 

Share decision-making. Partners need to agree on all major decisions affecting the business, particularly those involving large investments of capital, changes in strategic focus, key management hires, and more. Decide in advance how you will make these decisions and know you will benefit by having more than one perspective. 

Understand that unhappiness happens. Any relationship between two people is bound to produce a bit  of friction and sometimes anger. More often than not, they are caused by miscommunication or misunderstanding. The sooner they are brought out in the open and discussed, the less likely they will lead to a major “blow-up.”

Provide an “escape hatch.” Every good partnership agreement contains a “buy/sell” provision in case the partnership doesn’t work out, or one of the partners needs to withdraw from the business for any reason. 

When there are disagreements, knowing the consequences of not reaching an agreement is often all it takes to help partners find a reasonable compromise.

My first business was a 4-way partnership that included an Angel investor. Before the investor wrote his check, and the four of us got down to business, we hired an experienced business attorney to write our partnership agreement. He asked a lot of questions and we talked among ourselves until we had the answers. 

We agreed on our roles, our financial obligations and potential rewards. When the time came to dissolve the partnership, everything we had to do was right there in the agreement. 

If you would like to meet with an experienced business person who has volunteered his or her time to help people like you, reach out to a SCORE mentor today! SCORE’s mentoring services are free.

COVID-19 Reopening Guidance for Businesses and Workers

For the latest COVID-19 information and resources visit coronavirus.wa.gov.

On May 4th, 2020 Governor Inslee signed Proclamation 20-25.3 and outlined the “Safe Start” plan, a phased approach to re-open Washington’s economy. Under the plan, businesses and activities will re-open in phases with adequate social distancing measures & health standards in place. Businesses may also need to meet additional requirements developed specifically for their industry.

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Commercial Kitchen Basics

By Devra Gartenstein, SCORE Volunteer

For entrepreneurs interested in starting food businesses, the hurdle of finding a commercial kitchen can be one of the toughest barriers to entry. Not only is kitchen space hard to find, but the intricacies of regulations from different licensing agencies supervising different types of food production can feel confusing and even daunting. Continue reading

Starting a Nonprofit in Washington State

Starting a Nonprofit in WA State.jpgThe “Starting a Nonprofit” Toolkit invites you and your group to think about the difference you seek to make and the structure best suited to move forward. It leads you through key decision-making steps on whether a nonprofit is the best way for you to accomplish your goals. If you decide to move forward with a nonprofit, “Starting a Nonprofit” guides you through the key compliance and good-practice steps to take it towards becoming operational.

You may be feeling impatient to get started. Yet to be successful, it’s critical to pause, reflect, imagine, convene interested people in your community, and plan around important questions that will ultimately strengthen the organization’s ability to succeed.

This Toolkit represents a distillation of knowledge, experience, and research from nonprofit leaders, founders, and organizations that serve the nonprofit sector. “Starting a Nonprofit” brings you from idea to organization. It is the first stop on a journey that will lead you to many other resources. It is also a companion toolkit to resources on nonprofit boards, finance, law, and planning that are available in the Washington Nonprofit Handbook, at wanonprofitinstitute.org, and in 501 Commons resources. It is supported by in-person workshops, webinars, networks, and many other chances to learn more.

Basic Facts About Trademarks

From the U.S. Patent & Trademark Office

What Is a Trademark or Service Mark and How Do They Differ From Patents and Copyrights?

A trademark is a brand name. A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.

This animated video explains how trademarks, patents, copyrights and also domain names and business names all differ. [run time: 8:38]

It is important to understand whether you should file for a trademark/service mark, a patent, and/or a copyright. While all are types of intellectual property, each protects something very specific. In addition to watching the video above, you can study how trademarks, patents, and copyrights differ to ensure you are making the proper filing decision at the outset of the filing process.

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4 Tips for Adding a Partner to Your Business

handshakeFinding and adding a business partner to an existing company is about more than going into business with a friend or family member. How you add a partner typically hinges on your business entity. Depending on how you incorporated your business, entrepreneurs will need to conduct a bit of due diligence in order to properly bring on a business partner.

