Like many new business owners, you may find that your most valuable asset is your intellectual property. Unfortunately, that may leave you a bit confused. To help, here’s a quick overview on how to identify and protect your copyrights, trademarks, trade secrets, and patents.

COPYRIGHTS

Copyrights generally protect creative works including music, art, dance, and even computer code and business documents. If you create an original work, you’ll own the copyright to that work as soon as you reduce it to a tangible medium. Although not necessary, it is wise to register your work with the United States copyright office. Once protected, you can prevent other people from copying, displaying, distributing, and creating derivative works using your protected work (or anything substantially similar). The length of protection is usually the life of the author plus 70 years.

One of the most important things to keep in mind when copyrights are at issue is who owns the work. Generally speaking, the creator will own the work unless: (1) he assigns it to someone else in writing, (2) it was created for his employer, or (3) he created it as an independent contractor under a written agreement identifying the work as a “work made for hire.” Note: this third option is limited so you should always consider written assignments.

TRADEMARKS

When writing your business plan, you may include the perfect new business name and tagline. Those items, among other things are known as trademarks. They serve to distinguish your goods and services from the goods and services of other people in the market.

You gain ‘common law’ trademark rights the moment you begin using a unique mark in commerce. But it is usually a smart move to file a trademark application with the USPTO to shore up your rights nationwide. Once you have a valid trademark you can usually protect it for as long as you use it in commerce.

TRADE SECRETS

Among the many steps involved when starting a new business plan is signing NDAs with multiple parties. The reason NDAs exist, of course, is to protect confidential information. But did you know there are state and federal laws that can help too? Those are known as trade secret laws and they allow you to protect information which you protect as confidential and which provides economic value to your business due to its confidential nature.

The key is you must take reasonable precautions to protect the confidentiality of the information. This usually means only disclosing it to third parties that have a need to know the information and, even then, ensuring they sign an NDA. Further, you should use good data privacy policies such as firewalls and good passwords. For physical items, you should use safes and other protections. To the extent something is a trade secret, you can protect it for as long as it remains a secret.

PATENTS

Patents protect inventions, machines, processes, and similar things and are issued by the USPTO. To obtain a patent, your invention must be: (1) useful; (2) new; and (3) not obvious. An important consideration when you invent things is when to file for patent protection and the general advice is to apply as soon as possible. There are very strict grace periods and, in some countries, you lose your ability to obtain a patent as soon as you disclose your invention to the public. Once you secure a patent, it will usually last for 20 years.

HOW DOES THIS FIT INTO YOUR PLANNING?

This is quite a lot to consider. But it is important for you to think through these topics as you write your new business plan and get ready to launch your business. If you’d like additional help, you can sign up for the free Kauffman FastTrac program at www.fasttrac.org.

CONTRIBUTOR: Chris Brown, Founder and Attorney, Venture Legal

Starting and running a business is a journey.

And along that journey, you’ll likely be setting goals to help guide your personal and professional growth.

The key is to identify and set goals that, when met, will deliver results. After all, you have enough to juggle. You don’t want to waste time on vague or unattainable goals that do nothing to help you and your business grow and improve.

Instead, focus on setting SMART goals. Let’s first explore what they are, then we’ll give you a few examples to help jumpstart your own goal-setting process.

WHAT ARE SMART GOALS?

The SMART acronym dates back to November 1981 in Spokane, Wash., according to Project Smart. Consultant George T. Doran published a paper titled, “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives.”

SMART goals, in short, provide a results-oriented framework to goal-setting. Think back to your own experiences with goals or everybody’s favorite: New Year’s resolutions! You can likely pinpoint more than one occasion on which you set a goal and then had trouble meeting it. Or, if you did, perhaps that goal didn’t deliver the anticipated result.

That’s where SMART goals can help. Let’s break down the acronym:

Specific — Vague, open-ended goals are often an inhibitor to progress. For example, a goal of “I want to sell more product” isn’t specific enough. Try assigning a value and a timeline to the goal so that it becomes “I want to increase product sales by 25% within the next year.”

Measurable — If you can’t measure your goal, how can you be sure you achieved it? Setting measurable goals also helps if you’re looking at long-term goal setting. That way, you can periodically check your stats to see what progress you’re making. If you want to increase your year-over-year website traffic, for example, you wouldn’t wait a year to monitor traffic stats. Instead, you’d likely check in at least monthly to see if you’re on track to meet your original goal.

Attainable — This can be a tricky one for entrepreneurs, since so many of us are used to thinking and acting big! But when it comes to goal-setting, there’s a balance between a goal that’s challenging and one that’s simply unrealistic. Don’t set yourself up for failure out of the gate and, instead, think of what you want to achieve given your particular circumstances and limitations.

