COVID-19 UpdatesCall us today for help at 1-888-981-7509

Going Full Time with Your Side Hustle

Episode 20 -Going Full Time with Your Side Hustle

Welcome to the top Texas Lawyers podcast. This podcast is brought to you by the law firm Abercrombie and Sanchez PLLC.

Your hosts are Bryan Abercrombie and Samuel Sanchez. Bryan has been practicing law for 18 years and his board certified that sort of legal specialization in the area of family law. Sam has been practicing for 13 years, is licensed in both Texas and Florida, and is a certified mediator. This podcast is for informational purposes only and all views are the opinion of the hosts. It's not designed to provide legal advice for your particular legal matter, and it should not replace the advice of competent counsel. Welcome. And we hope you enjoy the top Texas Lawyers podcast..

Good afternoon and welcome to the top Texas Lawyers podcast. I'm your host, Bryan Abercrombie, and with me, as always, is my partner in crime.  Sam, how are you doing?

I'm not doing too bad.  Me, I'm definitely your sidekick, like Butch and Butch Cassidy and the Sundance Kid. I guess that makes me Sundance.

That's right. Anyway, so we're on today with a little bit of change in our format, a little bit. Going to go with a little video podcast instead of the audio, but I guess you can find it on audio if you need to. But we thought we'd show your your manly, good looking features.

Yeah, well, let's hope we don't scare too many people, but we've got some great stuff to talk about, so that'll that'll help.

Today we're going to be talking about small businesses and kind of the things to consider when opening a small business, because that seems to be a big, big topic of discussion for many, many people. Many people will be coming in and and people that I talked to, whether it's at my kid's baseball game or just passing them on the street or whatever, or clients coming in, they're starting small businesses. They want to know the ins and outs of small business. We have started a small business ourselves, but we've got some personal, real world experience with that. And we've got some some some helpful tips and advice on on that, too, as well.

Yeah. I mean, you know, obviously COVID era, you know, everybody's really considering a side hustle. Before, side hustles were like, how do you kind of like add wealth and income to the household, you know, on something maybe that you're interested that isn't your full time career, but now COVID, so many people are having to figure out, like, OK, well, I'm starting an online business. Or, you know, as an example, my fiancee, she's sitting there and she's created two new businesses. And these are all not just side hustles. These are actually things that she's investing a substantial amount of time. And so when you do that and they start to make money, you look at it and you say, wow, my site is my primary hustle. What do I need to think about what what what can affect me?

So the big question is, what happens when your side hustle becomes your primary, your primary business? That's really what we're talking about.

I mean, you've got everybody you've got stay at home moms that are no longer stay at home moms because their side hustle has become the big moneymaking opportunity, whether it's selling vitamins or eyelashes or makeup or I mean, there's so many different things out there in the market. Getting into the market is so much easier now than it probably ever has been. But with when it comes to social media and stuff like that, I mean, you've got people that are doing raps on their cars. You've got people that are you name it, people are out there hustling it. So, you know, there's a lot of things to consider when opening a small business that we kind of want to talk about.

Yeah, not only that, I mean, even like let's just talk about the Internet and there's these social influencers, right? These social media guys and girls that are out there making tons of bank, basically just promoting product because they're so popular. They have so many people that are following them on a regular basis. So when you think about, OK, I'm starting to make money or I anticipate that I'm going to make money, I want to just start out of the gates and create a business. What's important to consider? Well, first and foremost, I would tell you, is really consider like what type of business you're going into. Is it going to have inventory? Is it going to be a personal service business? Because all these types of things are going to have implications about, one, how you create a business plan. You're going to tell any banker that you go out to.

If you're going to try to get a loan, it's going to tell us what's your business plan look like. And that can be just really the structure of your business. How many employees, what type of inventory am I going to order? Do I need to consider what type of liabilities are clients going to be coming to be? Is there going to be contractual implications of what we do?

