FAQs: Our Trademark Process

The process of preparing and filing your trademark application includes researching the proposed trademark, preparing the application, filing the application, and responding to “office actions” from the United States Patent and Trademark Office (USPTO).

  • $350 per class of goods/services (click here for a list of classes)
  • $300 – $400 for the clearance search/conflicts search
  • $500 legal fee for the application.
  • If a “Statement of Use” is filed separate from initial application: add $200

Prosecution and TTAB

  • Prosecution is the period of back and forth with the USPTO, fighting to get the application approved, and docketing and responding to office actions.
  • For applications without serious objection, the back and forth is minimal. This is the outcome in most applications that use unique, non-descriptive names (e.g. KODAK)
  • If the examiner digs in on a rejection, and we want to fight for it, we may have to appeal to the TTAB.  This is rare.
  • Other parties can oppose your mark, this starts a mini-litigation before the USPTO Trademark Trials and Appeals Board (TTAB) over whether you should get a registration.  This is rare.

It is important for clients to know that, at the end of the day, while preparing and filing the trademark application is a predictable task that we can do a fixed fee on, the later prosecution of that application is more like litigation – its an adversarial process between us and the USPTO.  We can be pretty confident which ones will be objected to, but it is really hard to predict with any accuracy more than that.  

This is why it is best for clients to pick names that are unique and non-descriptive.  E.g. consider “KODAK” for cameras.  KODAK is a made up word that has no meaning in any language, it is unique and non-descriptive, you could use it as a trademark on anything.  

USPTO Process:

After the application is submitted, within 3-6 months the USPTO will issue a response. Commonly, the USPTO will issue an Office Action to discuss any substantive or procedural issues with the application/mark. A response is due within 6 months. The USPTO will then approve/deny the registration. If approved, the registration will be published for public opposition. Once the opposition period ends, a registration certificate will be issued based on use. 

If application was filed with a statement of use, the mark will receive registration status.  If the application was filed based on the intention of use, a statement of use need to be filed within 6 months. 

Registration updates are required between the 5th and 6th year (§8 or §8 & §15) and again between the 9th and 10th years (§8 & §9) to remain active.

You should allow for 12-18 months for the full registration process. Occasionally, a quicker turnaround can be warranted.

USPTO Filing Fees:

$350 per class, per mark. However, no additional fees are required during the normal processing, including Office Actions.

Statements of Use, if not filed with the application, are $100. Amendments and extensions range from $100-125.

USPTO Renewal Fees:

§8: $125 per class, per mark.

§9: $300 per class, per mark.

§15: $200 per class, per mark.

USPTO accepts payment by Credit Card, USPTO Deposit Account, Electronic Funds Transfer.  Fees are paid independently. USPTO fees listed for electronic filing and are subject to change.

Partnership Guide: 40 Questions for Any Partnership Agreement

A Guide to Putting Together Your Partnership Agreement

By Jeffrey K. Davis, Esq.

WHAT SHOULD YOUR BUSINESS GOVERNANCE AGREEMENT ADDRESS?

The following is a 40-point checklist that you should use when drafting a business partnership agreement. This is not an all-inclusive list but I have to say, it’s pretty close and has broad applications for many industries. The purpose is to get you thinking about your rights, your expectations and the process of running a company with someone else. Use this as a guide, as a conversation starter, as a template for a well-vetted and successful partnership.

Management Structure.

