A Legal Primer: How To Successfully Navigate Your Way From Start Up To Success

January

14

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Whether you want to have a large company or a small lifestyle business, you must pay attention to the legal aspects right from the start. If you don’t, there can be a number of unintended consequences. I am certainly not a lawyer, which is why I’ve got Jeremy Streten, the author of The Business Legal Lifecycle, with me today to dig into this.

Join Jeremy Streten and Tim Fitzpatrick for this week’s episode of The Rialto Marketing Podcast!

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A Legal Primer: How To Successfully Navigate Your Way From Start Up To Success



Tim Fitzpatrick
Whether you want to have a large company or a small lifestyle business, you must pay attention to the legal aspects right from the beginning. If you don't, there are a number of unintended consequences that can come up. Now, I am certainly not an attorney, which is why I have a special guest with me today. He is the author of The Business Legal Lifecycle. I am really excited to dig into this. You do not want to miss it. Hi, I am Tim Fitzpatrick with Rialto Marketing where we believe marketing shouldn't be difficult. All you need is the right plan. I want to thank you so much for taking the time to tune in. I am super excited to have with me, Jeremy Streten from Business Legal Lifecycle. Jeremy, thanks for taking the time.

Jeremy Streten
Thanks so much for having me, Tim. I'm really looking forward to it.

Tim Fitzpatrick
Yes, me too. And as people may hear, you are in Australia. So it's afternoon my time. But it's morning your time.

Jeremy Streten
It is morning, my time. And I'm in Brisbane, Australia, which is going to become famous in the next decade because we have the 2032 Olympics. It's a big deal for us.

Tim Fitzpatrick
Oh, hey, there you go. I love it. It is summer for you guys. Right?

Jeremy Streten
It is.

Tim Fitzpatrick
Okay. I always have to think twice about that. Yeah. Awesome. So, are you enjoying the summer weather?

Jeremy Streten
I am enjoying the summer. Brisbane, where I live.,The weather is just perfect and doesn't get really cold for about probably a week of the year where you have to wear a pullover or jumper. I deal a lot with Americans and we call them jumpers, but I know that's something different. We have about a week of the year where that's necessary. The rest of the time it's beautiful and warm, so it's a great place to live.

Tim Fitzpatrick
It's all good. My mother-in-law is Australian, and when she refers to the trunk of the car, she's always talking about the boot. Yes. Awesome. Well, I'm looking forward to digging into this. Before we do, I want to just ask you some rapid-fire questions, help us get to know you a little bit. You ready to jump in here?

Jeremy Streten
Absolutely.

Tim Fitzpatrick
Okay. So when you're not working, how do you like to spend your time?

Jeremy Streten
Probably two main places. One is with my children, playing with them, and the second is reading. I love learning. I love reading and listening to podcasts. So learning is the other area that I spend a lot of time.

Tim Fitzpatrick
What's your hidden talent?

Jeremy Streten
I think spotting problems in businesses. I do a lot of work in that space, and I love to hear about a problem, look at the situation and really identify what the solution is to that problem.

Tim Fitzpatrick
What's the best piece of advice you've ever been given?

Jeremy Streten
Write a book. My business coach gave me that advice ten years ago and I laughed at him as a lawyer. And when I came up with this concept, we're going to talk about today. I realized I had a book in me and it was the best bit of advice you ever gave.

Tim Fitzpatrick
How long ago did you publish your book?

Jeremy Streten
Four years ago.

Tim Fitzpatrick
Okay. I have not written a book, but most people I talk to say that the book writing process is arduous.

Jeremy Streten
It is. It definitely is. And I published the Australian version of my book four years ago and the American one about two years ago. And it is a process, but it's a lot of fun. And as a lawyer by training, which we'll get into, I find that writing comes naturally. But book writing is a whole different beast.

Tim Fitzpatrick
Yes, you got to write it so people understand it, correct?

Jeremy Streten
Yes. Absolutely.

Tim Fitzpatrick
What's one thing about you that surprises people?