From an LLC to a general partnership, let’s break down what you need to do now to prepare to add a partner to your business. Continue reading

Steps For Starting a Nonprofit Business

Starting a business with a cause offers much satisfaction as you work to make lives better for others. To launch a nonprofit corporation, it requires taking many of the same steps a for-profit corporation or LLC does, but there are differences, too. Nonprofits must comply with some requirements that don’t affect other businesses.  

So, where do you begin? 

1. Understand what it means to be a nonprofit.

A nonprofit may be created a nonprofit for charitable, educational or certain other purposes—as long as they don’t directly benefit the owner. Nonprofits (if approved by the federal government) operate tax-free, and they can accept donations and apply for grants.

While a nonprofit business can make profits, surpluses must be used toward fulfilling the organization’s objectives—such as buying computer software to run the business more efficiently or investing in resources that deliver value to those that it serves.  Continue reading

Considerations and Resources for Small Businesses That Want to Sell Their Products Internationally

According to the most recent International Trade Association data available through the Small Business Administration, small businesses represent 97.7 percent of the U.S. firms that export goods to other countries. In fact, they account for over one-third of the United States’ known export value.

With business technology ever evolving, expanding our collaboration and communication capabilities, we can assume that more small business owners will want to seize opportunities to extend their customer base beyond U.S borders. With 96 percent of global consumers living outside of the United States (according to the U.S. Department of State), reaching a global market can fuel revenue growth and offer some protection against fluctuations in the U.S. domestic markets. Continue reading

Prepare now for paid family leave law in 2019.

by Monica Blackwood, Columnist, Kitsap Peninsula Business Journal

The last half of 2017 saw companies scrambling to understand and prepare for Washington’s paid sick leave law, and employers continued to educate themselves on the new regulations into the summer of 2018. While that flurry of activity was happening, there was another bill which Gov. Jay Inslee signed: Washington State Paid Family and Medical Leave Law.

We are now the fifth state in the nation to pass such a law, after California, New Jersey, Rhode Island and New York. And, the law’s “go live” date is fast approaching – employers need to comply by January 1, 2019.

A quick summary about this law: For the year 2019, funding will be built up into the plan. Starting January 1, 2020 eligible employees are allowed 12 weeks of family or medical leave. This includes mothers and fathers welcoming a child into their home either by birth or adoption; or to take care of themselves or a family member (defined as a child, spouse, domestic partner, parent, parent-in-law, sibling, grandparent or grandchild) who has a serious health condition, or for a family member injured due to military service. In some situations, that paid leave can be extended to up to 18 weeks.

Read the rest of the story here


ABOUT THE AUTHOR
Monica Blackwood is president and CEO of Westsound Workforce, with offices in Gig Harbor and Poulsbo. Contact her at monica@westsoundworkforce.com.

Ready to start an online store?

With all the news about people making a ton of money online, many aspiring entrepreneurs are excited at the prospect of starting an ecommerce store. However, many people don’t think through all the things that they need to consider before they even start the process of building an ecommerce site.

Here are eight things to consider before starting an online store.

1. What Products Are You Going to Sell?

One of the most important decisions is determining which products you will sell on your online store. Your best bet is to start small – with a few select products that are based around a specific niche, i.e. breastfeeding products, scuba diving gear, hiking products, travel gadgets, hemp products, etc. Start with a handful of products in that niche – you can always add more products to your store as you grow. Check out your competition and see who you’re up against.

Be sure to pick a niche that you’re personally interested in. If you’re not interested in what you’re selling, you will quickly lose your passion.

Also, look for unique products that can’t be bought at Target, Walmart or other big brand stores — you will never be able to compete with them on price or promotion.

For instance, when I had an ecommerce site, I searched for mom- or parent-invented products that weren’t available through mass market stores. Plus, these types of product manufacturers are typically more willing to work with you on terms and drop shipping (which we will talk about in a little bit.) You can also look for innovative products to sell on crowdfunding sources like Indiegogo or Kickstarter.

When you determine which niche products you’re going to sell, see if there are industry associations, trade websites or magazines. If so, join, follow and subscribe. Also, if there are product tradeshows around your product niche, attend these trade shows to discover new products, speak with the manufacturer reps directly and learn more about the industry in general. Often at the tradeshows you will be able to negotiate better pricing or drop shipping arrangements – especially if the manufacturer is launching a new product and they’re looking for new distributors.  Continue reading