Thinking through that process will help you kind of start to ask the right questions, even people getting Kickstarter loans, things like that, for setting up businesses or, you know, you see Shark Tank every week. I don't know if you watch Shark Tank, but I watch Shark Tank and they have some of the craziest inventions coming on there and people getting money for small businesses and ventures that they're starting. And some of them get Kickstarter loans.

You've got, you know, my my wife, like the Netflix series Cheer and one of the girls on that show. Apparently she's some kind of a social media influencer. And I think she was paid I don't remember how much money or just wearing an outfit that a company sent her and then taking some pictures on Instagram and putting it out there, know they gave her money to do it. I mean, there's so many different ways for people to make make bank that these days. And, yeah, there's a lot to consider when you're opening a small business. Now, first and foremost, I mean, what what's your plan for your business? Do you want it to be just you? You want to bring on employees, you want to bring on partners, you know, how do you want that set up? The first thing to think about is how you want your business set up.

Yeah, and the big part of that, too, Bryan, is really why we're telling you to do this is because when you consider the types of entities that exist in the state of Texas and in Florida, they vary. But you could talk about like it could be a sole proprietorship when basically you're the only person in the company, you're the only person doing anything making any money. But you could say, hey, you know what, maybe I want to take on investors. Maybe a family member is going to bankroll me or a buddy who's got money, who's going to sit there and give me this loan. And they want an interest in the company because they believe in it, but they don't want to do anything. So is it a partnership? Is it a general partnership? Is it going to be a limited liability partnership, meaning that everybody only wants to expose what they put into the company?

You don't want to have personal exposure. Or if you look at it beyond that, you're like, no way. I completely see this is a shark tank idea. This is an idea that if I take it forward, I could make a ton of money. Maybe it's the basis the foundation for a corporation. So I'm looking at it, too. I want to see S-Corp or C-Corp. There's just so many considerations to take about. Each one of them is going to insulate you in a different way, depending on what you're trying to build.

Now, one thing they always kind of told us in law school is that when you're forming a business, you're talking to people about forming a business. The first thing you need to consider are obviously there's three things. There's ownership, there's tax liability and there's regular liability.

So those are the three things you really need to consider when when starting a business, a who you want the owners to be and what do you want their interest to be? What do you want your taxes to look like? Because that's where a clever accountant comes in and that becomes almost instrumental, as we found out. But then the third thing is, how do you want to limit your liability personally? I mean, a lot of that depends on the type of business that you're doing. If you're you're doing construction work, you're going to probably want to make sure you have limited liability. If you're doing office work, it may be less important depending on what it is. But but those three things are the paramount consideration, at least starting out.

Sure. And I'll give you a good example, Bryan, kind of along those lines of why it's important. My buddy, who he was a side hustle, was in the summers. He would he had a little one company, him and a couple of guys that he hung, he hangs out with would get you get their lawnmowers together, all their equipment load up in a trailer.

And they had a set number of clients during the summer that they would do yard sport. And he was like, you know, it's no big deal. Should I should I incorporation, get an LLC going. All we do is we split the money three ways. And I told them I go, yeah, that's a big problem, because not only are you interested in other people's property, but potentially you could cause damage. Sure enough, brother, I mean, it was like a week later he calls me. He's like, you'll never believe it. I think you jinxed me. And I was like, we're talking about he's like, man, I'm freaking going on this person's yard because it kind of was wet the day before. He goes in my lawn mower, kind of got hung down. And so when I lifted it to push it back down, the blades caught one of their metal sprinkler heads. He goes, rip the sprinkler, all the crap. He's like, not only that, a piece of metal shot out and like, put a hole in the side of this kind of, like, little barn that they had, you know, but he was like a structure where they stored stuff, kind of like a greenhouse, I guess, a better way, like a solarium anyways. So he's like they got all kinds of mad twisted up. So now they want me to fix their sprinkler system because who knows how much that's going to be, because they want me to fix this hole inside of their wall. Do I have to do that? And I was like, well, yeah, but you do. He's like, well, man, I didn't sign up for that. I'm just doing the yard. But these are the kinds of things that you really need to think through, depending on the site also that you're creating. Right. Because he had direct exposure and I told him I was like, now these three guys, you guys are just like all doing it together.

