Starting a new business? This is what your business lawyer will want to know.

I love entrepreneurs. They’re excited, energized, and optimistic. They’re brimming over with ideas, and want to make their vision reality. But they are usually unsure of how to get the most out of their relationship with their lawyer. They know that a lawyer can help “set up their business.” But what does that really mean? How can they get the most from their—on a startup budget?

I’ll share with you my agenda when I meet with new business clients. I think it helps us get the most out of our relationship.

  • Assemble your professional team. If you have an accountant, insurance agent, and banker lined up already, your lawyer should talk to them. And if you don’t have your team together, your business lawyer can help.
  • Think about governance. If there’s more than one owner, business governance is Topic Number One.  How do you make decisions? How do you divide responsibilities (do you have a “sales person” and an “operations person”?)? How would a co-owner exit if people stop getting along or don’t want to be involved in the business anymore? No nobody wants to talk about a business breakup in the “glow” of a new business—it feels about as romantic as a prenup before marriage. But you must do it.
  • Protect your name. Your lawyer can search the State of Michigan’s business filings to make sure that your name’s available. And he can reserve the name while you decide what type of business entity you are creating. You’ll feel especially smart if you do this before reserving a pricy domain name and printing fancy business cards.
  • Share your business plan. You know—the one that you prepared to get funding. A sharp business attorney wants to understand how your business works. That includes the services and products it makes, the economic model, and what your business will look like when it matures. A good business plan may prompt your lawyer to ask about routine business contracts, intellectual property that you need to protect, or sources of liability that you hadn’t thought about.
  • Identify routine contracts. This often falls by the wayside. When your lawyer drafts your “entity” documents, you should have him prepare your routine contracts and liability releases. This will reduce the friction, stress, and liability exposure that your business faces. And it’s a great value for your money: oftentimes that lawyer-drafted contract can be used hundreds of times.
  • Navigate the funding maze. Are you getting a traditional business loan?  Crowdfunding? Bringing in equity owners mostly for funding? Are you offering a personal guaranty on your loans? Offering additional collateral to the lender?  An experienced business lawyer may even educate you about which lenders have a good track record working with your industry.
  • Choose your form of business. You might wonder: Why did he put this at the bottom of the list? The answer’s easy: this is what you typically think of when you choose your business lawyer. Here’s what you may not have thought about: Are there tax reasons that I should use an LLC or corporation (have I asked my accountant about that)? Are there governance reasons for choosing one form of business or another? And what do I need to do to make sure I get the benefit of the business entity’s “liability shield”?

Some of these questions are tough! But if you ask them at the beginning, you will understand your business better. And you’ll be able to keep your focus on your mission—growing your new business and serving your customers.