Jeremy Streten
I can solve a Rubik's Cube in less than 50 seconds.

Tim Fitzpatrick
Oh, my God, I love it, man.

Jeremy Streten
I don't have one with me.

Tim Fitzpatrick
How long did it take you to get to that point?

Jeremy Streten
I actually couldn't tell you how many tries it took me to do it, but it was a long time. I've just wrote learning every single step, and it's something that I actually use it in my talks to talk about the complexities of business. And so I needed to get it down really quick because you can lose people's interest if you can't do it. There's a process that you can follow. If you go to the Rubik's website, they've actually got the Answer guide, and there's a process that you can follow to learn how to do it. And it's just road learning and just doing it time again. And I do it without looking at it. And I can do it on the right combination in less than 50 seconds.

Tim Fitzpatrick
Really? So no matter where it is, it's still the same moves to get it to where.

Jeremy Streten
Exactly. It's still the same process. And it's a great game with my nephew. He's twelve now, actually, twelve in a couple of weeks, when he was around eight was when I started to teach myself, and I'd actually get him to mix it up and make this complicated as he could spend, like, five minutes doing it to make it as complicated as he could. And then I'd solve it in 50 seconds and he'd like, run away and take it and do it all again.

Tim Fitzpatrick
So what does success mean to you?

Jeremy Streten
Success is having a good life where I'm comfortable and I can spend time with my children whilst building businesses that derive great income and actually help people and achieve my goals.

Tim Fitzpatrick
Where's your happy place?

Jeremy Streten
With my children. Playing with them. Spending time with them. Helping them learn is really my happy place.

Tim Fitzpatrick
What qualities do you value in the people you spend time with?

Jeremy Streten
So I have three core values. One is growth, and I want people to be willing to grow and to learn. Another one is presence. So actually being present in the meeting or in the conversation that's really important to me. And the other is loyalty. You're not talking behind people's back. That's what that means to me. So I look for those three qualities, and it's something that I'm very passionate about, making sure that I work with people that have those values.

Tim Fitzpatrick
So tell us a little bit more. You had touched on this. You are an attorney. But now you also have this separate business, the Business Legal Lifecycle, and the associated book. Just tell us a little bit more about what you're doing, who you're helping and all that good stuff.

Jeremy Streten
Yeah. So as I said, Tim, many years ago, now I started my own business over a decade ago, and I recognized that I couldn't do it myself. So I got a business coach and he said to me, "One day you write a book." And that's the advice that I was given. And I laughed that as if a lawyer is going to write a book that is actually useful for people. And he just kind of smiled at me. And then over the time of being a lawyer and running my own business, I had two matters that I acted for people in one where a client lost or two clients lost a million dollars of other people's money, and another one where a gentleman almost lost $2 million of his own money. And I got really frustrated because in both cases, if they had just been proactive with their legal advice, they could have solved their problems before they arise rather than wanting to react to it. And what happened was I talked to them and we'll get into it a bit more about this later. But they just didn't want to get legal advice for various reasons. And we can talk about that later. And the reasons really frustrated me. So at the time, I was doing a lot of reading and learning about life cycles of businesses. And I came up. I went through all the businesses that I'd acted for properly and ones that did things poorly and came up with these 13 phases about what businesses should do from a legal perspective and when they should do it. And when I mapped it all out and my business partner, the law family, went back and forth a bit. I realized I had 13 phases, and I had 13 chapters, and I had a book. So I had to bring my business station. So you are right. Here it is. So the Business Legal Lifecycle is designed to help business owners to understand what they need to do in their business from a legal perspective, to explain it in plain English so they can understand it and that they can really plan for the future. So there's the book. There's also the test that we have. So you basically take 31 questions and it places you within the life cycle. It identifies where you are in the cycle. It identifies what you're missing from your business and helps you identify in the future. And it gives you a really cool checklist that you can take to your lawyer to say, I need these things done. And so we have that. And we're just about to launch it when we're doing this. An education course where people can actually go on and learn about the law. There's workbooks and videos. The whole course that we've mapped out about what people need to do from a legal perspective in their business. So it's all about educating people, business owners, in particular, about what they need to do, why they need to do it, and also who they need to speak to and who they need to connect with. Whether it's a lawyer, an accountant, a business coach, who is it that they need to connect with to make sure their business is properly protected.