Relevant — It can be tempting to set long-term goals that will give you the added boost to make big things happen. Instead, ensure your goals are relevant to your current and near-term situation, not to mention to you and your business. It’s easy to get caught up with what others are doing, especially on social media, and think that you need to set several goals to modify your entrepreneurial behavior. Instead, stick with what makes sense for you and your business. After all, these are your goals!

Timely — Again, don’t look too far down the road when goal-setting. It’s fine to set some one-, two-, even five-year benchmarks, but the more timely your goals, the more likely they are to be successful. For example, if you haven’t yet brought a product to market yet, you’d want to focus on that before you set a goal to boost product sales. You can also think of “timely” goals as “time-bound” — in other words, give yourself a deadline. Otherwise, it’s easy to keep pushing that goal to the bottom of the “to accomplish” list.

3 TIPS TO MAKE SMART GOALS WORK FOR YOU

Now that you’ve got a grasp of what SMART goals are, let’s explore how to make them work for you and your business.

• Brainstorm first. Before you dive into setting goals, grab a piece of paper and a pen and indulge in a few minutes of brainstorming. Where are you right now with your business and professional skills? And where do you want to go? Making a list of things you want to focus on can help you identify where to start setting goals.
• Start small. We’ve talked about starting small and scaling up in other facets of your business, and goal-setting is no different. It’s often tempting to make a huge list of goals as you’re swept up by thoughts of what you’ll accomplish. Yet at some point, reality sets in, and the long list that once was invigorating now seems downright daunting. The trick is to start small. Set 1-3 goals, for example. Maybe you need to launch your website. Or you want to start an email newsletter. Or, on the professional development side, you want to start attending two networking events per month. Then, as you accomplish your goals, you can set more. And speaking of starting small: you don’t necessarily need your goals to hit every letter in the SMART acronym. If you can, that’s great. But otherwise, focus on at least three of those attributes, which will help you make more impactful and achievable goals.
• Document your goals. Whether it’s a notebook, a spreadsheet or a note on your smartphone, don’t forget to note your goals. That way, you can track your progress. No matter what goals you set, we’re betting you’re not going to achieve them overnight — and that’s good! Logging your goals not only makes them feel more official; you can also refer back to them and see how you and your business have grown. And if you don’t meet a goal, make some notes. What were the factors that impeded your success? Can you modify the goal for better results? Or did it highlight an area of your business that needs some attention? Your professional goals are very much a part of your entrepreneurial journey, so for both learning and posterity’s sake, it helps to record both goals and outcomes.

Ready to set a few goals of your own? Great news! And if you’re still unsure how to proceed, that’s fine, too. Instead, start with this goal: register for Kauffman FastTrac, a free online course that will help you launch your business. The self-paced curriculum includes a focus on goal-setting and just might be the inspiration you need to unleash your inner goal-setter!

Many entrepreneurs and business owners don’t think about trademark law until it is too late. If you are just getting started writing your business plan, you should think about it right now. If you’ve already started your new business, well, you should think about it right now too.

Here are seven critical things you should consider when thinking about your trademarks.

WHAT DOES A TRADEMARK PROTECT?

Trademark laws allow you to protect any name, logo, slogan, or similar branding element, that you use to distinguish your goods or services from those of your competitors. While many forms of intellectual property (copyrights and patents, for example) primarily exist to protect businesses, trademark laws exist to protect consumers. The idea is that consumers should be able to buy a product and trust that the product is coming from the company listed on the product.

HOW TO PROTECT YOUR TRADEMARK.

It is important to note that trademark registrations are highly encouraged (see below), but they are not technically required. Rather, courts will enforce trademark rights as soon as you begin using your mark in commerce. However, without a registration, your rights will be limited to the geographic area in which you use the mark.

Thus, it is almost always a good idea to file a trademark application with the United States Patent and Trademark Office. If approved, you can protect your mark nationwide.

HOW LONG DOES A TRADEMARK LAST?

Generally speaking, you can protect your trademark for as long as you use it in commerce. However, if you allow other people to also use it, you may lose your trademark rights. For that reason, it is important to police the market and stop other people from using your trademark without your permission.

WHY DO GOODS/SERVICES MATTER?

By way of example, think about Delta Airlines and Delta Faucets. Both are allowed to use “Delta” because consumers are not likely to think they are the same company due to their different areas of focus. However, if you were to open a business selling sinks and name it Delta, you may end up receiving a cease and desist letter from Delta Faucets since your company’s products and their products are similar in nature.

Thus, it is always important to consider what goods or services you’d like to tie your mark to since you will largely be limited to that area when you obtain rights.

WHAT MAKES A “GREAT” TRADEMARK?

For starters, you should avoid trying to protect generic and descriptive names because you generally cannot protect them. You’ll never be able to protect “Restaurant” for example because if you could, no one else would be able to use that word to describe their business. You can sometimes protect “descriptive” names, but that can be difficult (think about “Holiday Inn” for example).

