Business agreements
Business Planning

Rethink Your Relationship With Legal Agreements: Deal With Change and Conflict In A Clear and Healthy Way

This is the fourth in an ongoing series covering the value legal agreements bring to your business beyond the surface. From boosting your bottom line and expanding your business to hiring the most talented team and improving every relationship you enter into, this series offers a comprehensive look at how effective legal agreements can enhance just about every aspect of your operation.

If you are like most business owners, you’ve likely been presented with legal documents that contained terms you didn’t fully understand. You may have even signed documents that you didn’t completely read because you were intimidated by the confusing legalese. There have surely been times when a client or team member has signed a legal document you presented to them, even though they didn’t fully read or understand what they were signing.

Unfortunately, such scenarios are far too common. But it doesn’t have to be, rather than creating confusion and anxiety, the agreement process should do the exact opposite.

Indeed, the agreement process is your opportunity for creating clarity on your relationships, policies, and procedures, and delivery of your product or service. Take it from us, as your Family Business Lawyer ™, if you avoid reviewing, rethinking, and revamping your agreement process, you are not only putting your assets and business at risk, you are short-changing yourself, your work, and your relationships.

In addition to creating clarity, when done right, the agreement process is ultimately about creating connection, consistency, setting boundaries, and establishing expectations. If your current agreement process isn’t providing you with these outcomes, then this article is for you.

Contracts vs Agreements: What’s the Difference?

As we mentioned in a previous blog article, in some cases, you do not need to put an agreement in writing to create a legally enforceable agreement. As long as the proper elements exist, a valid contract can be created verbally.

But putting semantics aside for a moment, in that case, do you really have an agreement? If you don’t put it in writing, you may have a contract, but a contract and an agreement are actually two different things.

A great agreement that is often overlooked in writing requires these elements of agreement as well:

  • Connection,
  • Being on the same page,
  • Alignment,
  • Clarity,
  • Coherence

This is how many business owners end up in unnecessary expensive and messy conflicts. They have contracts, but not true agreement. To help ensure you don’t end up in the same situation, we recommend you rethink your relationship to legal agreements by implementing the following best practices.

What Do You Want From the Relationship?

First of all, before you ever sign a contract or enter into any business agreement or arrangement, get clear on what you actually want from the relationship. In doing so, it’s vital that you are completely honest with yourself—and be willing to be completely honest with the other person as well.

When it’s unclear what you want from the relationship, be willing to seek support in order to become clear. This might mean finding a safe space to talk through what you think you want from the relationship. Or it could mean speaking out loud about your unsurfaced assumptions and receiving reflective feedback. It may also look like asking questions you may not have initially thought about.

Achieving this kind of clarity is one of the major differences between using generic template agreements you find online versus working with us, your Family Business Lawyer™, who serves as your trusted advisor. As your trusted advisor, we will support you to get clear, test your assumptions, and surface what you cannot see. This allows you to get out of your head and achieve a truly objective perspective from a position that you may not be fully aware of you can if you are solely relying on a generic online agreement.

If you are resistant to receiving counseling to create high-quality legal agreements or working with a lawyer who is not a great counselor and they are only providing you with templates full of confusing blanket terms, you are missing out on one of the most significant opportunities a business owner can have. The counseling process of a Family Business Lawyer ™ allows you to work through all aspects of a business relationship that may bring up uncomfortable feelings ahead of time, rather than having those uncomfortable feelings surface down the road, resulting in expensive conflicts that could have easily been avoided with the proper planning.

Start With The Ideal Outcome In Mind

Once you are clear, putting in place the legal agreement is easy. Follow these steps below to gain clarity on the foundation of the agreement:

Start by identifying your desired outcome of the business agreement. If you could see into the future and achieve the ideal result the relationship is to provide, what be true for it to be successful? To understand the ideal outcome, first, imagine yourself celebrating a future in which the relationship met all expectations. Suppose you worked together in all the best ways, and you accomplished all of your goals together.