Tim Fitzpatrick
I love it. So let's dig into this. You had touched on this a little bit. A lot of us, as entrepreneurs do not get legal advice. Why do you think that is the case?

Jeremy Streten
I think there are three main reasons, Tim. One is people don't know what they don't know. So they're unconsciously unaware of the legal problems. And that's perfectly normal. As a lawyer, even when you go to law school, you don't learn all the problems. So you need something to help you to really learn what those problems are. And so it's really an unconscious awareness that people have. And that's part of what I'm doing is to make people aware of that. We have lots of free content on our website as well that helps people to learn what they don't know. The second one is, quite frankly, people see it as a cost rather than as an investment. So they see it as a cost rather than investment. They see it as something that I'll just fix that legal problem later. Those two examples that I mentioned before when I asked them, Why didn't they get legal advice? Well, I just took the attitude that I'll solve the problem later. I'll fix it up later, and that'll be fine. It ended up costing the first one the million dollars, other people's money, all that was wiped out because they didn't take that Proactive versus reactive advice. And the third reason Tim, is really around people don't like seeing lawyers. Lawyers use big terms. They use words that confuse people. And this isn't true of all lawyers, but a lot of them, they act like they're better than the client. They act like they're smarter, and people don't like that. There's a real negative perception of the profession out there. And that comes from a fear that people have. And, yeah, I've researched this a lot and talked to a lot of people about this. And there's a fear that people have about coming across looking stupid and really an unknown. And people don't invest the money early on. So yeah, there's the three main reasons that I see business owners avoiding getting legal advice.

Tim Fitzpatrick
Those are three really good ones. The one that really resonates with me is the expense rather than an investment. We talk about that all the time from a marketing standpoint. People see marketing as an expense rather than an investment. And I think there are a lot of aspects of our business that we would benefit strongly from by viewing them as investments, not expenses. So I love that. So we don't get legal advice when we should. We need to be more proactive about it rather than reactive. Honestly, in most cases, would you say by the time we're reacting to it, it is too late.

Jeremy Streten
Yes, in most cases it's too late. And in most cases it'll cost you a lot more in cash to fix the problem than it would have if you had just solved the problem early on. So that would be a fair way of looking at it.

Tim Fitzpatrick
Let me ask you this, too. Going back to the we don't know what we don't know as business owners, what's the easiest way to bring visibility to those things that we don't know that we should?

Jeremy Streten
The short answer is read my book. Yeah, but even if you don't want to do that, there is a lot of content out there. We have a lot of content on our website that's free for people to see. So it's really about educating yourself, not educating yourself to the point where you think you know what to do, because one of the big problems that I see out there is that people we call it in Australie barbecue advice for something similar. You're at a barbecue with your mates and they say we've done it this way. And so you should just solve your problem this way as well. That's great to get his advice, but you could always go and get advice from your lawyer about what you should do, even if it seems like a small thing, because your personal circumstances might dictate what the difference is. And whilst there's lots of great services out there, I won't mention any by name, but everyone would know that there's lots of great document services and all the rest of them. The technology isn't there yet to tailor that to your business. So it's all good to go and get that advice and define that free stuff that you still need to go and speak to your lawyer. But by doing that, you're arming yourself with the knowledge before you go to see the lawyer. So then you've got the knowledge to get the tail of advice when you're there with them.

Tim Fitzpatrick
So if I'm hearing you correctly, we all know about all the legal documents services that are out there. The problem with that is it's like one size fits all legal advice, and there are nuances and specifics to your business to my business. And those agreements need to be adjusted accordingly if they're going to be effective.