What you should aim for is suggestive or arbitrary names. “Coppertone” for sunscreen is considered suggestive; while “Apple” for computers is considered arbitrary. In both cases, you’ll be more likely to obtain good trademark rights.

HOW TO RUN A TRADEMARK SEARCH.

Before adopting a name, you should always run a trademark search. You should start with the publicly available database available at www.uspto.gov. Assuming you clear that database, you should then search other government databases such as state trademark registries and non-public (common law) sources such as Google, Facebook, trade publications, newspapers, and elsewhere. This “common law” search is important because, as mentioned earlier, people can obtain trademark rights even without a federal registration.

Also note, while you can search on your own, it is usually best to hire a professional trademark search company to run your search. Their search will be more thorough than what you can do on your own.

WHAT CONSTITUTES TRADEMARK INFRINGEMENT?

Trademark infringement occurs when someone uses a mark in commerce and consumers are likely to be confused as to the source of the goods. For example, if you began selling computers under the name “Apple,” it is likely that your customers would assume you were selling them computers made by Apple, Inc., in California. If that confusion is likely, then the real Apple could use trademark infringement laws to prohibit you from doing that (and they might be able to seek damages too).

KEEP GOING!

Starting a business can be one of the most exciting things you ever do. However, as you can see, there are a lot of things to consider. Luckily, with the right help, you can increase your chances of success. In addition to the helpful tips above, you should consider taking formal classes to learn more. One such program is the Kauffman Foundation’s FastTrac program, which you can use for free at www.fasttrac.org.

In today’s increasingly digital world, your company’s social media presence isn’t merely a value add. Instead, it can be a powerful way to extend and support your larger messaging strategy — that is, when used correctly.

That’s the caveat. Correct — or optimal — social media use can be a struggle, especially for entrepreneurs who are trying to juggle 100 tasks at once. Social media management can, and often does, fall far down on the to-do list.

Social media channels are an effective way for prospective customers to find you and for you to share information about your company, your vision, and your story.

Instead of delving into the nitty-gritty details like what days and times you should post and how often, we’re going to take a step back and offer a more holistic approach to social media management. After all, you don’t have a lot of time to spare, which is why we want you to make the best use of the resources you already have.

Ready? Let’s go!

1. START SMALL.

It’s tempting to sign up for every social media platform. Don’t! Instead, pick two to three channels to start with. Frequent choices include Facebook, Instagram, Twitter and LinkedIn. As you decide where to start, think of your business and these questions:

• What’s your vision? Your voice?
• What products or services do you offer?
• What’s your message and how can you best convey it?

Answering those questions can help you decide what makes sense. For example, Instagram is an incredibly visual platform, so you’ll want to be sure you have plenty of photos and short videos to showcase. LinkedIn, on the other hand, is particularly effective for a B2B audience with a slightly more polished, professional tone than what you might use on, say, Facebook.

Keep this in mind: It’s always easier to scale up than scale back, and that includes social media marketing. If you start with too many channels at once, you risk fragmenting your message and not having enough time to devote to each platform. Social media marketing, like digital marketing, is an ongoing work in progress. You’ll always be testing, analyzing and refining. After several months, you may realize a particular social media channel isn’t working for your business. At that point, step away from that channel and pivot to another one. Lather, rinse, repeat.

2. FIND YOUR AUDIENCE.

As you decide which social media channels to activate, it’s important to understand where your audience spends time. Many social media marketing resources take a “one-size-fits-all” approach. That’s a helpful starting point, but paying attention to your customers and prospects is what will help you succeed. If you host any focus groups with members of your target audience, ask a question or two about what social media channels they use and where they enjoy hearing from businesses.

Another tip? Keep a close eye on your analytics. Use Google Analytics to monitor social media traffic to your website. Most social media platforms will also provide built-in insights. On sites like Instagram, you’ll need to make sure you’ve set up a business profile, rather than a personal profile, which you connect to your business Facebook page. Make a point to regularly look at your data, which will not only tell you what type of content is performing well, but also where your audience is interacting with your business.

3. CONSISTENCY IS KEY.

Unforeseen circumstances can prevent you from posting consistently.   You’re busy running your business and suddenly it’s been two weeks since you’ve posted on Facebook or shared an image on Instagram.

On the other hand, you don’t want to post for the sake of posting, which is why so much of social media marketing is about balance. To help ensure a consistent posting schedule, try these two things:

• Gather content before you launch.If you haven’t yet activated your social channels, take a few days to gather content before you go live. Create an easily accessible file on a tool like Dropbox or Google Drive where you can stash photos, videos, and other visual assets. Then, pair those with the holy grail of social media marketing: an editorial calendar.
• Build an editorial calendar. As an entrepreneur, you also wear the hat of a publisher — congratulations! You’re creating a lot of content, including for your social media channels. Building a calendar can help keep you organized and ensure you’re hitting all of your messaging pillars. You don’t need to start with anything fancy — you can build a simple spreadsheet in Excel or, better yet, Google Sheets so that you can share it with your team. Include quick content notes on your calendar — do you have products to feature? A sale or promotion to share? If you’re also blogging, you’ll want to be sure to share all of your blogs on your social media channels so that you drive people back to your website. If you get stuck creating content, look at what other businesses in your industry are doing. Are there widely used hashtags like #TBT (Throwback Thursday) that you could personalize to your company? Or look up silly national holidays that you can potentially tie in to your product or service. Creating social content really does get easier. As you find your groove, you’ll start to see ideas and inspiration all around you.

