LAW IS THE ESSENTIAL INGREDIENT IN THE RECIPE FOR A SUCCESSFUL BUSINESS
Running a successful business is a lot like baking a cake. You have to have a recipe. Many business owners think that means that they must have a business plan, a marketing plan, or a sales plan to run a successful business. While planning is important, business plans, marketing plans, and sales plans are ALL just icing on the cake itself. You have to start with the basic steps to make a business deal happen. Think of the business deal as a layer to the cake and the cake as the business you are building. Every business is built on layer after layer of business deals.
The first step in every business deal in its simplest terms involves an offer to buy or sell. The next step is either an acceptance of the offer or a rejection of the offer. If the offer is accepted you have just created your first business deal or the first layer of your successful business. This layer of your business is held together by a little something called the law. While you may think that you have just made a successful business deal you, in my world you have created an agreement.
While not every agreement has to be written down in the form of a contract, it is certainly helpful to have a written agreement to prove exactly what was offered and what was accepted.
For example, one of my favorite past times is shopping. Every purchase that I make is an agreement between me and the store for me to buy the item that I want at the price at which the store agrees to sell. Sounds simple until you realize that a complex set of laws govern even my little habit of shopping. There are laws that say that some items cannot be returned if worn. And, there are laws that allow me to return items if they simply fall apart through no fault of my own. There are even laws on what the store owner can do with the credit card information that I have so readily given to buy my items. Most of the time when I am shopping, even I almost tempted to forget about the girth of laws that govern a simple purchase of a pair of Michael Kors shoes.
But the smart successful business owner cannot afford to forget the law and uses the law for the businesses advantage. Do you ever wonder why the back of receipts from so many national retailers is covered with words like “return policy” or “disclaimer?” You create a contract when you write out the details of an agreement at or near the time that the agreement is made. A receipt is a contract and may be used to protect a business if something happens to go wrong with the purchase after the sale.
Whatever plans you may have for your business; it will all come crashing down if you do not understand how to use the law to hold it together.
Some business owners think that if they are only selling real estate then they only need to concern themselves with real estate law. However, law is not that simple. The law has very different rules for the many different aspects of what may seem like a simple real estate deal. Property law and finance laws readily come into play. But, do not forget that a simple real estate deal will usually also involve tax laws, environmental laws, construction laws, labor laws, consumer protection laws, and contract laws.
Not every business deal may be as simple as you may think.
Far too many people define complexity based simply on the amount of money involved. However, just because it takes more flour and more money to build a big cake does not mean that the big cake will be as good as the small cake. A good cake is like a good business deal–size is not the most important part.
The law holds business deals together so you can better ensure the return on your invest. More importantly, knowing how to effectively use the law to structure your business deals may help you to make more money on each business deal.
For more information on using the law to increase your bottom line, follow the $ense of £aw section of Nachael’s World.