What would need to happen for everything to go that well? That’s what you want to document in your agreements.

If you are hiring a team member, for example, how will they know they are succeeding? Based on what that success looks like, you should establish clear, measurable outcomes for the role, with specific metrics for success, along with time frames for specific goals and objectives to be achieved. Then, include that information in the employment agreement, so it’s abundantly clear what the expectations for the position are for the team member and for you.

On the other hand, you also need to think about how you would work with the team member if things didn’t work out as expected. What would happen if the team member needs to leave, can’t perform, or isn’t performing for some reason? Are you agreeing to any payment beyond just payment for performance? If so, that needs to be documented, and if not, that also needs to be documented.

Next, what are the reasons you can terminate the relationship? On what basis can the team member walk away? What is each of you entitled to in the event the relationship needs to end? All of these scenarios need to be thought through and planned for during the agreement process.

Along these same lines, whenever you bring on a new client, you should establish similar metrics of success for that relationship and document them in your client service agreement. What would need to happen for the engagement to be fully complete? How will you know when it’s time for the relationship to transition to the next level? What happens if the agreement is not followed or the scope of work changes?

Lastly, and perhaps most importantly, you should similarly outline your payment terms in your agreement: how much you get paid, how and when you expect to be paid, along with how late payments and non-payment will be handled. The more clarity you can achieve around these outcomes and document what the ideal outcomes would look like, the better things will be for both you and your client.

Next week, in part two, we’ll discuss how you can use the agreement process to more effectively deal with the inevitable changes that take place as your business relationships evolve and your original agreements need to be renegotiated.

For now, make the commitment to never sign or send another legal agreement again before it’s been reviewed by us, your Family Business Lawyer ™. This is a foundation of great business practice, and it’s one we support every client with. If you have current agreements that are either in place or ones that need to be signed, contact us. We can review what you do have and support you with wise counsel on your entire agreement process. It could be the make-it-or-break-it difference for your business.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Read More
Business Agreements
Estate Planning

Rethink Your Relationship With Legal Agreements: The Basics of Agreements and Contracts

This is the first in an ongoing series covering the value legal agreements bring to your business beyond the surface. From boosting your bottom line and expanding your business to hiring the most talented team and improving every relationship you enter into; this series offers a comprehensive look at how effective legal agreements can enhance just about every aspect of your operation.  

If you are like many small business owners, you may have had one or more of the following thoughts about using legal agreements in your business:

●     I don’t need a legal agreement when I’m working with people I know and trust.

●     Legal agreements are only needed for big deals or purchases.

●     Legal agreements aren’t worth the time and money.

●     Lawyers push you to use agreements because that’s how they make money.

●     The do-it-yourself legal agreements you find online work just as well as those created by a lawyer.

●     We just need to get to work—we don’t have time to worry about legal agreements.

If you’ve ever had any of these thoughts, it’s time for you to rethink your beliefs. By rethinking the way you view legal agreements and using them effectively, you can make more money, boost your company’s growth, and improve your relationship with everyone you work with—clients, partners, team members, vendors, and service providers. 

Using great agreements and having an integrated agreement process shows you care—and not just about the deal at hand, but about the other party and your business as a whole. Having well-drafted, well-structured, and well-presented agreements demonstrates that you believe in yourself and the people you work with, and these documents can greatly strengthen your business and relationships at every level.

Legal agreements 101

In order to get the most out of your relationship with legal agreements, you must first learn how they work. Here we’ll discuss the basic facts you should know about legal agreements and how they can affect your business. Note, the terms “agreement” and “contract” mean the same thing and are thus used interchangeably.

What constitutes a valid legal agreement?

For a contract to be legally enforceable, four elements must exist: 1) an offer 2) acceptance 3) consideration (i.e., something of value was exchanged like cash, services, or goods) 4) the capacity on the part of both parties to enter into the agreement.

