Your idea may belong to someone with a patent, trademark, copyright, or trade secret. Rules for your market get set by major suppliers, landlords, federal "czars", state regulators, local governments, and your customers. Teamwork depends on EEO compliance, enforceable employment contracts, and avoiding "1099" abuse, Your business plan needs industry-appropriate contracts, clear and affordable financing arrangements, and legal, insurance, and business arrangements in place for death, retirement, resignation, or disability exits. This slide show identifies problems and suggests solutions relevant to each of these issues.

1. By: William A. Price, Attorney at Law
wprice@growthlaw.com
1-800-630-4780

2. Lecherous
Supervisor
$600k For
Wrongful
Termination
She Sues/Is
Fired
Office Party
Fondles Staff
Lawyer

3. The
The
The
The
Idea
Market
Team
Plan

4. What Ownership
Problems Are There?

5. Your product or service may
already be:
1. Patented: Business processes,
products, or formulas may already
be subject to competitor patents –
e.g. square cellphone “look and
feel”. Check uspto.gov and license
if necessary.

6. 2. Trademarked: Competitors
may have registered the names
you want to use, or established
common law trademark rights.
Check web and uspto.gov, and
license as needed.

7. 3. Copyrighted:
Getty Images or an artist may
own your website pictures,
designs, and blocks of text:
$800-$1,500 or more each
image to settle: Check your
rights on each file. Switch to
stuff you clearly own.

8. 4.
Trade Secrets:
Your former employer or your employee’s
and agent’s former employers or other
contacts may have rights to customer names,
marketing plans, product formulas, computer
code, and other things you use in your
business. Negotiate releases and get hold
harmless clauses in your employee and
supplier deals.

9. Who Regulates Your
Business?

10. 1.
2.
3.
4.
5.
6.
7.
8.
Manufacturer dealership rules
Secretary of State auto dealership license
Commerce Commission relocation towing
license/other towing licenses
County zoning district compliance
County general business license
State business organization registration
Federal, state, and local income, retailer’s
occupation, special auto taxes and reports
Auto license plates for customers

11. 1. Major Suppliers: Unless you make your
own stuff from standard components, you
probably are a dealer for one or more
manufacturers, or a franchisee using someone
else’s supply chain and business methods, or a
professional using invoicing, forms,
accounting, web services, and other systems
that let you be market competitive. Big
suppliers determine who they will serve, and
what the service rules (capital, hours, etc..) are.
Know the rules.

12. 2.
Landlords: Shopping centers or
downtown business districts may set hours,
require joint advertising, regulate or provide
street and storefront or office signage,
negotiate build-out or other site adaptation
assistance, and provide services (heat, light,
phone/web access) needed to operate, plus
charging (and annually escalating) rents. Sites
vary. Get a friendly landlord, or own your own.

13. 3. Federal “Czars”: The US may be large, and
Washington far away, but federal regulations
are pervasive. Your product formulation (e.g.
ethanol percentage in gasoline), your basic
design (emissions controls for woodstoves,
power plants), or your operations (migratory
bird kills in wind farms, dairy and pipeline
pricing) may be set by (frequently changing)
rules. Know the rules, and have a compliance
and prompt reporting program.

14. 4. State Regulators: The Illinois Department of
Financial and Professional Regulation website
takes 12 pages just to list the titles of the
different businesses and professions it
regulates. Your license could be revoked, with
a hearing board dominated by professionals in
a competing line of work – like chiropractors,
governed in part by physicians. Get the right
qualifications, keep your license and
professional education current, and have a
compliance program.

15. 5. Local Governments: Zoning and “general
business” or other industry-specific licenses
can cost more to comply with than federal or
state regulations, especially where, as in
foodservice, home services, or other very local
services and professions, most of your work
will be done in one or two communities. Check
for compliance, and get and renew whatever
licenses are required annually. Make sure your
site complies with building and zoning rules.

16. 6. Your Customers: Customer expectations
change, and you need to provide them the
predictable and competitive prices, the
convenient service, and the fashionable
“extras” that define the state of your
profession’s art. Architects need to have
“green” elements in their building plans.
Lawyers need “industry experience” and good
referrals. Accountants and payroll services
need add-on knowledge, like health insurance.

17. What Can They Do To
You?

18. 1. No Illegal Discrimination: Federal, state,
and local EEO statutes and rules make age,
sex, sexual orientation, national origin, and
religion all inappropriate as decision factors for
hiring, discipline, or discharge. Is your
employee handbook up to date, with policies
and plans for employees with sexually
transmitted diseases, or chronic health
problems, or unpopular religious holidays?

19. 2.
Employment Agreements: Noncompetes
are hard to enforce, and nondisclosure terms
are difficult to monitor or to enforce unless you
keep your secrets as securely as possible.
Personal bankruptcy lets employees out of
deals. If you can afford it, “golden handcuffs”
(pensions that take time to vest, performancebased bonuses, profit sharing, good salaries)
that make leaving very expensive for your key
performers can be a very good investment.

20. 3.
Independent Contractors: Unless there are
clear statutory exceptions, like those for truck
drivers, realtors, or insurance agents, almost
all the “1099” workers Illinois businesses use
are really employees. Illinois Department of
Employment Security audits and penalties, IRS
penalties, workers compensation liability (even
for temps), and Social Security/Medicaid taxes,
Affordable Care Act mandates, and ERISA rules
for benefit programs may all apply to these
supposedly “independent” contractors.

21. What Documents Do You Need
To Move Forward?

22. 1. Industry-Appropriate Contracts: Where a
business broker needs a fee agreement with
noncircumvent clauses, a rock star may need
demo shopping agreements, an exclusive
license agreement with a publisher, a
songwriter contract, live concert appearance
contracts (with provision for exclusively blue or
red M&M’s, of course), a personal manager
contract, and various national or international
licensing deals. What contracts can help make
sure you get paid?

23. 2.
Financing Arrangements: If you are a
professional employer organization, you may
“factor” the employee services orders you
receive, or, more likely, the invoices you can
send after each month’s leased employee
hours and expenses have been incurred. Or,
you could have an “asset based loan.” Know the
financing terms that apply to any type of
capital, loan, or factoring arrangement: when
and how much do you get, and how much do
you pay?

24. 3.
Sources of Capital:
Whoever funds a
capital round basically sets the terms of your
deal. Know what the contract terms mean, and
which ones might be negotiable. “Double
ratchet” protection, for instance, means they
keep their percentage of your company
whether your valuation goes up, or down. You
don’t.

25. 4. Exit Events: Death, retirement,
resignation (voluntary or forced), and
bankruptcy are the usual reasons a founder
leaves the company. You need insurance for
the first, a savings or investment plan (and/or
a good business valuation and business broker
or lawyer) for the second, a capital structure
that preserves your control (and option to fire
partners) for the third, and good cash flow,
marriage partners, and tax compliance to avoid
the last. Review these arrangements annually.

26. William A. Price
Attorney at Law,
www.growthlaw.com
1-800-630-4780
wprice@growthlaw.com