4. REMEMBER THE “SOCIAL” IN SOCIAL MEDIA

No matter your industry or business or what you post, remember this: be conversational. Social etiquette can get lost behind a screen, but at the end of the day, all social media channels are built on conversations. Picture a few members of your target audience as you create content: what do you want to tell them? Avoid constant sales pitches or you’ll quickly be perceived as spammy. And don’t be afraid to show some personality! We’ve talked before about the importance of every business having a story and a voice. Your social media channels are the perfect place to show people who your company is, why it exists and why they should do business with you.

5. TAP INTO TOOLS.

There’s no shortage of tools to help you manage and optimize your social channels. To track the performance of links in a place besides Google Analytics, try a link  like shortener Bit.ly, which will save your links and show you data like clicks, referrers and geographic location.

Management tools like Loomly, Buffer, and Meet Edgar automate functions like scheduling and can be a big help, especially if you’re struggling to find enough time to manage your social media. One note about scheduling: remember what you have scheduled and what it says. If, for example, a national tragedy strikes, it’s a good idea to disable any schedule posts to prevent being perceived as insensitive or dismissive to what’s happening.

To easily create polished graphics that are sized for a specific social platform, try using apps like Canva or WordSwag. For more in-depth photo editing, Snapseed is a robust option (also an app).

6. OVERWHELMED? OUTSOURCE!

There will likely become a point when social media management becomes too much for you or your team. In that case, consider outsourcing your social media marketing to a solo contractor or an agency. You can set up parameters for reviewing content prior to publication or attend regular meetings to discuss strategy and results. So, that you’re not completely removed from the process. Just be sure to carefully vet your prospective vendors and, if possible, equip your vendor with brand and messaging guidelines to help ensure consistency. And in the event that you discontinue a vendor’s services, be sure to change your social media passwords ASAP so that you know who has access to your accounts.

Here’s a final tip: if you haven’t yet fully developed your brand and marketing, you’ll want to do that before you dive into social media management. Your social channels should be a reflection and extension of your brand, which is why it’s so important to start with a larger marketing strategy.

And if that’s something you need help with, you’ve come to the right place. Simply register for Kauffman FastTrac, a free online course that quickly gets you up to speed on everything you need to know to launch a business, including identifying your brand and developing your marketing. When you’re done, you’ll have the insight and resources you need to tackle any challenges that come your way, including what to post next on Instagram!

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Walking Through Doors In Search of a Better Future

Business plans are the organizational backbone of a business, but not all businesses are planned. Sometimes, they form out of doing favors for friends. Kelly Wilson of Weave Gotcha Covered spent six months doing sewing work for friends before she realized she had a business.

Soon after that, Wilson enrolled in both FastTrac New Venture and FastTrac Growth Venture. Wilson said she had never owned a business before, so enrolling in these FastTrac programs got her excited to learn everything she could about starting a business.

“I can remember the very first day when I walked in,” Wilson said. “They said, ‘What is your exit plan?’ I had no idea what they meant. That has been a huge guiding force for us over the years because we now know what our exit plan is, so everything we do is aimed that way. Every other piece of the curriculum had equal importance, just in different ways.”

Wilson said she always tells people if a door opens, don’t ask questions; just walk through it. One day, while working at a local fabric store, a client walked in looking for new draperies. This client worked for a large local retailer, but the person who made their draperies smoked while doing so.

“I had just received my brand new box of business cards at lunch that day,” she said. “I’d gone home and I had them, and I brought them back to work. I walked back to my locker and I got the box, and I handed them to her. I said, ‘Here, I’d be happy to do your work for you.’”

That client became Wilson’s and her co-founder Lonnie Vanderslice’s strategical partner.

Weave Gotcha Covered, which provides custom window treatments, beddings and pillows, has been in business for 10 years, but it took some major knocking down of barriers to get where they are now. As a stay-at-home mom for 17 years, Wilson said she had only ever waited tables. Her side job of doing sewing work for people really was a necessity. Wilson said her family lost their home and everything they had from the first wave of fallout from 9/11. Rebuilding herself became critical, not just from an income standpoint, but from a personal one as well, between taking care of her family and working to provide for them.

Wilson said all of that is right below the surface of her daily work at her business. But in 2013, the business became an opportunity to help women struggling with similar issues Wilson herself went through.