In some cases, a contract must be in writing to be enforceable, but most of the time, putting your agreement in writing is not actually necessary. The fact that agreements didn’t always need to be in writing was kind of shocking to me.

For example, if I make an offer, you accept the offer, something of value changes hands, and both of us have capacity (i.e., a sound mind), then a contract exists, even if it wasn’t written down.

While this all sounds pretty simple, problems can arise when what I offered to do turns out to be different from what you thought I offered to do. And even though we exchanged something of value and both have the best intentions, if you don’t accept that I’ve fulfilled what I promised I would do, but I feel like I’ve done exactly what I promised to do, we’ve got a problem.

In the above situation, a legal agreement actually does exist (all four factors are present), even though it wasn’t written down. Or let’s say the agreement was written down, but it wasn’t written clearly, a contract would still exist, although it would be a messy one that could potentially cost both of us big money to fix.

When must an agreement be in writing?

While an agreement doesn’t always have to be in writing to be considered valid, there are 5 situations in which a contract must be in writing to be enforceable. These situations include:

1)   contracts involving real property

2)   contracts that cannot be performed in under one year

3)   contracts where you assume someone’s debt or they assume your debt

4)   agreements related to the distribution of assets at the end of a marriage, such as a prenuptial agreement

5)   contracts for the sale of goods valued at $500 or more

What can go wrong with agreements that aren't put in writing?

Even if you are involved with a situation where an agreement doesn’t need to be in writing to be enforceable, putting every contract you enter into in writing is your best course of action for a number of reasons. 

First, if you don’t write down the terms of your agreement and you have to go to court, the court will determine the terms of your agreement based on assumptions about the behavior of the parties involved, the situation, and a number of other contributing factors. Plus, who wants to go to court just to enforce an agreement?

Second, laying out the specific terms of your agreement is going to close more deals for you, and it’s going to get you more out of your relationships in regards to the positive outcomes you desire. And that’s true not just for you, but for everyone you have a relationship with.

Third, the process of writing down the agreement, if done well, will shed light on areas of the relationship that you and the other party may have thought you were in agreement about, but you actually weren’t. And the sooner you discover where potential disagreements or conflict exist in a relationship, the better.

Although it may seem counterintuitive, trust me on this one: You want to identify any potential conflicts in the relationship as early as possible before investing time, energy, attention, and money that can’t be recovered. What’s more, by uncovering any potential sticking points ahead of time, you’ll find out how easily you can work through conflicts with the other party, which is a key part of any good relationship, especially those that last over time.

An instrumental instrument

When it comes to running a business, your legal agreements are among your most vital tools. Indeed, agreements are designed to govern and protect some of your company’s most essential elements: your personal liability, intellectual property, financial investments, and tax strategies, to name just a few.

Are you really going to trust a handshake deal or a generic, fill-in-the blank form you found online to control such vital components of your business?

We specialize in creating contracts for small businesses like yours. With our support, your contracts will not only be legally sound, but their clear, concise presentation will wow potential clients and make you stand out from the competition. Whether you need new agreements created or want us to review ones you already have—even those drafted by another lawyer—contact us today.


We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Read More
Should I take EIDL?
Business Planning

Should You Take the Loan Offer from the EIDL?

You may have opened your inbox in the last couple of weeks to discover an email from the Small Business Administration (SBA), finally offering you Economic Injury Disaster Loan (EIDL) money you applied for a couple of months ago.

Many business owners just like you jumped at the opportunity to get money from the EIDL once the CARES Act went into effect. There was such a rush of applications that funding was seriously backed up, and now the loan offers are coming in. 

So, what’s the offer? 

The EIDL is a 30-year loan at 3.75% interest (with non-profits qualifying for 2.75% interest). While some people are getting a smaller range of options ($1,000–15,000, for example), others have gotten options to choose within ranges up to $150,000.

If you’re one of the business owners who received an EIDL loan offer, you might be wondering what to do next. Should you take it? How can you use it? 