Jeremy Streten
Absolutely. And effective. And it's one of those things you don't know until you don't know until you know it, because until the problem arises, you don't see the benefit of it. So, yeah, it's definitely something that any good lawyer or attorney will sit down and be able to tailor it to your particular circumstances. But have that knowledge, first of all. So you know what you need in the first place.

Tim Fitzpatrick
Yeah. So what are some of the common mistakes and misconceptions that we're making as business owners?

Jeremy Streten
If we went through all of them, we'd be here for a couple of days. Probably the big one. And I mentioned that barbecue advice that we call it over here is a lot around the structure. So when people set up their business, they don't want to go and get advice from their attorney, their lawyer or their accountant, and they just go, oh, well, such and such their business up as an LLC or an S Corp or whatever or over here, we call them proprietary two companies, and that's all well and good for that person. But your personal circumstances might be different. And so you need to get that advice. So really, the first one is really setting up the structure correctly for you. And whilst in that situation probably ninety nine times out of 100, it'll be fine and you'll be able to sort it out. There are nuances that you don't know until you get the advice. So I always say, go and get the advice, get it set up properly to make sure that it fits with your circumstances. If you're the business owner who's starting their third or fourth business, you definitely want to get advice. Or if you're investing in property, you definitely want to get advice because you want to make sure that you're protecting the assets that you're building. That gentleman I mentioned before that almost lost $2 million of his own money. He bought a bunch of property in his own name and ran his business out of a company. But he was sued in his own name because of some misrepresentation. Right. So because he was sued all of his property, $2 million worth of property which he bought by reinvesting the money from his business, he could have lost that all because of the way that he was structured. So get the right advice before you do anything in that way. Another one that I see often, Tim, is with startup businesses. When they start engaging with their clients, they're so eager to get in there and start doing the work. And I get why I was the same. They're so eager to get in and start doing the work with the clients, they forget to actually document that agreement. And what happens is they go and start working with the client. And then maybe someone in the client's office changes or the business changes or circumstances change, and that arrangement is no longer what is necessary for either party. And then people start changing because it's a verbal agreement that might have been changed over time. It becomes very difficult to enforce. So that's a big one that I think that startup business owners need to get right. And even if you're a business owner, that's 20 years in, you still need to make sure that you've got that right so that your contracts are sold so that you can protect yourself. And then the third big one is around employees and you're properly engaged with your employees again, it's all well and good and very exciting when we're bringing employees in. And I understand I run three businesses. I get it. The issue comes when there might be a problem down the track and actually having an agreement in place is really important. And often people will say, oh, it's not worth the paper. It's written on. That's nonsense. If it's done properly, it absolutely is worth the paper. It's written on it. And you can protect yourself going forward. There are some of the things I think one of the big messages is to protect yourself by getting the right advice and making sure that what you've got in place is the right thing to protect you in your business.

Tim Fitzpatrick
Let's talk about the Business Legal Lifecycle. I think this is probably going to be the longest part. You said there are 13 steps in the life cycle?

Jeremy Streten
13 phases in the life cycle phase steps, same thing and basically go through what you need to do and why you need to do it in the business. So I won't go through all of them. But the first few are all about setting up the business properly. So I call them the startup phases and they talk about the actual what you need to have document in place to start your business properly. Then the next few are what we call consolidation phases where we talk about actually, let's consolidate your business and make sure that it's getting right, because when you want to expand, if you have problems in your business, you're going to have problems. And so to answer the question that's up on the screen at the moment about that, why is it important to have a plan for the future and what should that plan include? It really is around that it's about building the foundations of your business, because when you go to expand and do anything into the future, if you haven't built those foundations, your problems will multiply. Just a quick example of that. Just from a business point of view. When we started our law firm, we had a practice management software that was based on a server in one office. And we then expanded to another office. And this is back in 2011, and the Internet wasn't great in Australia back then. And so trying to log into that server from the different office was a huge problem. So you multiply your problems and you multiply your problems as you expand. It's about getting your chops in place, your foundation is in place right. And so that's what the startup and consolidation phase are that they're about the first six phases, and then we get into the fun stuff. We're going to the expansion. We get into the expanding your business, maybe setting up other premises and doing that correctly with all those foundations in place, saves a lot of hassle for the future. And then they're the next four phases. And then you get into sale of the business and you talk about sales on the business. So the importance of having a plan is just it can't be understated. But you've got to know where you're going. I like the analogy that the first Apollo mission to the moon. I can't remember which number it was was on track for 3% of the time. So it was actually on the right course for the moon, 3% of the time. But because they knew where they were going and they had a plan of where they were going, they were able to adjust and get there. And I think that applies for business as well.