The initial idea for Weave Gotcha Covered came out of a necessity for an income when she and her co-founder needed a way to make extra money. When they got to their hiring stage, which consisted mostly of women, they realized they had one thing in common with the women they were hiring – everyone was in need of nontraditional employment opportunities. The focus then turned to building a social enterprise.

“It gave [the business] an identity and it allowed us to start connecting with others that also do social work to solve society’s problems through business, and has given us more opportunities and paths to complete that work,” Wilson said.

After partnering with a local business woman who shared their mission, Weave Gotcha Covered moved from North Kansas City to the city’s urban core, closer to their employee base. This allowed the women they were hiring – individuals facing challenges such as children with disabilities or women reentering society, to name a few – a shorter commute to work.

“Everything else will take care of itself, but how do you make your community better?”

Wilson said they are always trying to figure out the barrier that is keeping somebody from getting a job. But identifying the problem is only the first step. If they are willing to hire people without the means to make it to work, they must provide a solution. For example, in the case of not having a car, Wilson said every employee’s phone has the Uber application so they have the ability for transportation.

“We have flexible schedules because people are working around all different kinds of challenges to balance life,” Wilson said. “While they can’t just come and go as they please, they do have complete flexibility in the schedule they have set.”

To create a social enterprise, Wilson said one must resonate with the idea behind Ewing Marion Kauffman’s philosophy of giving back to the community. Outside the work she does with her own business, Wilson is also active in the community, sharing with people how they too might create a social enterprise.

Wilson said if she can plant that idea upfront, entrepreneurs can keep that in mind as they’re working to start their own business.

“People look at me and say, “Why would you do that?,’” Wilson said. “At the end of the day, it’s not about how much money I can make. As a business owner, I have responsibility, I believe, to my community to provide jobs, to provide answers where I can. That’s what Mr. K was all about. How can you make your community better? Everything else will take care of itself, but how do you make your community better?”

At some point, budding entrepreneurs realize how much they need to learn. All the confidence and determination in the world won’t make up for a lack of knowledge.

Fortunately, there’s FastTrac.

The FastTrac curriculum combines educational content, interactive exercises and exposure to an impressive roster of subject-matter experts. Along with gaining the financial acumen and technical know-how to turn your entrepreneurial dream into a reality, you’ll tap a vast network of peers, mentors, and guest speakers.

What you value most about FastTrac will vary based on your needs and your stage of business building. Some FastTrac graduates benefit most from the skills and tactics they develop, from writing a business plan to identifying a market niche to setting financial, production or sales goals. Others say the highlight is forging relationships that open their eyes to fresh perspectives.

For Rob Drummond, FastTrac’s value takes many forms. He graduated FastTrac in 2003 before launching a management advisory firm.

“Entrepreneurs often underestimate the funds they’ll need,” said Drummond, now a certified FastTrac facilitator in Morgantown, Pa. “You have to figure out how to model the business and avoid undercapitalization. FastTrac has a module on getting different types of funders and showing them how you’ll repay them under various scenarios.”

Aspiring entrepreneurs often formulate an idea for a business without detailing how it will take shape or what actions they should take to move ahead. They may need guidance to advance from concept to launch.

When Sarah Schumacher took FastTrac NewVenture in 2011, she had already spent two years freelancing as a graphic designer and print broker. What began as requests from friends for wedding invitations and business cards turned into a full-time business.

“I never thought about what I liked doing most,” said Schumacher, founder of Cyclone Press in Kansas City, Mo. “FastTrac helped me figure out my target market: branding and consulting to help small businesses grow. If you’re serious about starting a business, FastTrac NewVenture is the best way to begin.”

By 2017, the demands of her growing business led her back to FastTrac. Some of the best takeaways from that GrowthVenture program came from guest speakers.

An operational expert distributed case studies of how founders of early-stage companies improved their internal efficiency. Schumacher continues to review the handouts, which include a workflow diagram consisting of flow charts that help avoid bottlenecks.

Another speaker, a strategic planning specialist, provided tips to boost productivity. Schumacher has applied what she learned by prioritizing her time and differentiating between the urgent and the important.

“Both speakers were FastTrac graduates who gave me tools that I use with my clients,” she said.

In some cases, a comment made in FastTrac can have a lasting impact. Many FastTrac graduates cite advice such as, “Work on the business, not in the business” as an ongoing source of wisdom.

Mike Mikeworth, a certified FastTrac facilitator in Abilene, Tex., says a particularly valuable tool is the business model canvas, a visual aid that guides entrepreneurs to refine their business model.

“It’s a grid where you answer lots of questions based on different building blocks,” he said. “It’s free with online FastTrac and it’s a popular resource.”

Another element of FastTrac that resonates with participants involves the drafting of policies and procedures that accelerate a young company’s growth. Many entrepreneurs start by doing everything themselves, and they eventually hire their first employee to lighten their load. With written policies in place, newcomers can hit the ground running with clearly defined rules, protocols and processes.