It's a company. He's like, yeah, we have a little bitty website, you know, but we never thought about this kind of stuff. So I'd really encourage people to sit down and think through. And that's what's so important about this business plan stage is really think through kind of what I'm going to do, because it'll help you get some good insight from an attorney or a CPA in relation to kind of things to look out for pitfalls and just to give you a kind of a breakdown of like a corporation is going to be, you have a lot more formality.

There's going to be multiple, typically multiple owners that are called shareholders, things like that. They're in a different, potentially different tax bracket. But the larger corporation, but a small one, maybe not know it's going to split profits like a corporation, which might split profits. You pay dividends to the shareholders or whatever the case may be an S corp. But then you have a limited liability company that gives you the limited liability protection of a corporation that's a big benefit of a corporation is to have that limited liability protection. You're only you're only liable up to your investment. So it could be very, very limited. The thousand, but even less than that. What the limit with a limited liability company, you get that limited liability protection from a corporation, but you split profits like a partnership. So in the long run company example that you just gave me, those three guys that have formed an LLC split profits the way they wanted to, everybody gets a third and then the limited liability protection would be limited based on having me. But that sounds like that your job went from a fifty dollars getting paid.

Out of pocket, five hundred dollars or something?

Yeah, yeah, it really was. And in that what he wanted to do was go can I apportionment between my partners because they were all kind of like, well, you know, you're mowing that yard. And he was trying to say, well, yeah, but it's our business.

So these are the kinds of things, to your point, Bryan, that really you're going to want to sit down and think through with the individuals that are going to participate in ownership or execution of the responsibilities for that company. And to take it a step further, it can even talk about like, you know, there might be intellectual property considerations that you're one you're going to look at. Your Shark Tank example is great. Somebody comes up with this fantastic million dollar idea and you're at the inception phase. You're kind of looking at it like, hey, if I can create this. I used to always tell people, you remember those cardboard windshield protectors, you put them on your windshield to keep it from the sun, from beating down on you in Texas. I kept thinking, why do not invent that man if I'd invented that had been a millionaire by now. Right.

But that million dollar idea somebody puts together and I guarantee you within four days of somebody seeing it, there's a hundred different companies that are trying to copy. So these are things that you're going to want to talk to a counselor or an attorney about as well. Is it this very unique idea that I'm going to base my company around? Do I need to look at intellectual property protections? Do I need to copyright the idea? Do you need to have a trademark because it's so unique that everybody's going to have an impact. Exactly. And so these are really things that you're going to want to have a conversation with, with your attorney, with your partners or anticipated partners or investors to really kind of look at that, because take it a step further, Bryan. So let's say somebody wants to give you money. You know, you have a great uncle, he's loaded and he wants to bankroll you, says I'm going to give you fifty thousand dollars and I want you to do whatever you want to do to create this company with that. Fifty thousand dollars. But two weeks into the business, he calls you and says how you use my fifty thousand dollars. You know, I really don't think you should invest that way. And you're like, well, you gave it to me. He's like, well, I invested it. And, you know, as an investor, I should have a right, a say. Each one of these organizational types that Bryan talked about, C-Corp, the LLC, the sole proprietorship, the general partnership, they're all going to have structure behind them to say you can invest.

But what do you what is the role you play? What do I get to say? You know what? Maybe we make him the treasurer. So what do you get to talk about? You get to sign the check. You get to account for the funds right up the meeting with a check.

Right. Or am I a silent partner? Meaning that we keep your money, but you don't get to say you have the operation of the business goes or am I a general partner? I have equal say. So these are all things that you're going to want to kind of think through in relation to what you're trying to create.