Tim Fitzpatrick
I think one thing that you touched on that's super important. It's easy for a lot of people to miss is when you don't have those foundations in place and your business expands the legal problems you have are expanding exponentially with that. And so you're opening up this gaping hole in your business as you grow, right?

Jeremy Streten
Absolutely. It's one of those things just kind of creeps up on you. You don't even realize that you're doing and you see it time and time again. And that's one of the reasons that I developed last week on the way so that you build those foundations so that when you do expand, those risks are massively reduced.

Tim Fitzpatrick
One of the things that we talk about from a marketing planning standpoint is there is no perfect plan. You have to put a plan together, start execute it, and you're making course corrections along the way that are helping you see exponentially better results. Do you find the planning that you're doing from a legal standpoint is similar?

Jeremy Streten
I do find it similar. The life cycle is a very high level of business, right? It's not getting into the weeds of all the little things that you need to do. So it's a higher level exposure of the business and what they need to do, in a general sense. To create a tool that delves into everything would just be a behemoth that people would never use. And that's why we want people to go to their lawyer or their attorney and get the actual specific advice to them. But it's about seeing where they're going. So at a broad level, it works for businesses. And I analyzed over at the time, well over 5000 businesses, and I've had loads of businesses do it since. And we worked out the successful path the businesses take. Getting it and doing the weeds will be very specific to the business owner.

Tim Fitzpatrick
Yeah. Got it. Well and I'm assuming that fourth phase of selling the business, some people they never get to that phase.

Jeremy Streten
They never get to that phase. But at some point you will exit your business, whether it's by choice or not, and whether you're going to hand it down to family members, whether you're going to just shut it down. Right. Which I hope no one actually does that there should be some saleability to the business. There'll be some value that you're getting to. It's all about we want people to build before they expand, but we also want them to build for sale, because at some point, as I say, at some point, you will exit your business. It's inevitable for everyone. And you want to have yourself in the best position, because, Tim, the statistics say that when a business owner decides they want to sell or they want to exit it's usually two years before the business is in a proper state to be able to sell. And that's a really scary statistic because most people want to sell when they're burnt out or when they're sick or when they just have enough of the business, and it's a whole another two years before it's actually in a place where it can be sold. And that's a really bad statistic for a lot of business owners.

Tim Fitzpatrick
That's a long time, right? And it seems like you have to have this on your radar so that you can plan accordingly, because there are plenty of business owners that take as much money out as possible. But if you're planning on selling your business, that's probably not the best approach. And so you need to plan accordingly, depending on how far out that sale is.

Jeremy Streten
I think that's right. And I think probably the biggest misnomer out there I see in business is you'll be aware, Tim, of The Seven Habits of Highly Effective People, the Stephen Covey classic, and I think it's habit number two is start with the end in mind, and I find that people I do a lot of consulting as well as the life cycle business, and people find that scary. They find it scary as a prospect to think of what is the end. What does that mean? In a lot of people's mind, that means that they're going to pass away. So I take a slightly different take on that. And that starts with an end in mind. Have some goal in mind, as I said before, with the Apollo missions that were on course of the moon for 3% of the time, but they knew where they were going. They had a goal, and that might change. If you had told me ten years ago when I started my business, that I'd be on here doing podcasts and interviews on Facebook and all the rest of that. I would have laughed at you. But my goals change. So I think about having a goal and then reassessing that on a regular basis. But then making sure that I run a bunch of masterminds. And one of the questions that we went through yesterday when I was doing that was around what's your goal and how well have you communicated that to your team? And then what is your decision-making process and really your decision-making process has to be around your goal. Where do you want to get to? And then what are the steps that you need to take to get there? And having that goal is just so important, even in law, when I'm advising a client, I don't do a lot of legal advice anymore. But when I do, what are you trying to achieve first? What's the goal? And then let's work back from that. And I think that if more people did that, then there would be a lot happier business owners out there and people out there because that help get them to where they're going.

