Entrepreneurship 101: Starting a Successful Business

To launch a successful business, the entrepreneur needs resilience and knowledge of customer, market and niche – vital need this product or service fulfills and its value to the customer.

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Temple Shalom Brotherhood, Newton, Massachusetts , January 24, 2011

What it takes to be an entrepreneur

          • Steps to launch a product business               

          • Legal Aspects of startup companies

          • Steps to launch a service business

          • Consulting to get a job

          • Joining a startup venture

By Robert A. Adelson, Esq.

Entrepreneurial Profile: Do you have what it takes?

1. Introduction

          • High Rate of Startup Failures

          • Hard to Succeed

          • Don’t start for wrong reasons

2. Passion for your business

          • Commitment, sacrifice, confidence

          • Optimism, reasons why it will work

          • Resilience

3. Knowledge of your market and place

          • What is really unique about your business

          • Need: Selling morphine, not vitamins

          • Business Model

           • Where are you playing: dominance over your market

           • Recurrent Revenue-fixed cost leverage

           • Competitive advantage

4. Working with others, Facing Change

          • Sharing, fairness, team building

          • Adapt and change-learn and grow from your mistakes

          • Scaling the business-including when to fire yourself

5. Putting yourself out there, on the line

          • Giving of yourself

          • Networking

          • Relationship building, nurturing

Launching a Successful Product Business

1. What is a Successful Business

          • Producing good return to you and your stockholders

          • More money coming in than you are putting out

2. Have a Plan: How will you create value for others

          • Find a “pain” in the market – providing a solution

          • You can’t create demand-  you want to fill supply

          • Establish your brand based on filling a compelling need

3. Know your customer, know your market

          • Start local and build – small, fast, cheap

          • Keep testing-figure out what works and doesn’t

          • Keep your database, access it

          • Develop a sellable model/market and test product

4. Build a company

          • LLC a corporation- entity, limited liability, credibility

          • Stock for others

5. Build a team

          • Equity and fairness; share success

          • Convince others to join you – seek good fit

          • Build a Board of Advisors or Directors – Key resource for you

6. Build a prototype, sell something

          • It doesn’t have to be perfect

          • Selling-feedback and gets $ coming in

          • Establish further proof points of viability, credibility

7. Develop and protect your IP

          • What you can protect and what you can’t

          • Strategize IP protection- IP assets

8. Bootstrapping and Commercial Contracts 

Legal Aspects of Launching a Product Business

1.  Choice  and Formation of Business Entity

          • Business Merits of Corporation (S or C), LLC, LLP

          • State of Formation, Qualification of foreign entity

2.  Taxation of Business

          • Double v. Single Level taxation; payroll taxes

          • Pass Through of losses / income;  1202 stock opportunity

          • Complexity of capital structure

3.  Intellectual Property and Proprietary Protection

          • Patents  – Provisional and full utility patent

          • Trademarks – ITU and use based filings

          • Copyrights and Trade Secrets

          • Assignment of rights and NDAs

4.  People – Contracts among Service providers and Owners

          • Employees / Contractors, consultants, “Virtual Companies”

          • Board of Advisors / Board of Directors

          • Equity Participation – Options, Restricted, Phantom stock

          • Shareholder Agreements – Share transfer, management, succession

5. Products and Markets

          • Production Arrangements / Supply contracts

          • Sales / Distribution – Dealer contracts, sales terms

• Product and IP licensing

6. Money:  Raising Capital and Securities Law Compliance

          • Bootstrapping, family and government grants

          • Angel and Venture Capital Finance / Securities law compliance

          • Loans, collateral, guarantees and debt finance

7. More:  Other important legal aspects of your business

          • Home;  Office / facility and store leases

          • Zoning and environment regulations

          • Regulatory compliance for your products

          • Business insurance

Launching a Service or Consulting Business

1. Your Market: Research and Determination

          • Self Skill assessment (“looking in mirror”)

          • Who are your customers? Finding them…

          • Listening to customers/match skills to need

2. Selling Service and Selling Yourself

          • Selling Payback you can deliver customer

          • Promotions – articles, talks, advertising …

          • Lead Generation, building your network

3. Building a Trade Name and Identification

          • Name, Logo for Recognition / Distinction

          • State, Federal trademarks as bus. Assets

4. Compensation, Pricing & Collection Planning

     • Fees- By Rate, Commission, Lump sum

     • Payment Installments – Periodic, Milestone

     • Security – deposit, Security Interest, Penalty                              

     • Reimbursement or Payment of Expenses

     • Currency of Payment – Cash, Stock, Other

5. Production, Costs and Delivery of Services

     • Quality Control; Repeat Bus, best marketing

     • Cost Control, start small

6. Sales and Limitations on liability to customers

     • Sales Terms to limit commitment, Forms Battle

     • Upfront Liability Bar: Corp, LLC in operation

     • Backend Liability protection via insurance

7. Staff, Subcontracting & Handling Overflow

     • Staff & contractors to expand capacity, reach

     • Subcontracting work Terms & Non-poaching

Consulting as Tool to Secure, Evaluate Full-time Jobs

1. Leave Firing Range (rejection bullets) to talk payback to CEO

2. Expanding your Window of Opportunity with cash from consulting: added staying power

3. Expansion to Deal Flow via added flexibility to take part-time or try-out situations (employer’s chance to sample the milk..)

