Avoiding Three Common Gray Rhino Events in Running Your Business
Many of us have heard of “black swan” events in the business world. The hallmark of a black swan event is that it is surprising and shocking at the moment that it occurs, but in hindsight, everyone begins to think, “We all knew it was going to happen.” Stock market corrections are often called black swan events.
A different kind of danger to your San Diego business is called a “gray rhino event.” These are actually quite common and tend to be more dangerous for your business than a black swan event (as one would expect from a charging rhinoceros). These are destructive events that are fully known and foreseeable but that — for various reasons — are not prevented. Now, many might think, “No way, that would never happen!” But procrastination is part of human nature. How many of us see the “check engine” light and ignore the warning for a day or two or for a week. We all think, “Just one more errand” or “Just a few more miles.” This is perfectly normal as looming problems often seem overwhelming, requiring a lot of labor and attention that is currently focused on other matters. With business gray rhino events, often the solution is to get some help from, say, your trusted and proven San Diego corporate attorney. Here are three common gray rhinos that experienced legal counsel can help you avoid.
Failing to Incorporate
For startups and new businesses, one of the biggest gray rhinos is failure to create a corporate entity through which to run the business. You know it needs to be done. You understand that creating a corporate entity will protect your personal assets and the assets of your family. You may even fully understand that the corporate entity will actually help your business grow since the “Inc.” or the “LLC” on your business name enhances business reputation and customer loyalty. Many are the excuses:
- “Too much of a hassle”
- “It’s not really necessary”
- “I am busy running the business”
- “I don’t have the money”
- “I don’t know how to do it.”
- And more
Deep down, you know this is a gray rhino charging at you, your family and your business. One slip and fall accident or a deal-gone-bad, and a disaster results. An experienced corporate attorney can walk you through the process and ensure you are forming the entity that will be the best fit for your needs.
Not Drafting an Owners/Founders Agreement with Buy/Sell Provisions
Another gray rhino that is dangerous for your San Diego business is not having an owners/founders agreement for your small, closely held business. Of particular importance are the buy/sell provisions. The same excuses are used to avoid “having to deal with” negotiating the agreement with the addition of “it will cause a fight.” Yes, maybe — but better to have the “fight” now and while everyone is getting along than to end up “fighting” in a courtroom. A great corporate attorney can slay this gray rhino.
Not Protecting Your Intellectual Property
Another gray rhino is not taking the steps necessary to protect your business’ intellectual property like trade secrets, trademarks, and copyrights. Again, the same excuses are made and again, deep down, you know you needs to get it done. Your trusted corporate attorney can help with the registrations, and can cut the “rhino” down to a manageable size so that intellectual property protection is routine and not ever “looming.” That is the way intellectual property protection should be — routine.
Contact San Diego Corporate Law Today
For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard provides a full panoply of legal services for businesses formation of corporate entities, trademarks, the review and drafting of buy/sell agreements and other business contracts, and much more. The San Diego Business Journal has honored Mr. Leonard as “Best of the Bar” for four consecutive years. Call Mr. Leonard at (858) 483-9200 or contact him via email.