Tim Fitzpatrick
If you don't have an idea of where you want to go, you're going to just drive around in circles. You have to have an idea. I think the other important thing, too that you touched on is none of this stuff is set in stone. I think what holds a lot of us back is we're like, "Oh, my gosh. I'm planning and putting these things down. And this is the way it's got to be." And that's not reality. Pandemic happens. And you got a shift where you thought you were headed is not where you're headed anymore. So none of this stuff is set in stone. But we have to have an idea of where we're going and where we want to end up, because that's our benchmark, right. And then, like you said, you work your way backwards. Like, okay, what do I need to do? What are the things I need to do to start working my way towards that place?

Jeremy Streten
Absolutely.

Tim Fitzpatrick
Yeah. Super important. This has been awesome. I love this. You dropped some serious value. Any last-minute thoughts you want to leave us with today?

Jeremy Streten
I think trust your gut is the real message that I want to get out to people. And if you're not sure whether you should do something or whether you should get advice, go and get advice. If your gut tells you that your question, whether you should do something like getting advice from a lawyer or from an accountant or from any professional, it's probably telling you that you should. So take the time. Yes, there'll be a cost. But change that to an investment and you'll get some, it will save you a lot of money in the future. You may never actually see the same, but you always do.

Tim Fitzpatrick
In a sense, if you don't see it as an investment, I guess you could look at it as insurance, too, right?

Jeremy Streten
Yes. We talk a lot in terms of risks. So the report that people can get from our website is a legal assessment report. It's telling you what it is and it's identifying where the risks are in your business so that you can go and plug those gaps with your lawyer or if you don't have one, then we can refer you to a lawyer and attorney as well through our networks. So, yeah, it's definitely about its insurance to protect you against risk. Absolutely.

Tim Fitzpatrick
So you touched on this. Your site is Business Legal Lifecycle dot com, and you set up some special resources for our audience at Business Legal Lifecycle dot com forward slash Rialto. What are they going to see when they go there, Jeremy?

Jeremy Streten
First of all, they'll get a link to take our test. Now, there's a charge of that of $97, but as a thank you for having me on, we'll give that to your listeners for 50% discount. So there's a code there and all the instructions are there to get on there. There's the ability to go and get the book. And there's also other free resources that people can see on that page as well. We're constantly updating the resources to make sure that they're relevant for what people need, and people can also sign up for our newsletter and all those kinds of things. So there's plenty of free resources on the website and plenty ways to ask questions as well if people have them on there, too.

Tim Fitzpatrick
Awesome. I love it. Thank you so much, Jeremy. I appreciate you setting that up. Guys, if you've got questions, you want to check out Jeremy's stuff, please head on over there. Obviously he knows what he's doing. He's been in this business for a long time, and he's made this as easy as possible to understand and follow, which I always say complexity is the enemy of results. So Jeremy is making it very easy for you. Head on over there. Again, guys, I am Tim Fitzpatrick with Rialto Marketing. If you are not sure what that next step should be from a marketing standpoint to get where you want to go, head on over to our website at Rialto Marketing dot com. That's R-I-A-L-T-O Marketing dot com. Click on the Get a Free Consultation button. I would be happy to chat with you and just give you some clarity on where you should be focusing right now based on where you are and where you want to go. Thanks so much. Until next time. Take care.


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