This video has a lot of great information for you to consider: https://www.youtube.com/watch?v=Eqw9BAxt9Rg&feature=youtu.be&fbclid=IwAR3jMQKvcUltLrcnKeC6z99XSkttZ12nGlK2qYXc3u6jXYee1KaRMnbCFg0

If you aren’t sure about taking the EIDL, it may be because you aren’t sure how to best use it. If that’s the case, reach out to us and let’s talk. We have resources to support you to use this EIDL money to shore up your business systems.

Most business owners who are ready to create a next level of success need to uplevel the systems that support them, including their legal, insurance, financial and tax (LIFT) systems. That’s where we come in.

We can work with you to evaluate where there are holes in your LIFT foundation that could have left you in a shaky position once COVID hit. Now, with your EIDL resources, you can strengthen your foundation and be ready to thrive, no matter what comes our way. 

If the risks and restrictions about EIDL worry you, remember these resources are here to help you, as are we, so you don’t have to go it alone.  With a low interest rate and 30 years to pay it back, your payment is likely to be under $600 a month. Consider what you can do with the loan over the next year to ensure you are earning at least the payment amount every month over the next 30 years. 

If you decide that you do want the EIDL loan, things will start moving fast. The paperwork comes to you within 48 hours, and once you fill that out, the money could hit your bank account as soon as the next day. That means you’ll be able to immediately use that money to get your business back on its feet, so you can focus on expanding your profits.

If you’d like to talk before you take the loan, give us a call. We’re here to support your wise decision-making process. 

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Read More
Should I file bankruptcy for my business
Business Planning

Is It The Right Time For You To Consider Bankruptcy For Your Business?

Coronavirus has forced many business owners to face the tough decision of whether to persevere and keep their business going, or to close it all down and walk away. If you are asking yourself this question right now, here are some things to consider before going down the bankruptcy road.

First, bankruptcy is a valid option to consider. But, do know that each moment you spend considering bankruptcy is a moment not spent considering how to turn your business around. Use your energy wisely, get the information you need quickly, and then make your decision so you can move forward powerfully.

Before considering bankruptcy, you should talk with a business coach or advisor who can help you reorient your business model to see if additional capital could help you dig out of the hole you’ve found yourself in. We may be able to help you here. It may sound odd to be thinking about more capital when you are already in over your head with debt, but if you have a good business model, you may just need to look at your business differently, restructure and upgrade the way you are looking at your cash flow and budgeting process.

Often what we see is that a business owner may have a great offer and a strong customer base, but may not have learned how to manage their financial resources properly. If that’s you, bankruptcy may not be the best choice. It would just mean that now you’ve got the bankruptcy on your record (a big disadvantage), and you still have to learn how to manage your finances. If that’s your situation, we may be able to help you turn things around without filing for bankruptcy.

There are two major benefits of bankruptcy. One is you get a fresh start, which you can get without bankruptcy. The other is that any debts that are forgiven in bankruptcy do not result in taxable income to you. In contrast, if you negotiate down your debt, the forgiven debt will be considered taxable income.

But that’s only one small consideration when it comes to bankruptcy. The much bigger consideration is your recovery process after the bankruptcy—whether the bankruptcy will appear on your personal credit report (vs. a business-only bankruptcy), and what you can keep and what you will lose in the bankruptcy.

Most of all, it is very important that you seek legal counsel who will first work to understand your business and your personal goals, and then help you determine your best path forward. Making the wrong choice here could mean that you would lose more than you have to. Please reach out if you are considering bankruptcy, and we will help you review your options.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Read More
Making good choices during the hard times
Business Planning

How To Make Better, Faster Decisions During Uncertain Times

When there’s a blow to your business, especially an unprecedented world event like the pandemic we are living through, you might feel paralyzed and unable to make a move. But when problems crop up, you as a business owner can’t afford to freeze. Or fight, or flee, for that matter. Freeze, fight, and flee are the three most common responses to trauma, and they are reactive states that can sneak up on us before we even know what’s happening.