  1. Who will be involved in the day to day activities?
  2. Who will manage this company at a high-level?
  3. Who or how will the money be managed?
  4. How will decisions be made? For example, majority vote, unanimous vote, etc.
  5. What are critical decisions for you that require your approval?
  1. How will decisions be made with respect to acquiring property, personal property, real property, intellectual property, inventory, etc.?
  2. How will decisions be made with respect to selling or purchasing assets?
  3. How will decisions be made with respect to hiring, firing and disciplining employees, consultants, vendors, legal counsel, accountant, etc.?
  4. How will decisions be made with respect to the purchase of life insurance, liability insurance, disability insurance, general liability insurance and other insurances?
  5. How will decisions be made with respect to opening and maintaining bank accounts, borrowing money, lending money, bookkeeping, accounting, fundraising, or adopting a annual budget?
  6. How will decisions be made with respect to instituting, prosecuting and defending legal, administrative or other suits or proceedings in the Company’s name?
  7. How will decisions be made with respect to establishing pensions, and incentive plans for any or all current or former owners, Managers, employees, and/or agents of the Company?
  8. How will decisions be made with respect to fixing salaries for any member, manager, officer, director, etc.?
  9. How will decisions be made with respect to, contract management, debt collection practices, or receivables due to the Company?
  10. How will decisions be made with respect to Taking on new members/shareholders/owners

Financial Structure

  1. Have you had a discussion with your business partner about the financial needs of the company?
  2. What are the financial needs of the company to stay afloat, and for how long?
  3. What is the company’s overhead?
  4. What do you need to break even?
  5. What will you need in order to keep the business afloat for 3 -6 months such as in the case of a global pandemic?
  6. Will you as business partners be contributing or lending money to the company?
  7. What sources of funding have you considered, such as loans vs. investors?
  8. What are your financial goals or expectations of the first 6 months? Year? 5 years?
  9. Will the company make any distributions or declare dividends? If so, under what circumstances? How often?

Dispute Resolution

  1. What if there is an important decision that needs to be made and the owners are at a deadlock?
  2. How will you resolve disputes quickly and at minimal expense? NOTE: One option might be to put together an independent board of advisors that agrees to be the tie breaker specifically for deadlock issues. Another option might be to submit the claim to binding arbitration or mediation. Another might be to vest the final tie breaking decision in a trusted advisor.

Your Expectations in the Business

  1. Will you or your business partner be receiving a salary?
  2. Will you or your business partner be receiving any other form of compensation?
  3. Will you or your business partner be involved in the management of the company?
  4. Will you or your business partner be employed by the company ? What are your expectations with respect to being employed by the company? For example: for a set number of years, set salary, set job title, etc.?
  5. Will you or your business partner be required to devote a set number of hours per week/month to the Company?
  6. Will you or your business partner be expected to spend a minimal amount of time in the company office?
  7. Will you or your business partner be required to devote minimal number of hours per week/month to the company and its activities?
  8. Will you or your business partner be able to engage in competing or other businesses?
  9. Will you or your business partner be able to engage in other non-competing businesses?

Death of a Business Partner

  1. What happens if one of the principals of the partnership dies? NOTE: Usually this is handled by a buy-sell clause/contract that is funded with a life insurance policy.

Debt of a Business Partner

  1. What happens if any of the partners becomes financially insolvent and declares a bankruptcy, will you have to take on that partner’s creditors as your new partners?
  2. How will you protect the company from the debt’s of one of the business owners?

Divorce of a Business Partner

  1. Let’s say you’re a partner with Sally. But she and her husband Jim get a divorce and in the settlement Jim gets half of Sally’s interest in your partnership. Do you really want to be forced to take Jim into your partnership? How will you handle this situation?

Disability of a Business Partner 

  1. What happens if one of the partners is hurt and is no longer able to contribute their time and talent to the partnership, how will this effect their ownership interest and the way profits are split? NOTE: Disability in my view is worse than death. You’ve lost your ability to make an income, it can be burdensome on your family (emotionally and financially), so if you’re business is centered around you, then why not consider something like disability insurance? And if that makes sense to you (which it should) then why not figure out how to have the business pay for it as a potentially deductible expense?

The 41 Point Test for Evaluating Your Potential Business Partner

Over the years I’ve represented hundreds of startups, joint ventures and partnerships. I’ve even been a part of a few partnerships myself and had I put myself through the same 42-part test below perhaps some of those relationships would not have ended so miserably. People rush into business relationships all too often because we’re human beings and as much as we may want otherwise, we’re emotional by our very nature. It is one our greatest strengths but also greatest weaknesses. We put aside logic and reason for validation.