And also depending on depending on the type of business that you're operating. I mean, Texas does have a franchise tax that you have. You're going to want to get with an accountant and then you're also going to want to get with accountant, an accountant on how you're federally taxed and how much tax you want to pass through and how much your company wants to pay and whatever tax structure you want to set up. Because taxes are a huge consideration, because let's say your business takes off and you start making money hand over fist, then you really got to you got to start looking at these things. I mean, am I doing everything I need to do to maximize my benefit and then making sure that I'm paying the proper amount of taxes at the same time? So there's a lot of considerations to talk with an accountant about because that becomes a huge issue in a in a business. As you know, as we found out, that when you start making money quickly, then you're going you need to start taking into account those considerations. If the business isn't making any money, then the tax liability is not going to be high. If the business starts making money, then you're you're you're on a graduate scale on income taxes and a graduated scale typically goes up.

Yeah, absolutely. A great CPA kind of ties into a great back office structure, you know, in any business that you're looking at and you say, hey, you know what I want to create as we found out, you're going to want to really rely on the inside of individuals who have experience.

Maybe it's experience in setting up a small business. Maybe it's an experience. And kind of like we've talked about website design and CEO or marketing, getting that kind of information. You may be brilliant about the absolute thing that your widget, whatever widget you created, you may be the genius, but getting it out there and into the hands of the right people, having the back office work correctly. So you know how to take those offers or how to really analyze contracts that are being presented to you on these buy-sell agreements.

These are all things that you're going to really want to get some advice on. And we found out, Bryan and I obviously, that those were critical, hypercritical, even as attorneys knowing that it's a personal service business, that we're providing individuals is our inside, our professionalism, our guidance. We needed somebody in the background that could send somebody a bill that could structure, you know, like the internal processes and working mechanisms and all that is something you really need to understand as you're creating this entity to be successful.

You definitely don't want to get behind when it comes to organizing your books, organizing income, cash flow, expenses, all of those kinds of things.

And the reason why the majority of startup businesses fail is because it's not because they don't have they don't have drive and they don't have ingenuity and they don't have a great idea. It's because all of the I don't want to say red tape, but for lack of a better word, no red tape kind of bottom down after a while because you've got so many things to consider. I mean, you have as the owner, you have to consider marketing. You have to consider tax implications. You have to consider expenses. If you have employees, you've got to consider salaries and benefits and unemployment insurance and workman's compensation insurance and all of those kinds of things that have to be considered. You know, that helps your idea, your million dollar idea to get to the forefront.

Yeah, and, you know, as we've talked about and we've found out, Bryan, you know, like when you talk about an entity, a creation, it's a working, living, breathable document, this business plan that you're going to have, because as you start to execute it and grow and become successful, you may go from one person mowing lawns to five person mowing lawns. And if they're contract employees and how are you going to pay them? Do you need a payroll company? And so you don't think of it as a static thing, that you created this kind of like ten point list. You're like, OK, now I feel ready, know it's going to be something that you're going to continually revise and review with your attorney, your CPA, with your partners, so that you're constantly evolving that business, because all these side hustles that we're talking about, whether it's a husband or wife or a sister, whoever is creating these that are now becoming in this COVID era, a primary source of income, then you want to insulate that income as much as you possibly can. And that's really where you go into this phase about determining because you may start off and you're just like, hey, look, I'm just a sole proprietorship. I don't I'm not going to call it anything. I'm just working for myself to make money. But now it's getting bigger. And I need to consider the implications that you just talked about, the tax implications. Do I want it flow through to me only? Do I want to be able to divide out those tax implications? Do I want to be able to shelter some of these funds and have like some tax shelters based on the way I'm using expenses? Do I need to create separate accounts of what are the implications of that? All these are going to be considerations that you need to have conversations about as you encounter them, if not at the very best option, is obviously in advance of creating that entity.

Right. And a lot of these ideas take off pretty quick. So you have to have a we have a client that potentially starting a particular very particular type of cleaning company. And that thing has the potential to go nuclear.