Mikeworth recalls a FastTrac graduate—the founder of a meat processing company—who benefited from documenting workflow procedures and standardizing job roles and responsibilities. Having a comprehensive set of easy-to-understand policies has allowed the founder to step away from the day-to-day business operation to engage in long-term planning.

“Because FastTrac helped her refine her company’s policies and procedures, she can give thought to her exit strategy,” Mikeworth said. “Now that she has applied what she learned and has these policies in place, she knows that she can sell the business and it won’t die afterward.”

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Two-Step Process to Review and Negotiate Contracts

If you want to become a successful entrepreneur, you’ll need to learn the ins and outs of reviewing and negotiating contracts. Sure, you can (and should) rely on contract lawyers to help you, but you also want to have a good understanding yourself.

In this post we’ll walk you through both steps: Reviewing a Contract & Negotiating a Contract.

HOW TO REVIEW A CONTRACT

The first thing to consider when you review a contract is what the deal should look like based on your prior conversations with the other party. If you don’t have a good understanding of the deal itself, then you won’t know what to look for in the contract.

Accordingly, you might sketch out a bullet point list of the key deal terms as you understand them. Then, skim the contract to make sure the overall deal is presented correctly.

From there, you can consider using these tips to help you narrow in on the specifics:

• Review the contract’s actions sections. These are the sections that should explicitly state what each party is obligated to do. For example, how much is being paid (and when are those payments due) and what is the other party doing (developing a website, painting a house, etc.).
• Read the rest of the contract. Although boring, this is important. You need to review all of the other sections to make sure you are not agreeing to something hidden in the terms. You’ll find that most formal contracts include various provisions that are “standard” and require each party to do certain things, promise other things are true, while refrain from doing other things.
• Consider if other terms are missing. After reading everything, refer back to your bullet list to see if anything is missing. Additionally, after you understand all the provisions you can then think through various what-if scenarios to see if anything else is missing.

HOW TO NEGOTIATE A CONTRACT

Many people struggle with negotiations; however, it doesn’t have to be hard or adversarial. Rather, many negotiations can be friendly and in most cases your negotiation will lead to a better deal and long-term relationship.

• First, ask questions. If you are confused about something in the contract or if you don’t understand why the other side included a particular provision, just ask the other side about it. Often, a simple conversation can clear up a misunderstanding and sometimes the other party will insert a provision by mistake.
• Understand your position. Sometimes you can negotiate a lot, especially when you and the other side are comparable in size/power. However, if you are negotiating with a huge corporation, you may not have much power to change things.
• Be reasonable. Often, signing a contract is just the starting point to your relationship. And if you are hard to work with during the contract negotiation stage, the other side may not even want to continue working with you.
• Be assertive. Subject to the above (be reasonable), always stand up for yourself. You should never sign a contract if its terms place too much of a burden on you or if it subjects you to too much risk.
• Make changes. Assuming you have the power to make changes, you should always do so if it can help you. If your changes are really simple, you might just communicate them in an email or conversation with the other side and ask them to make them. However, if they are not simple, you should consider using a redline tool such as Microsoft Office’s redlining function.
• Keep their language where possible. Although you should always redline a contract when needed, you should usually try to use the original language whenever possible. Although you may prefer your language, you should only delete entire sections and replace them with your preferred language if there is a substantive reason to do so.

LEARN MORE

 You’ll encounter a lot of contracts along your path to starting a new business and growing it into something larger than just you. But the more you understand about business in general, the better you’ll be at reviewing and negotiating contracts. If you’d like to learn more about starting a business, you should enroll in the Kauffman Foundation’s FastTrac program at www.fasttrac.org

CONTRIBUTOR: Chris Brown, Founder and Attorney, Venture Legal

Do you realize your true potential as an entrepreneur?

Sure, you’re starting and running a business — and that’s no easy feat.

But as an entrepreneur, you’re also in a position to make big things happen in your community, whether for other entrepreneurs or the people that live in and visit the place you call home.

To realize the most significant change (and impact), you need an ecosystem of similarly focused people who can help get things done.  And that’s why conferences like the annual Mayors Conference on Entrepreneurship are so important.

Before we tell you a little more about the Mayors Conference, let’s first take a look at what sort of change you can make.

HOW ENTREPRENEURS CAN HELP THEIR COMMUNITIES

There are two key ways that you, as an entrepreneur, can have a lasting impact on your community.

Make it easier for other entrepreneurs to get started: What does the entrepreneurial landscape look like in your city? Is it flourishing? Or is there an opportunity to make entrepreneurship more widespread and help more people realize their dreams of being a business owner?

Thinking about entrepreneurship on a larger scale can be intimidating. But take a step back and look at your own journey. What inspired you to become an entrepreneur? What resources or people did you find helpful? Where did you get stuck? Your firsthand experience is incredibly valuable when it comes to identifying both opportunities and areas for improvement.

