10 Mistakes

being is business is tough. The statistics show that about half of all new businesses will fail within the first five years. Of those that survive approximately one third of those remaining will fail by the 10th year. A business is a risk not only economically and operational but also in the “fine print”.

1. The failure to organize the business entity to separate the business liabilities from your personal ones. It is very important that even as a sole proprietor you create an LLC or an Inc. This business entity needs to be documented and submitted to the state before you actually open for business.

2. A well drawn up business plan is an essential road map. You may have the biggest, brightest and best new product or service, but without a guide you can get sidetracked very easily. Determine the market (and it is not everyone!), the costs and profitability potential, sufficient cash flow on your own or will you need outside capital to start. All the questions need to be answered.

3. Compliance with employee hiring practices. You not only need to find the right people, you also need to know the legal relationship between you and your staff. There are state and federal compliance regulations to follow. Are there non-competition and non-solicitation agreements? What will the impact be?

4. Protecting intellectual property and trade secrets. Many business owners lump everything together under one umbrella. It is important to take the time to distinguish the different types and determine how best to protect each one individually. Patents protect ideas or concepts, whereas trademarks protect words, designs or phrases, copyrights protect creative expression such as music, books and video (something tangible), and finally trade secrets protect a product’s commercial information (think the Coca-Cola formula). All need to be documented and filed, however a patent is a longer more detailed process and a trade secret requires that no information about the product be discussed by anyone who has access to it.

These are just a few of the many legal steps that need to be taken when starting a business. Don’t be scared to fill out the paperwork. It may take a lot of time upfront but will save you a lot more time later on. Much success!

pschultemarketing@gmail.com

The Trademark

When you began your business, did you research your company name on the USPTO website. The US Patent and Trademark Office should be the first stop on your journey. What is a trademark anyway? Is there a difference between a trademark, a patent, and a copyright? Here are some answers:

1. A service mark and a trademark are the same thing depending upon you type of business. Generally this is a word, a phrase, a symbol (think Nike), or a design that is going to distinguish your goods and services from someone else.

2. In protecting you company from “poachers” what would be your main goal? A trademark, a copyright and a patent protect different aspects. The trademark typically will protect the brand name and the logo used on goods and services. The copyright is a protection for original works of literature or art. The patentis used for an invention. You  may be using one type or all three depending upon your business model.

3. With the addition of social media and other online content you also need to protect you business in cyberspace. A domain name and a trademark are not the same thing. Because the trademark is an identifier of goods and services coming from a particular source, the use of the company name for a website address does not qualify as a source.

Registration of a domain name does not give you exclusive trademark rights. You may find out later that you are infringing upon someone’s existing trademark. On the flip side, creating a company name and using it does not necessarily qualify as trademark use either. Anyone can register to do business in a state with a particular name just by filling out a few documents. If no other company has filed to use that exact name in that state then you will likely receive your business authorization. This, again, does not give you trademark rights and other parties from other states can pop up and prevent you from doing business.

It is essential for you to search the USPTO first before starting a business. If there is any chance that the name you have chosen will conflict with a company listed through the USPTO then think of a different name. The expenses you will incur to change everything once you have business cards printed, website up and running and ads on television can be enormous if you are an infringer.

Don’t be the infringer on someone else’s business. Make your brand unique and create opportunities with the name such a licensing (that is another topic to be discussed later!).

pschultemarketing@gmail.com, http://truffleupagus.ecrater.com/