Business Law

Whether you started your business with the intent to sell it one day or have simply decided it’s time to move on after years of hard work, many business owners eventually want to sell. Sometimes the potential buyer is right in front of you, like a co-owner or employee with sufficient purchasing power and the necessary expertise to seamlessly step into your shoes. If not, you can take several important steps to make your business more appealing to a wider audience, increase its value in the marketplace, and help facilitate a smooth transition. 

The first place to look are your business records. Potential buyers will want to review documents like tax returns, profit and loss statements, balance sheets, cash flow statements, accounts receivable, and accounts payable. If you already have excellent record keeping practices, then you are in good shape. If not, then now is the time to make a change. Consider seeking professional help from an accountant or other qualified financial expert to organize your books. These records will show potential buyers how much your business has prospered and give them a good idea of its future potential. 

Next, you will want to look at your operations from an outsider’s perspective. If your business is turnkey and will not require long hours or extensive hiring for the new owner, then it is inherently more valuable and easier to sell. Have you developed a loyal base of customers? Do you have marketing in place to acquire more? Are your employees happy at work, and do they do a good job? Will the existing team be able to continue providing great service to current and future clients, even if the company is under new ownership? Does your business have solid relationships with important vendors and other third parties, separate from you as the owner? Do you have thorough written policies and procedures, handbooks, and training manuals ready to go? Have you secured valuable intellectual property, like your business’s name and logo?

Taking these steps can enhance your business’s value. When the time comes to determine a sale price, you can choose from several methods of valuation. These may vary by industry, especially if your business is unique, but in general you can use annual revenue as a way to determine your business’s value. One common calculation looks at recent sale prices of similar businesses compared to their annual revenue. You can price your business based on these sales by plugging in your own financials. Then you can examine your business’s other strengths, like the soft factors described above, to determine if buyers might pay an additional premium. A professional business valuator can offer assistance in obtaining a fair and appropriate valuation that you can trust. 

Finally, it’s important to discuss your plans with a team of experts, including an accountant, an attorney, and other trusted advisors, like a mental health professional or business coach. You might discover that it does not make financial sense to sell your business at this time. Maybe you can find another way to step back if you are suffering from burnout or lack of interest. If the time is right, though, then your team will help you through the next steps. If you are interested in learning about my experience as a corporate law attorney assisting business leaders and entrepreneurs in our community, please email me at mcannon@cplspa.com or call me at 407-647-7887.

As an employer in our community, you are responsible for cultivating a positive working environment for your team. Not only is it the right thing to do, and it will therefore bring significant personal satisfaction to you as a business leader, but it’s also a vitally important step you can take to protect your business interests. Let’s take a look at some strategies you can implement today to improve your workplace environment and culture. 

• Create (or update) your employee handbook

Your handbook is not a “set it and forget it” type of document. It must be reviewed and updated with regularity to ensure you are complying with all of the latest recommendations and requirements. Furthermore, you should take care to make the handbook easily accessible to your employees. Ideally, you would provide each of them with a hard copy on their first day of work, along with an electronic version that can be updated as needed and accessed anywhere, anytime. These written policies and procedures are essential for keeping your business running smoothly and protecting you from liability. They help you set the tone and establish expectations for how employees behave in the workplace.

• Lead by example

Your employees are looking to you to set the bar in terms of how they will interact amongst themselves and with your clients, vendors, and other important third parties. It is key to have a leadership team in place that is not only competent but kind as well. Workplace culture starts at the top, and by treating your team with the respect they deserve, you can create an environment that is both productive and pleasant. Take care to demonstrate the behaviors you want to see in your employees, such as being patient, polite, and helpful, and seek out managers who share your values. 

• Conduct exit interviews 

When employees leave your business, do not miss the opportunity to review the details of their experiences working for you. Even if you sense some unresolved tension in the employment relationship, that is all the more reason to investigate what went wrong and why your employee has chosen to seek work elsewhere. These insights will help you to retain current and future employees, avoiding the significant time and financial burdens of the hiring and training processes. Do not be afraid to ask for feedback from employees who are on their way out. It may be humbling, but it will ultimately help you to excel as a business leader and as an organization. 

• Hold training and other events

Once a positive culture is in place, you can maintain it by holding development programs on relevant topics like workplace civility, stress management, and communication skills. The benefits of these are twofold: first, the direct results of the training, and second, the overall values you are able to demonstrate, like caring about your employees and being committed to providing a respectful work environment. Another good idea is to hold events specifically for the sake of employee appreciation, whether it’s a weekend of travel to a seminar with all expenses paid or a simple Friday afternoon pizza party in the break room. 

• Review your hiring and onboarding procedures

Another important way to establish a healthy workplace culture is to hire people who align themselves with your values and whose personalities will help you foster cooperation and harmony on a broader scale. The interview process is a key part of identifying the right fit for your organization. Some candidates look great on paper, but even applicants with the best qualifications may have a negative attitude that could be disruptive or even destructive to your business. When you do find the right people for the job, ensure that your training process will make them feel comfortable and welcome. Consider assigning a designated mentor, whether that person is a peer or a more senior leader, to go to for help as needed. 