And he's talking about one man, one one or two employee. That thing has the potential to be astronomical very quickly. So he's got to he's got to come up with a solid plan for investors. He's got to come up with a solid plan for business and how he's going to expand and how he's going to, you know, take on every every business is a risk. Every business. You take a risk, obviously, with your money, with the time, you know everything. But he's got to allocate. OK, how much risk do I expose myself to if I want to get five trucks or if I want to if I want to expand the thing rapidly? What's my what's my sales contract going to look like? What's my customer base? How am I going to get my my brand to my customers. I mean, the biggest, the biggest obviously the biggest advertising is obviously Internet. And this used to be the phone book, but in dinosaur times where I'm from phone book, but now it's the Internet. So, I mean, you've got to figure out how do I navigate Google? They have their own it's its own world out there. They have the world of advertising on the Internet is its own world. And Google Google has the lion's share of the market right now.

Yeah. And and I guess I would encourage the people who are listening or contemplating. I'm going to I'm going to create this entity, this business. And I want it to be flexible as it grows. You just got to remember, look, whatever you create, it can be changed, right? It may obviously require an attorney. And I would encourage you to contact an attorney to kind of help walk you through the options. But you may start out a sole proprietorship and then say, hey, you know what? Now, based on the performance of my business and the money that we're making or the type of business that we have in the potential risk exposure, maybe I need to consider an LLC so that I limit my personal exposure. And I'll give you a good example of this. I have a buddy who he will meet, Bryan and I, pretty, pretty big gun enthusiasts. And so he he started a reload business so he would collect brass from this local shooting range and he would reload and then he would put these out, like just to people that he knew. He was like, yeah, I reload this. You want some shells, swing by, give them to you. Dirt cheap. It costs for what I have to do to do it. Well, we were having this conversation one day and he was like, hey, man, I'm going to send you a bunch of shells, a bunch of bullets.

And I'm like, all right. And I'm like, are you doing this like for other people? And he's like, Yeah, but I mean, I'm only doing it like friends, family, people that I know. People have paid me for them. And I'm like, that's a business. I was like, I mean, there's some potential liability that you have an exposure. You said, well, why would I? I'm like, what if a reload goes bad? You know, what if somebody has an accident in relation to one of those bullets that you sold and who do you think they're going to come back to? You need to go to the firing range and say, hey, well, you know, that that that discarded brass that you sold this guy, you're at fault. I said, no, they're going to come back to you because you actually you're the person who delivered it. He's like even as as a potential even there. I said. So a business transaction sounds like most of the time people want to say, well, a business transaction is always based on money. But you and I both know, Bryan, that it could be a barter situation. Hey, you know, forgive me. Yeah. You give me your eggs and I'll give you my bullets.

Oh, yeah. Sure, I'll take him out of my chicken coop, but guess what, you just if you just formed a contract, set an exchange of services and so, you know, that could expose you in a lot of different ways. And I really was looking at it thinking like, well, it's no big deal. Maybe I'm going to turn it into a business. And as we had the conversation, more and more, he was like, yeah, I think I definitely want to have very limited liability on what I'm doing. So then we had to look at potential waivers. We had to look at its contracts and to terminate the term terminology that was inside the contract that really expressed what type of risk he was going to be willing to accept and how much he was going to try to push off to the person who was getting these. And so those are the kinds of conversations you really need to have with an attorney, with the CPA that kind of like limit your exposure personally. Nobody wants to go into a business, make a bunch of money, step on a landmine, and then all of a sudden have everything, not just what you put into the business, but everything else that they worked for be exposed.

And look, I mean, a consultation with an attorney to discuss your business plan and your idea. It can it can be part of the startup cost of your business. The consultation with an attorney is can be anywhere from three to a couple of hundred bucks. And it's probably well worth your time to have that at least consultation to discuss the issues so that you know what you're walking into.

I mean, you know, where at least some potential landmines are, because, you know, you don't it's much more expensive to step on one, and it is to avoid them altogether and. And look, they can even an attorney can walk you through how you file documents with the state and how you potentially can go get those tax certificates or particular documents, the different licenses that you might need, depending on what what type of business you had. So when you're talking about your side hustle going global, I mean, you're there's a lot more to consider. I mean, maybe there's some sort of regulatory body that might cover your particular line of work that you need to get involved in, whereas if you're just selling haircuts at your house, you don't necessarily need a cosmetology license.

