As you may recall from our blog on February 28th, on March 13 Offit Kurman President and Managing Principal of Legal Affairs Tim Lynch and several other local speakers – Belinda Sloot, CTP, Senior VP, Bank of America; and Michael Gentry, Shareholder & Co-Chair, KatzAbosch – took part in the Baltimore Business Journal’s “Knowledge is Power” Quarterly Breakfast Series: How to lead your Company through Legislative and Marketplace Changes. Offit Kurman was also a co-sponsor of the discussion.
Below, we recap that discussion.
Business Litigation Attorney at Baltimore Business Journal Discussion
Sloot, Gentry, and Lynch discussed several concerns for entrepreneurs and start up owners, including cash and investment money, and, of course, the legal side of things. Partnership Agreements: “It is important for early stage entrepreneurs to have a clear understanding in terms of agreements with partners,” said Lynch. “They have to have an agreement that sets forth how decisions are being made. Everyone thinks about the up side, which is sharing equity and profits, but what happens when cash gets tight? Partners don’t see eye to eye in that situation and it is vital that they have agreements in place to resolve disputes, and at the same time, allow for exits. Funding: “We advise clients to fund their new venture through equity, or consider working with banks or outside investors,” explained Lynch. “We try to negotiate a burn off [in the contract], that over time when you hit certain metrics, and the guarantee will come off on a percentage basis or over time. We advise some clients to get a line of credit and, from a planning perspective, implement asset protection. We want to limit the owner’s exposure. We may retitle certain assets that are outside the guarantee. If something goes poorly they do have assets that are shielded from creditor claims.” Managing Growth: “We tell our clients, if you want to grow you have to have vision, you need a strategic plan, because it is central to managing growth and expectations,” said Lynch. “That’s how you manage growth and ensure success. The plan has to be flexible enough to account for changes from whatever sector, whether it is economical, market driven, or political.” Social Media: “We found that with our clients, social media is an important part of marketing strategy,” said Lynch. “There aren’t any businesses that can ignore social media. Even a law firm needs social media, and that is traditionally not [a business] that would use social media for marketing.” Furthermore, Lynch advised business owners to educate employees about the risks and benefits of social media. Security and Data Breaches: Lynch advised smaller companies who outsource their IT needs to consider hiring a third party to check the security of their network. Compensation: “You need to align the compensation [of your sales team] with what you want your sales force to achieve,” explained Lynch. “There’s a big difference between growing revenue and growing profit.” Hiring the Right People: “You need to decide what kind of management you want, and the timeline you are trying to follow,” said Lynch. “Your leadership team needs to be on the same page and in order to hire the right people, we are strong believers in testing.” If you have any questions about the Baltimore Business Journal “Knowledge is Power” Quarterly Breakfast Series or any of the topics discussed in this article, please contact Offit Kurman business litigation attorney Tim Lynch at 410.209.6436 or firstname.lastname@example.org. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.