For entrepreneurs, there always seem to be 5 hands out for every dollar you make. Most people find it easy to invest in sales and marketing because it’s easy to measure the impact. You put $1,000 into Facebook ads and get two new clients who pay you $1,000 each- you can tell exactly what impact that expense has had on your business. Also, if you’re anything like me, it’s just more fun to spend on a new website or fancy new brochures.
In contrast, investing in the less fun parts of a business, such as legal protection or getting an accountant, is significantly less fun and famously hard to commit to, especially when your business is now getting started. You know that investing in good contracts or incorporation would help you if you were ever sued, but that’s a what if, far (hopefully) into the future. You’ll get to it later.
There is, in fact, an easy way to measure your return on investment when you invest in legal services and it goes hand in hand with your dreams for your business.
When you’re next deciding on what to invest in, think about what you want for your business, how much revenue it would drive and whether you can afford to lose those opportunities because you don’t have the right legal strategies. Maybe you have an amazing retail concept and have been asked to consider franchising, but you haven’t protected your tradename, so no one is willing to pay you to use it. Or maybe, you’re building your business with the intention to sell it but the important contracts that bring in all the revenue are all based on handshakes and are with you personally because you’re not incorporated so that business you’re spending all your waking hours building isn’t transferrable.
In the same way that you can lose opportunities if you drive new business but then can’t service the influx new customers, you can lose out on your dreams if you don’t have the right legal structures and strategies in place. Or, as my client ultimately realized, if you invest in the roof now, you can buy many Louboutins with the rent from the comfy and dry tenants later.