4. Paid Due Diligence – your chance to learn more before you commit to full-time offer

5. Keeping offers open – delay for alternatives or sweeten offer; employer still gets work

6. Add to Skill-set; Keep current, sharpen skills

7. Something new to talk about – recent, current work experiences to relate in interviews

8. Fall Back – a consulting practice is your own to which you can return as jobs shift

9. While consulting is not for every executive or may be no substitute for a full-time job in many cases it can offer a stop-gap and add to your options as you seek that job.

   Joining a Startup Company

1. Knowing the score

          • Low odds of success

          • Other Alternatives

          • Valuing your Money & Time

          • Non-Monetary Benefits

2. Picking a Winner

          • Team: Knowledge, Experience, Contacts

          • Marketing Plan: Addressing real Need

          • Business Model / scalable

          • Barrier to Entity

          • Likelihood of Finance; Exit strategy

3. Doing your Homework

          • Website & Marketing materials

          • Resumes and Interviews

          • Reference Checks

          • IP Due Diligence

4. Protecting Any $ Investment you make

          • Private Placement memorandum

          • Financial Statements

          • Preferred Stock position

          • Investor Protective terms

5. Protecting Employment / the services you provide

          • Signup Bonus

          • Meaningful Equity

          • Defined Responsibilities

          • Coverage of your Expenses

          • Severance Terms

ABOUT THE SPEAKER AND PRESENTATION

            These materials were prepared by Robert A. Adelson, Esq., Partner at Engel & Schultz, LLP, 265 Franklin Street, Suite 1801, Boston, MA 02110, (617) 951-9980 begin_of_the_skype_highlighting            (617) 951-9980      end_of_the_skype_highlighting.        Fax (617) 951-0048. Email:radelson@engelschultz.com  Website:  www.engelshultz.com  

Blog:  https://robadelson.wordpress.com/

            Mr. Adelson is a graduate of Boston University, Phi Beta Kappa and Northwestern University Law School in Chicago where he was a member of  Law Review.  He also has an LL.M. degree in Taxation from New York University and is a member of the Massachusetts, New York and US Tax Court Bars.

Robert Adelson began his legal career in 1977 as an associate at major New York City law firms, first Dewey Ballantine and later Weil Gotshal & Manges, before returning home to Massachusetts in 1985, where he has been a partner at several Boston firms before joining his present firm as senior business law partner in 2004.  Mr. Adelson is specialized in corporate, taxation, contracting, employment and intellectual property law.  In those areas, he frequently represents entrepreneurs, startup and smaller companies. He also represents executives and consultants in employment, contracting, liability and severance matters, and family business with phantom stock and succession planning.

Mr. Adelson’s law firm, Engel & Schultz, LLP, is a small but broad service law firm of 6 attorneys in Boston.  The firm complements Mr. Adelson’s work in business and tax law with seasoned attorneys in litigation, real estate, family and probate matters. 

Mr. Adelson is a frequent speaker at business forums and Chairman of IEEE Boston Entrepreneurs Network www.boston-enet.org and a Board member at 128 Innovation capital Group www.128icg.org .  Further information on Mr. Adelson’s background and his past published articles is available at the Engel & Schultz LLP  law firm website.  To view many of Mr. Adelson’s past articles, see http://www.engelschultz.com/index.php/category/publications/ 

Mr. Adelson has been a member of Temple Shalom for 14 years.  His son William and daughter Kathryn were bar and bat mitzvahed at the Temple.  The speaker wishes to thank Allan Cole and the Brotherhood of Temple Shalom of Newton, MA for the opportunity to speak on  “Entrepreneurship 101:  Starting a Successful Business” at Temple Shalom, 175 Temple St., Newton, Massachusetts, on January 24, 2011.

The purpose of these materials is to offer an outlines on the subject matter of the Entrepreneurship for those considering forming or joining a startup company or advising others on that prospect. Thus, it is hoped these materials will be informative to those in attendance.  These materials are not legal advice and not intended as any substitute for professional advice or counsel in a particular case.

(c) 2011  Robert A. Adelson

Author: radelson

Robert Adelson has been a corporate and tax attorney since 1977. He began as an associate at nationally prominent New York City “mega” law firms, first at the Wall Street firm Dewey Ballantine Bushby Palmer & Wood and later at the Park Avenue firm Weil Gotshal & Manges. In 1985, Adelson returned home, where he has since established himself as a respected Boston business attorney. He has attained partner at several small and midsize Boston law firms, most recently at Lawson & Weitzen LLP and then Zimble Brettler LLP, where he was a partner from 1994 to 2004 before becoming a partner at Engel & Schultz LLP.

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