I don't know for sure whether you would need one or not. But if you open a hair salon, you definitely do, right? Definitely. If you give your friend a haircut at home, you may not.

But, you know, if you if you're opening up a hair salon, you probably do. So those are the kinds of things that it's important to talk to counsel about.

Sure. Yeah. And, you know, even as an individual and I will give this as an example, because I think a lot of times when people are thinking about forming these businesses or, you know, a great example of an individual, my son, my son is super creative. Like he got that from his mom because clearly, you know, I had really. Yeah, but he you know, he writes songs. He writes he writes poetry. He he's now he's writing a book. And so, you know, he would sit down and he would just write this book and he would like email it all over the place. He'd be like, hey, I want you to check this out. He'd recorded him and his buddies, his band, and they'd send the stuff out. And I'm like, hey, you know what happens if somebody really likes that? And they take it and they record it and he's like, well, yeah, I mean, I would love that. That would be great. And I was like, well, you want to get paid for it? And he's like, well, of course I want to get paid for what I would get paid for it. I mean, how are they going to do it otherwise? I'm like, because you've done nothing to protect it. Right? And so, you know, these are the kinds of things it's really simple, but you just don't know what's going to turn into something great, something that's really worth a lot of money.

And so this side hustles or these primary hustles that people are working on. Now, I'd really encourage you to think about the long term goals that you have for it. And if you say, hey, I just want to make money, I want to be able to provide for my family and pay my bills. Well, great. And that means you want to insulate the money that you're making from not only Uncle Sam, if you can. Right. But also from other individuals trying to take it from you.

And so I had a client one time that I he built this particular type of physics device called the catapult that was used for measurement. And you had to look it up to see what a catapult actually did. But he built them and he sold them to a physics student and different things, and he sold probably two to five thousand units a year. And so he was fairly decent sized business that he had going well. A big company came in and they said, well, we you know, we've got the market cornered on sabbatical and we've got the copying, our design and this and that. And we want and we want you to see this or you're right, we're going to sue you for a quarter million dollars. Well, he didn't have a quarter million dollars to pay these people. And not only that, they were right. They they didn't have the market cornered on that. But they were you know, they had a particular type of set up. Some of it is that we had to write a real nasty letter back to him saying basically, go jump in the lake, because, you know, we've been in business longer than you. We've had this data for longer than you have. And you know what? You might be looking at a counter lawsuit if you if you try to sue us because, you know, you don't there is no copyright on the state of apparently at least there wasn't then there maybe now. But the point being, you might get competitors coming in and trying to try to take your business because, you know, they you make a better mousetrap.

Yeah. Or flip it right. You may come up with the greatest idea in the world. Somebody wants to copy it. And so instantly you're like, how do I protect my idea? So these are all things that a lawyer can absolutely help you with. And a good, strong plan will ensure that that even if it does happen, you have recourse. You have the ability to go in and protect the asset that you created with your hard work.

You might need something as complex as a patent or you might need something as simple as a trademark or a copyright. And depending on what it is, what type of if it's intellectual property that ending up with an invention or whatever the case may be. That's why that's why I think it's so interesting, because you've got these people coming in there with these million dollar ideas and they're the first thing they use the shark you ask them to pay. Is that patented a what is the patent on something like that? And, you know, they're. Oh, yeah, yeah. We got the spending and blah, blah, blah. So, you know, the first thing an investor is going to want to know is how how how protected is my investment in this situation.

Yeah. And in that you want clear responsibility spelled out in your plan as well. And what I mean by that is in relation to let's say you're going to establish a partnership. Right. So is it is it equal responsibility? Is it that a partner is going to have certain responsibilities that are set up for themselves and you're not going to have have to mess with those? You know, is it that you're going to need a treasurer or a director of operations? Is it that you're going what are their roles? What are their. accountabilities, what is their compensation look like as it continues to grow and you're adding employees, maybe you have to look at it and say, well, do I need an employee handbook? What are the laws and the rules that I need to have in place to be able to determine something?