Let’s say, for example, you decided to launch a retail business and you wanted a brick-and-mortar location. How easy was it to find and purchase the space? What sort of permits, licenses or other applicable documentation did you need from the city? Was this a fairly simple process to navigate, or was it wrought with complexities?

That’s the sort of thinking that will help expand entrepreneurship in your community. And if you do identify possible challenges at the municipal level, those can be a prime starting point. To explore options for overcoming challenges — such as making the permitting or licensing process more transparent and easier to follow — you’d want to talk to people in those departments, plus get feedback from other entrepreneurs. That’s how you start building an ecosystem. Then, with that information — and the skills and roles represented in the ecosystem — you can start to formulate an action plan.

Solve pervasive problems in your community: Entrepreneurs are becoming an increasingly valuable resource when it comes to problem-solving. After all, who better than entrepreneurs to efficiently solve problems? That’s Entrepreneurship 101!

In our hometown of Kansas City, we’re seeing innovative technology startups and improved data analysis focused around long-running problems that include community health services, graffiti tracking and removal, and pothole prediction. The City of Kansas City just weeks ago issued an RFP for a Comprehensive Smart City Partnership that’s focused on improving delivery of basic city services, digital access and resident health.

This is another example of a situation in which an ecosystem-based approach can be valuable and effective. Rather than isolating a discussion of a problem and possible solutions within one municipal department or among a group of concerned citizens, an ecosystem includes these voices and others. There’s more expertise to be tapped, more perspectives to be considered, and an increased likelihood that a tangible, effective solution will emerge. That solution doesn’t always need to be created by an entrepreneur, but there’s no doubt that entrepreneurs can be key members of an ecosystem.

That, of course, begs the question: how do you build such an ecosystem?

WHERE ECOSYSTEM BUILDING HAPPENS

Think of the range of people that conferences bring together: different roles, different skills, different geography, different perspectives. That’s why conferences are an especially popular starting point for ecosystem building, including the upcoming Mayors Conference on Entrepreneurship.

The Kauffman Foundation started this annual conference in 2013 to bring mayors, entrepreneurs and entrepreneurship experts together to discuss ways to promote startup activity and encourage higher levels of entrepreneurship in their cities.

Over the years, the immense amount of knowledge shared at these conferences has helped build an invaluable resource: the Entrepreneurial Ecosystem Building Playbook. The work that made this playbook possible also validated the importance of ecosystems and how they can impact a city’s long-term growth and economic success.

“These conversations reaffirmed our commitment to advancing entrepreneurial ecosystems as a model for economic development,” according to the playbook’s preface. “That model focuses on how the whole of a community is far greater than the sum of its parts. It means starting with what a community has and connecting the pieces. More than ever, we believe ecosystem building can transform communities of varying sizes, demographic and socioeconomic contexts, and geographies, and create more sustainable economies everywhere.”

Attending a conference like the Mayors Conference on Entrepreneurship is an incredible opportunity to not only understand ecosystems, but also become part of one. If you can’t attend, don’t fret. Explore resources like our playbook, then keep your eyes peeled for other conferences or opportunities that can help you lead the way when it comes to your own community’s ecosystem building.

You may not have realized that, as an entrepreneur, you’re uniquely positioned to not only take charge of your future, but also help determine what’s ahead for your city and neighbors. It’s a hefty responsibility, but also the opportunity of a lifetime. You dreamed big for your own business and made it happen. Now, it’s time to do the same for the place you call home.

Although entrepreneurial business growth hasn’t yet reached the explosive levels experienced during the 1980s and 1990s, it’s been on the rise in recent years. More good news? The rate of startup growth increased to 75.6 percent in 2017, which means startups are growing faster in their first five years than they did in the past, according to the 2017 Kauffman Index of Growth Entrepreneurship.

Yet despite that continued growth, being an enterpreneur can be isolating — even, at times, downright lonely. That’s why it’s so important for entrepreneurs to find their community. And there’s no better place to do it than at this year’s ESHIP Summit.

A QUICK OVERVIEW OF THE ESHIP SUMMIT

The ESHIP Summit, which launched in 2017, is a three-year initiative that’s “designed to bring together builders of entrepreneurial ecosystems. That way, we can collaboratively create tools, resources and knowledge to better support communities that empower makers, doers and dreamers,” according to the event website.

This sort of community-building — much like entrepreneurship itself — is an ongoing process. Yet the initiative culminates each year around the summit, an immersive, three-day event that gives attendees invaluable opportunities to explore, share and, most importantly, connect.

This year’s summit is particularly exciting because it’s the second one. During the 2017 ESHIP Summit, we kicked off a phase of discovery that included the identification of seven key insights.

In a matter of days, the 2018 ESHIP Summit will build on that foundation of discovery and begin a new phase: design. The plan: to “collectively deveop and test sustainable and scalable solutions to the most important needs in our ecosystems and across the ecosystem-building field.”

