“I can’t afford someone to explain it”, “It’s too long,” “it’s standard,” “I won’t understand it anyway,”“it can’t be changed” are just a few of the excuses not to read important legal documents.  Leases, purchase and sale agreements, and other forms of contracts, are but a few of these documents.  Hidden within them are provisions that can derail any enterprise and destroy any transaction.  You just can’t afford not to know. 

 

          I have the habit of asking the same first question to my business law students: Do you read every contract you sign? Most of them are above average in education and sophistication, yet the silence leads me to believe that they don't. They just sign. I try to convince them throughout the class that voluntary blindness is just not the way. I suspect most of us are the same way.  If you don't understand have someone that does explain it. Be safe!

 

          We live in the Information Age.  We are bombarded by information at every turn; however information does not reflect true knowledge. True knowledge requires an understanding of the matter with clarity to be able to discern the nuances of what road to take.  We must understand what question to ask before we can determine the right course of action.  

 

          These are some of the maladies that affect small businesses and entrepreneurs.  It is not surprising that small businesses close their doors within the first five years.  Gallop.com reports that 50% of all new businesses fail within the first five years.  (http://www.gallup.com/businessjournal/178787/why-new-companies-fail-during-first-five-years.aspx) Many entrepreneurs open their doors energized with the momentum and spirit of doing something new, special or innovative, but because they are not prepared for the realities of the business environment, they are forced close their doors within five years and call it quits.  They leave behind capital, resources and dreams.

 

          So what can be done, to avoid some of these pitfalls?  Two paths are available, the first is to become as informed with every aspect of the business.  There is no detail too small.  You must know the zoning laws that may affect your business.  Are you opening your doors in the right area?  Do you need a license?  What license and from whom do you get it? What is the best form of business you should take?  “One size does not fit all” in business formation.  There is a variety of business forms that fit some types of businesses but not others.  Do you know what is meant as the double taxation issue of corporations?  What do your agreements say and what do they mean?  Do you need to have workmen’s compensation coverage for your employees?  Do you need to discount taxes and other deductions from your agent’s pay? What is the difference between an employee and an independent contractor?  Is there any personal responsibility?  Are you risking home and treasure?  These and many other questions must be labored over, scrutinized and analyzed.

 

          If this is not what you were thinking of when you opened your doors, there is a second path.  The second path is to employ a professional who together can help you navigate the difficult environment.  Can you afford to take the second path?  -It depends.  Look around, ask friends and family.  Ask professional organizations such as the Florida Bar.  Here is a link to the Florida Bar Referral Service: www.floridabar.org/divpgm/lronline.nsf/wreferral6?OpenForm.  The Miami-Dade County Bar Association also has a referral mechanism.  Here is the link: https://www.dadecountybar.org/lrs-request-form/   If you need representation outside of the state of Florida search the web for out of state lawyer licensing agencies for the specific state. These are usually called by the name of the state followed by the word “Bar.” 

 

          Once you have a lead ask about the cost up front.  You need to find a partner who understands you and where you want to go with your endeavor.  According to Lawyer.com (http://research.lawyers.com/how-and-how-much-do-lawyers-charge.html ) a lawyer in a metropolitan area such as Miami-Dade County can charge up to $1,000 per hour.  Not realistic you say.  Well, you can find lawyers in the same area that will charge much less, you just need to ask.  Few small businesses can afford to have an in-house counsel to aid in the day-to-day affairs of the business.  Some time ago, a client looked at me and said “you are like my outhouse counsel.”  I didn’t know whether to be insulted or comforted for his realization.  The name is funny, but the purpose is solid.  This person can, for a small fee, help direct you in the right path.