Because as an example, you know, you're sitting there and you say, hey, you know, my my employee went out and did something that I didn't authorize as an example. You know, your example about the cleaning company. You know, somebody goes out, drives the company van, and then all of a sudden, Bam, they're in a wreck. Whose life? You know, you obviously do have that insurance, which is that employee whose contractor at will. Are they on the policy?

These are all things that you're a good plaintiff's attorney will go through every single everybody and then let the defendants out as necessary, right?

Absolutely. Absolutely. And so these contracts that you're creating, these these formations, these business entities, they're all going to have those kind of those type of potential exposure. And you want to really think through that and have some good advice to help you kind of really navigate shark infested waters to kind of take that shortcut.

You need a company insurance policy. Do you need a company, insurance company to train drivers? The point you made on the employee handbook is a very, very important one because you want to make it absolutely clear what employees can and can't do and you want to make it absolutely clear what you will discharging an employee for doing.

Because what you don't want to have happen is a bunch of employees out there breaking the law or whatever the case may be, whether that's harassment or stealing or whatever, and then come to find out, they start looking at the company and oh, you didn't have any procedures in place to tell employees that it wasn't OK to feel that it wasn't OK to rob people blind or whatever the case may be. And then they're looking at you for liability because you, A, hired an employee who was a thief and, B, you didn't have any protocols in place to get rid of an employee.

Yeah, there's you know, not only that, but let's say your company's getting big and you're having employees in multiple states.

Bryan and I found out, obviously, your employee and other people in other states, we've represented companies that say, hey, do I have to maintain insurance policies for an employee who's do based out of Texas? Yeah, you may have to. And these are the kinds of things that you're going to encounter as you're creating these new entities, these businesses that start to take off and grow. And so you're really can look, I can't stress enough that you're going to want to have surround yourself with people who know what they're doing. You can give you some valuable insight to kind of help guide it.

And that that time spent with the lawyer drafting, let's say, drafting a policies and procedures manual or corporate formation documents is going to be time well spent because you do it once. And it's right. I mean, you can tweak it later on as you grow or whatever, but it's going to be going to survive for a long, long time in most instances.

Yeah, I mean, I'll take this moment to just kind of really dissuade people from considering these, like online legal forms. OK, can you use a legal form? Yes. Well, here's the problem that I have a legal team is a lot of these really don't come with licensed advise from an attorney who's one been doing this practice in the state which are creating these entities. And so what you're getting really is it's like giving somebody a firearm that's loaded and saying you'll be fine. I'm not going to tell you how to unload it, how to discharge it, how to aim it, how to clean it, how to care for it. But by God, you'll be fine. Just take it.

They might tell you how they might tell you within the bullet comes out of, though. They might tell you that. No, that's a good example because I did have a client that came in one time.

I had a business dispute with the partner and showed me the partnership agreement that they had come up with, I think off of legal them or one of those online sites where you can download and buy partnership documents. Well, the thing had so many blanks in it. I didn't know who owned what. It didn't say who owned what. And, you know, you kind of have to default to the partnership laws of the state of Texas, which according to the what he was telling me, that that's not what they intended at all and that's not what what he wanted to have happen. But he doesn't have a legally enforceable contract or legally enforceable document that he can go to a court and say this is the agreement that we had and this is how this this particular person breached that agreement. You got to be real careful with doing your own legal work. If I get this kind of like me doing my dental work, it's a very risky and it's going to hurt a lot. Right.

Especially rights you and take care of. Right. Now. I agree. I agree. I think that, you know, we always talk to clients. We try to give them the best advice possible, put them in the best situation. And if you don't know, you need to find somebody who does know a lawyer is going to be able to help give you those answers or point you in a direction, get you the right answers and create the right things that are going to help your business be in the right place.