The importance of the work that happens during the ESHIP Summit can’t be understated. Yet the ability for entrepreneurs to attend events like these to find and build their communities is just as important, both for short- and long-term success.

WHY COMMUNITY MATTERS TO ENTREPRENEURS?

As an entrepreneur, you can look at community two ways. There’s your community or network — the people who support you, motivate you and provide invaluable help like referrals and feedback.

Then there’s the local entrepreneurship community. It’s more vibrant in some cities than others. Take the Kauffman Foundation’s home base of Kansas City, for example. The city (and larger metro area) is home to a thriving entrepreneurial community that’s fueled by technology-driven initiatives like the first municipal installation of Google Fiber.

As a result of that community, entrepreneurs have access to an incredible array of resources including programming like 1 Million Cups, financial assistance through grant programs like Launch KC, and general knowledge and tools produced by the Kauffman Foundation, including free online classes to help entrepreneurs start their businesses.

You see, an entrepreneurial community is about so much more than networking and building those personal connections. Don’t get us wrong — those are invaluable. But it’s equally important to do what you can to foster entrepreneurship in your community. Not only will that attract more entrepreneurs; it will also give those entrepreneurs more tools, more support and more leverage to ensure they have what they need to succeed.

Here’s a quick homework assignment. Do a quick Google search to see what entrepreneurial resources are available in your area and see if you can get a handle on what sort of entrepreneurial community exists. Then, keep an eye out for opportunities to improve that community. Even if you can’t attend this year’s ESHIP Summit, you can still be a part of the community-building process. One easy way is to sign up for the ESHIP Summit newsletter so you can be in the loop.

They say there’s “strength in numbers,” and that’s never more true than with entrepreneurs. If entrepreneurs can individually launch businesses, just imagine what we can accomplish when we’re all working together.

There are plenty of risks involved with starting a new business. Luckily, if you take the right steps to mitigate your risk, you can increase your odds of business success. Here are three tips to help you do that.

PURCHASE INSURANCE

The first tip is probably the most obvious. Purchase insurance. But what does that mean?

Long story short, you can purchase insurance to reduce financial liability to your business for specific things. You may consider some or all of the following policies:

1. General Liability Insurance: This policy will protect your business if you, your employees, or your products or services cause bodily injury or property damage.
2. Property Insurance: This policy will protect your business’ physical property against damage, theft, destruction, and the like.
3. Commercial Auto Insurance: This policy will protect your business’ vehicles against damage and collisions. If you don’t have vehicles, you might consider a non-owned policy to cover your employee’s cars if they are used for work purposes.
4. Workers Compensation Insurance: This policy covers employees who are injured on the job. (This is required in most states if you hire employees.)
5. Professional Liability Insurance: Sometimes called Errors & Omissions (E&O), this policy will protect your business if you provide a client with bad professional advice.
6. Directors & Officers Insurance: This policy will protect individual directors and officers if they provide bad advice to the company.
7. Data/Cyber Insurance: This policy will protect your business in case of data breaches, cyber hacks, and similar risks. It is becoming more and more important as everything moves into the cloud.
8. Key Man Insurance: If you or other people in your company are essential to the business’ operations, you may consider this policy to help the company if that person were to die.

USE CONTRACTS

In addition to purchasing insurance, it is always smart to use written contracts and to include provisions to allocate risk within those contracts.

For example, you can include a force majeure provision to limit liability due to acts of god. You can also include disclaimers and limitations of liability in your contracts to reduce the damages you may have to pay if you are found liable for breach of contract. You can also allocate certain risks to certain parties and require all of the parties to purchase relevant insurance policies and even name the other party as additional insureds on those policies.

Additionally, just having a contract in and of itself will help you reduce risk. The reason is that by going through the process of negotiating a contract, you and the other party are more likely to think through all the various “what if” scenarios. As a result, you are less likely to get into a dispute with the other party.

ISOLATE LIABILITIES

When possible, create new LLCs (or other business entities) to isolate liability. For example, if your business is going to purchase real estate, it is often a good idea to place the real estate in a different business entity so that liabilities resulting from the property won’t affect your main operations company.

For another example, if you are creating a joint venture with another business, you can create a new company which is co-owned by you and the other business rather than merging your two existing companies. That way, if things don’t work out, you can hopefully keep your original business going without too much harm.

NEED HELP CREATING A PLAN TO REDUCE YOUR RISK?

Another great way to reduce your risk is to rely on experts who have seen lots of things go wrong. And one place where you can find a lot of expert advice is within the Kauffman Foundation’s FastTrac program. By going through the online classes and tutorials, you can learn practical strategies to reduce your risk and improve your odds of success.

Learn more and register for free at www.fasttrac.org.

CONTRIBUTOR: Chris Brown, Venture Legal