These are just a few ideas to get you started with developing and improving the culture in your business environment. The possibilities are endless and can be tailored to your unique concerns and challenges. You have the power to implement positive changes that will increase employee satisfaction and protect your business operations, and you can start today. If you are interested in learning about my experience as a corporate law attorney assisting business leaders and entrepreneurs in our community, please email me at mcannon@cplspa.com or call me at 407-647-7887.

One of the most important assets you will acquire as a business owner is your roster of clients and customers. These relationships often take years to develop and are the foundation for everything you do. Satisfied customers play an important role in helping your business prosper by returning to you for repeat business and by referring their friends and family to you. 

If you are a service provider, how can you take action to protect these valuable relationships? Ideally, you will enter into them with a clearly-defined Client Services Agreement specifically tailored to you and your business. By providing your customers with a detailed written agreement outlining the scope of your services and other important terms and conditions, you are setting your work relationships up for success.

Through your Client Services Agreement you can set clear expectations, making it easier to prevent any potential disputes in the future. Should a conflict arise, you will likely be able to refer to your Client Services Agreement to provide clarity and context to the issue at hand. This helps you provide your customers the best and most comfortable experience possible, even in the event of an unforeseen conflict.

Some important terms to consider including in Client Services Agreements across various industries are: a detailed description of the scope of your services (i.e., what is and is not included); the amount of your compensation, when it is due, and the method of payment; a timeline of when the services will be performed; and any necessary waivers to protect you from liability in the event of personal injury or property damage. Depending on the exact nature of your business, a knowledgeable corporate attorney can make additional, more specific recommendations.

Your Client Services Agreement also has the added benefit of enhancing your credibility and reputation as a business leader. By presenting a well-written agreement that makes both sides feel thoroughly informed and protected, your business increases its authority and trustworthiness with your customers and in the community at large. It demonstrates that you care about your relationships and have taken proactive steps to nurture confidence and trust.

Although a Client Services Agreement is legally binding, it does not need to be excessively formal or confusing. In fact, many experienced business attorneys understand that simplicity and transparency are essential for this type of agreement. Whether you are an athletic trainer, landscaper, web developer, or accountant, most of your clients are likely to want the same thing: an agreement they can easily understand, with terms that are thorough and fair to both sides. The right agreement makes them feel comfortable starting a relationship with you now and continuing to work with you in the future.

Are you in need of a Client Services Agreement for your new or established business? If you are interested in learning about my experience as a corporate law attorney assisting business leaders and entrepreneurs in our community, please email me at mcannon@cplspa.com or call me at 407-647-7887.

As a business owner, it is essential to protect sensitive information, customer lists, and other valuable assets through the use of corporate agreements: non-competes, confidentiality agreements, and the like. Prevention is truly the best medicine in this case, and attorneys who are experienced in the business sector are likely to recommend executing these agreements whenever possible.

What happens, though, when an employee or other third party violates one of the agreements you have in place? A lot is at stake for you as a business owner. Your business is not just your livelihood, but also a large part of your identity. Of course such violations can stir up feelings of disappointment, betrayal, and insecurity. So what is the best way to proceed? Should you always take legal action when a former employee goes to work for one of your competitors, or a vendor discloses privileged information to another business similar to yours, despite the agreements you carefully put into place to protect yourself?

Some attorneys may be too eager to pursue litigation, driven by their own business interests instead of your own. Litigation can be time-consuming and unpredictable, which means it can be almost limitlessly expensive. Financial considerations are not the only roadblock, however. Corporate law attorneys should also emphasize to business owners that all potential litigation must be assessed to ensure that the benefits outweigh the risks. For example:

Business A, a veterinary hospital, has a non-compete agreement with Employee A, a kennel tech and the single mother of two pre-schoolers. When the employment relationship ended, Employee A immediately sought and obtained another job in the same field and the same geographical area, despite the non-compete she had previously signed, in order to put food on the table for her two children. Even though it is frustrating to lose an employee to a local competitor, the public relations consequences of suing a struggling single parent will almost certainly outweigh any possible benefit of restricting Employee A’s ability to work in the field.

Let’s say Employee B recently quit his job due to a hostile and discriminatory work environment. Unfortunately, Business B recently learned that its managers were treating certain employees less favorably based solely upon their race. After resigning, Employee B promptly disclosed several trade secrets during his search for a new job, violating the non-disclosure agreement he had entered into with Business B. Instead of charging ahead with litigation, a thoughtful attorney will investigate all of his potential counterclaims, which may be much more catastrophic to Business B and its owners than the confidential information that has already leaked.

The attorneys at CPLS, P.A. are here to offer assistance with 1) drafting and executing protective agreements between employers, employees, and other third parties, and 2) advising business leaders of the best course of action to take when an agreement is violated. Always take care to weigh public relations and risk management considerations against any potential litigation you are considering as a business owner. If you are interested in learning about my experience as a corporate law attorney assisting business leaders and entrepreneurs in our community, please email me at mcannon@cplspa.com or call me at 407-647-7887.