I mean, just know that I mean, you probably have a great plan and you probably have a great idea in mind. And you probably have you're probably motivated to sell it and you're probably probably pretty good at it. But there is a lot that you just don't get discouraged. And there's a lot of different there's a lot of different schemes on the web, I guess, so to speak, when you're.

When you're looking at this, you've got a marketing aspect, the tax aspect, the liability aspect, the profit aspect, an investment aspect of a partnership aspect, maybe, maybe not. So you've got to just look at all of these different webs that you have to kind of, you know, don't lose your passion for the project or the passion for the business that you have, because it's probably a great idea. And people love. People love passion and people love, you know, people that come to you with passion and they're selling a product that they really believe in. But just know that, you know, you can love what you do and you can love what you sell, but don't get derailed by all of the kind of red tape that goes along with. With that, it can be a can be a tricky it can be a tricky minefield. And you can you can stumble. But there are people out there, accountants, lawyers, all types of people and marketing people even that can that can help you bring your business ideas.

And in that, you just want to have clear responsibilities and roles, what you're paying for, you know, what you're going to get at the end of the day, in what we always know, the neighborhood that I came from was probably a little rougher than Bryan's neighborhood. But I think they always say hustlers don't get hustled. Right. And so you really want to kind of have that as a mentality.

You're creating this business is that you're going to hustle, you're going to put your blood, sweat and tears into something that you want to build, that you want to be profitable, that you want to make, and maybe you pass on to your children later on. The way to do that is to have all this created correctly to to really surround yourself in a way that insulates all the work that you're putting into it and all the profit that you hope to get out of it in the best way possible.

And so to your point, Bryan, I mean, that's really knowing and having a good working relationship with an attorney who can guide you, a CPA that can help you avoid kind of the tax pitfalls. Maybe it's a tax attorney who assists you there. Is it a web designer or is it an initial company marketing, whatever it may be. These are all individuals that you want to kind of think through. And a lawyer can really help guide you to say, hey, look, consider talking to a person about X, Y or Z. They may not have the answer as far as like, who do I send you to? But they can sure tell you how you're going to need some back office stuff. You're going to need a contract that really spells out X, Y and Z so you don't get burned. So if you don't get paid, you have recourse to be able to give me the foundation to be able to go in and get your money or get your product back because they didn't fulfill their end of the contract.

And the way to get a hold of us when we do do this sort of thing and we we counsel potential startup businesses all the time and the way that the way they get all of us, we have a website, that's astxlegal.com and my phone number directly is 281-374-4741. I'm Bryan Abercrombie, one half of the Abercrombie and Sanchez law firm. And then they get th whole.

Yeah sure, you can hit me up. My cell is 817-914-5470. My direct line you can use at the office at 469-844-7181. You can send me an email directly at ssanchez@astxlegal.com. And obviously we want all you hustlers to really hustle, right? Make the money become super huge. We just want to help you get there. If it's not us, it's OK. Find a lawyer, make sure you talk to somebody that's going to really help guide you in creating the right to make sure that your business goes where you want it to go.

We definitely want to say "we knew you when".

That's right. We knew you when.

Just to give you a kind of a heads up on a future episode, we are going to be talking about a topic that unfortunately is fortunately or unfortunately, probably unfortunately, it's been in the news a lot lately. It's the topic of firearms and self-defense and personal property and what kind of what your rights and what your responsibilities are with respect to that. So we'll be bringing that to you next week. We're going to try to bring a guest on to talk about our guest, the criminal defense attorney probably that will help us navigate a tricky minefield when it comes to firearm use and self-defense law and things like that. So we'll look forward to that. We'll be looking forward to speaking to you again, Sam, next week. And thank you again for all your wonderful insight.

AS always, always a pleasure to be with you, Bryan. Take.

Thank you for listening, and we hope you enjoyed the Top Texas Lawyers Podcast. If you'd like to schedule a consultation with either Bryan or Sam, please call 1-888-981-7509. Or visit us on the web at astxlegal.com. Once again, that's astxlegal.com. Thank you very much.

Scroll To Top