by Shana Clarke
As Soloists starting up our businesses, we’re usually so focused on getting to the next level that we often don’t think about establishing a secure foundation. Fellow Soloist and attorney Eric Sarver knows that, well-drafted pieces of paper can provide the strongest base for your business.
Eric started his legal career in the late ‘90’s, practicing employment law and labor law at a couple of small firms, and before eventually opening his own practice in April of 2001. About five years ago, he decided to pivot and refocus his business; litigation was a major part of his work, and he got tired of “waking up to a fight every day.” Today, Eric continues to specialize in employment law and business law, but he now focuses more on helping business owners with compliance, and consulting about business law issues, and creating the business structure and contracts that will put your business on the right track.
Eric observes that most new businesses don’t think about legal documentation and procedures when first getting off the ground.
“There’s a common misconception about lawyers, bookkeepers, accountants; people think, that’s for a year from now, down the road when they’re established. The usual mindset is, ‘I need to save my money now, I don’t need a lawyer, I don’t need a CPA.’ However, this can prove detrimental to a business.”
The devastating impact of not starting out with proper legal documents, correct contracts, and accurate corporate formation can really cause harm to a small business. “There are a lot of laws that govern how you do business, how you work with people, and how you hire people. In addition, many contractual issues can be tough to navigate,” according to Eric.” If you and your business get caught up in a lawsuit because of an unclear provision that you wrote in a contract,
“You might spend tremendous amounts of time fighting in arbitration, over problems that could have easily been avoided with 3 paragraphs in your initial agreement”
Here, Eric shares the key documents and contracts a Soloist should have prepared when venturing out into the workforce.
Corporate Entity:
It’s important to establish if your business will be structured as an LLC, an S-Corp, a Partnership, or something else. Eric says there are three key things to think about when figuring this part out: assessing your goals, assessing your services, and assessing your clientele. Instead of thinking about the “now,” he encourages Soloists to “look at what you’re doing and where you hope to go. How do you structure your corporate entity to accomplish your long term goals?”
Licenses:
Eric advises knowing if any operating licenses are required. These could come from a city, a state, or even an authorized board. For example, a massage therapist needs proper accreditation in order to practice on clients, while a restaurant needs certain licenses in order to serve liquor.
Contracts:
Here, Eric emphasizes the importance of considering all angles of your business and your interactions. It’s important to have solid and appropriate contracts with everyone you work with, whether it be a business partner, employees, vendors, freelancers, or consultants. He emphasizes understanding labor and employment laws so you know, “what are my obligations to workers, clients, and the state?”
In general, he cautions against using templates and downloadable forms; many of these contracts need to be personalized, and it’s worth the time and investment to properly establish your business. For example, what may be applicable to a business in one state may not be applicable in the state where your business operates.
Although much of this may seem daunting or not applicable for a Solopreneur who operates alone, Eric wants people to see the bigger picture, and the potential of where your business could grow, if you have the correct / sound legal foundation behind you. Think of these contracts and documents as the roadmap to building your hugely successful business.
Interested in working with Eric? Connect with him at The Law Offices of Eric M. Sarver: LinkedIn: www.ericsarver.com; Website: www.sarver-law.com; Email: ems@ericsarver.com; Phone: 917-930-8684.