STARTING A NEW BUSINESS? HAVE THIS CONVERSATION FIRST
It can be tempting to chase a new offer, but think long term about your business and stay true to your mission and goals.
The secret to saying no is knowing not only when to say it, but when to say it right away. Saying no might mean you have to pass on one opportunity now, but it can open new doors for you later down the road. Be empowered by your ability to say no and use it to showcase the value of your work to others and to yourself.
SUDOKU
When starting a new business, many people realize the importance of creating an official business entity, e.g., a corporation, limited liability company, or limited partnership, to minimize their personal liability for unexpected events that they might come across. In the beginning, it can be difficult to imagine the gamut of potential issues you may run up against. Still, it’s important to plan ahead in every way possible — beyond simply filing with the state to set up your business. Among the thorniest of issues that can arise with a budding small business are internal problems, management issues, and interpersonal conflicts. For this reason, you and your business partners should discuss the procedure for such tensions in advance. It might seem difficult to broach this subject with the other owners, partners, or members; after all, no one wants to consider that starting a business can potentially result in a rift between friends or family. But it’s a vital discussion to have. If you set up clear expectations, duties, chains of authority, and even a possible off-ramp for you and the other partners, you may save yourself a heap of stress in the long run. Even in a small business that you start with personal friends or members of your family — perhaps especially in these circumstances — you need to create a governing document to establish each member’s rights and responsibilities. It is crucial that you contractually protect your rights and remedies in the company, particularly if you’re a minority stakeholder in the business. For decades, Texas law allowed a minority stakeholder in a closely held company to sue and seek a buyout when faced with an “oppressive” shareholder. This changed in 2014 when the Texas Supreme Court held that a minority shareholder has “no statutory right to exit the [business] venture and receive a return of capital.” This curtailment of shareholder rights can leave you stuck in a business where you don’t have any management authority.
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