So, step one to making it through every challenge is to start to get to know yourself, and how you respond to trauma—do you freeze, fight or flee? Make a note for yourself, so that you can see it when it happens.

Often there are ways out of a bad situation that can actually put you in a better position than the one you were in before. Sometimes the best you can hope for is to keep the damage to a minimum. Either way, the first thing you need to do when you are faced with challenges and uncertainty is to get your head on straight. 

Here are some suggestions of how to look at your problems in a way that will keep you moving forward rather than frozen with indecision, fighting for your life, or running for the hills.

Find Your Inner Calm

There are a lot of outside voices who claim to be experts, and who claim to know how you should conduct your business. Some of these voices could be helpful, and others could be harmful, but if they’re coming from many directions at once, you’re not going to be able to tell the difference. With every piece of bad news or new demand placed on you, your body reacts. Every demand on your attention, and every rush of adrenaline, is taking away from the energy you could be using to solve the problem that is in front of you.

Bruce Lee said, "There will be calmness, tranquility, when one is free from external objects and is not perturbed.” If you are taking in negative voices and the 24-hour flow of news, notifications, and speculation, you will never have the mental space to consider your options. First and foremost, stop watching the news. Then, get the book The Art of Contemplation by Richard Rudd, read it and breathe. Finally, carve time out for yourself daily to breathe, pause, and remind yourself what really matters. Your inner peace is paramount, and must come before anything else.

There will be residual emotions and thoughts that remain once you’ve switched off your television and digital devices. Acknowledge them, don’t fight them. If you fight them, they’ll just fight you back, but if you just let them be, they’ll lose their power over you.

Once you’ve shut out those outer and inner voices, do something that relaxes you. When all else fails, you have the best relaxation tool built right into your body—breathing. Fill your lungs with oxygen with a nice, deep breath, and you'll clear your mind that much faster.

Get Support You Can Trust

Do not sit alone with your problems. Reach out and ask for help. Not all help is equal though. Reach out to a mentor, advisor, or guide who has possibly been where you are and made it through. If you don’t have anyone like that in your life, reach out to us. We serve as a trusted advisor and guide for many of our clients.

Whatever you do, do not reach out to people who will simply reinforce your freeze, flight, or fight response. Do not reach out to people who have not done what you want to do, or been where you want to go. They will not be able to help you.

You must reach out to objective advisors who can help you with logic, intelligence, foresight, wisdom, and experience.

Break Down Your Problems

Imagine you have a large, heavy bookcase that you need to move from one room to another. How would you get started? If you’re like most of us, you’d start by taking the books down from the shelf. Then you’d consider the size of the door or hallways you’ll need to pass through, and whether it means you’ll have to take the shelf apart as well. Is one person ok to carry it, or do you need to call a buddy? And once it’s in its new location, how will you re-shelve the books?

You have a lot of choices when you tackle this problem. The worst choice, however, is to just try to pick up the whole bookcase, full of books, and start trying to move it into the other room without a second thought. You could throw out your back, break your foot, or get knocked on the head by the Complete Works of Shakespeare.

That’s what you’re doing when you try to solve a big problem on your own before thinking it through.

When you are facing a problem, you need to consider every step that needs to be taken to solve it. That will help you figure out what resources you’ll need to reach your goal, and what small decisions you’ll need to make along the way.

Focus On What You Want, Not What You DON'T Want

Race Car drivers are taught to not let their eyes stray from the track. Looking at the wall around the track can end in a high-speed crash. Whatever picture you have in your head right now is what you’ll move toward.

Vision really does matter. 

Obsessing over your revenue, for example, is limiting your thinking to one short-term goal. Enriching the lives of your customers and employees with your products and company culture is a vision, which your short-term goals support (possibly including the one that you are fixated on). If you keep your eyes on the finish line, you’ll be able to more easily see all of the smaller maneuvers you have to make to get there.

