For the purposes of this post, we’ll break the life cycle of a business into four separate stages:
- starting and establishing your business
- growing your business
- preparing your business for sale
- selling your business
A lawyer/advisor’s role at each stage of the journey
When you start your business, there will be a few legal hoops to jump through, which will involve fair amounts of paperwork. When it comes to choosing your business structure and forming your business, you can probably get through it on your own.
However, if you have contracts to settle (say you’re forming a partnership), you might want to get a lawyer involved. Mistakes can be costly.
Another area you might need an advisor with is intellectual property. Here are a couple examples that can be tricky for the uninitiated to navigate:
- choosing a name that might be subject to trademark dispute
- licensing a process or product from a patent-holder
Growing your business
Once you’ve got your wheels off the ground and the work is rolling in, business should be fairly straightforward. You’ll build relationships with your most valuable customers, invest in some marketing, and scale up gradually over time.
One of the biggest perils possibly awaiting your enterprise at this stage of the game is a legal threat from competitors, government agencies, or unsatisfied customers.
You don’t necessarily need to have a legal expert on retainer at all times, but there are some advantages to it. The main perk is that you’ll have an established relationship with your counsel before any trouble begins, so they’ll know your business inside and out.
- They can help you with contracts you put together, so you don’t make costly mistakes
- They can advise you on and when/if to protect your IP
- They might help to prevent legal trouble from arising in the first place.
Preparing your business for sale
At some point, you’ll be exiting the business. We can’t say enough about the value of planning your exit strategy out of the gate. Most of the things that give a company good value on the market are things that will improve the value your business provides to you, as the current owner. Additionally, planning your exit will get you prepared for one of the biggest tasks you’ll face as a business owner – selling your stake.
Having a legal and business advisor in your corner will go a long ways in this regard. In fact, we’d say this is at least as important of a reason to have a lawyer as any other. An outsider with expertise will provide an objective and clinical perspective on your company, as well as helping you navigate the complexities of things outside your own expertise, like valuation, Key Performance Indicators, and negotiation.
Selling your business
The one stage you absolutely do not want to brave alone is the actual sale of your stake in the company. This process involves marketing, meeting with buyers, negotiating, due diligence, and copious amounts of paperwork.
Regardless of what stage you’re at in the life cycle of your business, the best time to start developing your exit strategy is now. You don’t need to figure it out on your own, either. A experienced business advisor can help you build your business into sought-after commodity, using tried-and-true methods.
Business owners in Seattle, Bozeman, and California can contact Free Vector Advisors for help with intellectual property, valuation, and the final sale of a business.