Remember Your Resources

Lastly, remember that you have a network who is there to help and support you. Once you’ve taken some time to quiet your mind and collect your thoughts, you can choose who to listen to. Call on your mentor or mentors. Don’t wait to do this. You need help before you feel comfortable asking for it, so ask sooner rather than later. 

And of course, remember that we are here to be your advisor as well. If you are having trouble determining your path forward in the face of a challenge, we can help you lay out your options and define your goals, so you can make more agile and wise decisions. Don’t put off calling us when you need to. We’re here to help.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Read More
Exit Strategy
Business Planning

An Exit Strategy Enhances Your Business (and Legacy) Building

Exiting your business isn’t a decision to be made lightly. It may have been something you were considering before the COVID-19 pandemic hit, or it could have been something that you’ve had to reckon with because of shelter-in-place orders. Maybe your business had already been struggling, and you’ve had to come to terms with your financial struggles due to long-term closures and loss of revenue. Or perhaps you want to cash out of the investments you’ve made over the years, and reallocate your resources into something else before there are any other unexpected changes in the economy.

Whatever your reason, there is a lot to take into account when considering a business exit, not just when it comes to your money, but when it comes to your personal legacy as well.

Creating an intentional exit plan will help you achieve the best possible outcome for yourself and your family’s finances, your reputation as a businessperson, and the business itself. Having a plan in place, even if you aren’t planning to exit anytime soon, can also help keep the business stable in case of your sudden death or disability. This is especially important now, when COVID is posing such a major threat to health.

Sell to Partners, Employees or Family Members

If you are hoping that someone else will carry forward your company’s mission, you will likely want to sell to someone who understands your business already.  If you have low turnover and devoted employees who know how to drive the ship, handing over the keys to one of them may not cause too much upheaval for the business itself.

The employee could pay you in one lump sum by taking out a personal loan, though this is a riskier and higher-cost option. A more manageable choice for many is an “installment sale,” which means financing the sale of business and having the employee pay you in installments over time. Making an employee or family member a part-owner of the business over time could make it easier for them to complete a buy out when the time comes.

Another option is to set up something called an Employee Stock Ownership Plan (ESOP), which means that every employee owns a share in the company. Anyone who leaves the company cashes out their shares when they go—that includes you.

Set Your Business Up to Be Acquired

To get the best return on the sale of your business, you will need to make it as attractive as possible to an outside company or individual who you think would be interested in buying it. This option may require a lot of work on your part, or else you may end up having to sell far below market value in order to make a quick exit. You will need to conduct market research, tighten your operations, and be able to prove your business’s profitability to any prospective buyer.

To implement any of the plans above, and to plan for an exit that maximizes your gains and preserves your legacy, you will want to consider hiring us to help you take the following steps.

Exit Plan Steps to Keep in Mind

  • Evaluate Your Business Systems: Whether you choose to sell to an outsider or be bought out from within the company, you will want to have your business systems evaluated from the perspective of “saleability” so you can identify what needs to be shored up for the business to be able to continue beyond you.

  • Amend Partnership Agreements If Necessary: If you have partners, hopefully, you discussed exit to begin with, and have plans in place for how to exit, transfer your interests, and split up profits and losses. If not, it’s time to get those agreements updated and documented now. Call us immediately, if it’s time to relook at your partnership agreements.
  • Write Up Provisions for Family Succession: If a family member will be taking over your business, be very clear about what that entails. Who will inherit ownership of the business? Who will inherit the actual duties of running the business? If there are multiple family members, such as siblings, who all may have an interest in the company, but who may not all be treated equally, begin to address those issues now. We can help with that.

  • Get a Business Valuation: Before you consider exit, look at the different valuation methods, and decide which one applies to your business. We can help you with this process.

Even if your business is surviving and maybe even thriving as a result of the changes brought on by the coronavirus pandemic, now is a good time to start thinking about the exit strategy for your business. If you’re not sure how to set yourself up for any of these strategies, just give us a call and we can help you get started.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Read More