If you’re thinking about bringing in a partner, collaborating with another business on a project, or going into business with a long-time friend, I urge, no I beg you to go through the list below when you’re formalizing your strategic relationship.

There’s a saying that summarizes this best: “sometimes it’s better to leave them at the alter rather than suffer a messy divorce”. The point of this is to think things through and in doing so taking a more calculated approach to the best extent that you can.

I.         VALUES: All business planning, whether it’s your own business or a shared business starts with determining your core values. These core values can be a mix between personal and business (as they tend to overlap). These core values are the heart, root, and foundation of your business. To help you visualize this better, think of a mission statement as a recitation and memorialization of your core values. Now place that mission statement in the middle of a white board (often referred to as a vision board). The mission statement is the heart of your business. It is placed in the center. From the heart-center you have branches that connect to different goals, and hanging below each of those goals is the process for achieving your goals. Everything centers and revolves around your mission statement because it consists of your values i.e. what matters to you most as part of the vision for your business, for your life, and for your customers. Now, when visualizing this vision board, focusing on that heart-center, ask yourself the following about your potential business partner:

  1. Do you share similar values?
  2. Will you both fundamentally be moving in the same directions?
  3. Do you both want the same or complimentary things? Not everything has to be identical and sometimes that is a good thing. The goals and process are things that may change and adapt through the course of your business lifecycle. That’s quite common. The core of what your business is about, it’s values, are more akin to a constitution, like the constitution of the United States. That constitution doesn’t change and should ring true for both you and your potential business partner.
  4. What things do you want that might be at cross-purposes with each other?
  5. Where do you want to be? What do you envision for your business in a broad sense?
  6. What do you feel about the vision for your future?
  7. What are the principles and values that are important to you and for your business?
  8. What is the “greater purpose” for your business?
  9. How are you going to be different than the rest?

II.        CONFLICT: Dealing with conflict in your business is something that most business owners overlook. I’ve come across some incredibly brilliant business owners starting out, ready to take on the world, and in their zeal they didn’t take the time to consider how conflict is inevitable in all relationships in your business. The source of conflict is at minimal three-fold: partners, clients, and people that work for you. How people handle conflict will drastically effect your ability to function and could impact the culture of your business overall. Conflict between business partners can bring a business to a halt. If your business partner does not have the wherewithal to productively and efficiently address conflict in your business, it can effect the management of the employees and the level of necessary customer service. Conflict is inevitable because relationships are complicated and emotional. Conflict is the result of expectations not being met and the failure to communicate and document those expectations. With that in mind, think of the following:

  1. How does your prospective partner deal with conflict?
  2. Is your partner’s approach to conflict a match for your style?
  3. How does your prospective business partner communicate with you or others?
  4. How does your prospective business partner treat others that perform services for him/her?
  5. In times of stress will your prospective business partner stay the course or cut and run?
  6. How have they dealt with conflict in their past personal and business relationships?
  7. What happens if you and your partner reach an impasse, an irreconcilable difference on a fundamentally important issue? How will you handle it?

III. WORK ETHIC: I represented someone who fought with her sister over their business of 20 years. One of the key aspects to the dispute was that the opposition claimed my client quit because she “gave up on the business” by not showing up at the office. For many reasons they were wrong which is why we ended up being successful in the lawsuit and forcing the other side into agreeing to a substantial (well above market) buy out. However, it raised a lot of questions over whether one’s work ethic has consequences for their ownership in the business. If the attorneys who drafted the shareholder agreement were more clear on that point then perhaps we would have lost. Regardless of win or lose, those types of expectations should be addressed before you start the business (and preferably in writing) because they are absolutely a source of tremendous conflict down the line if expectations are not met. With that in mind consider the following:

  1. What type of hours will this person work?
  2. How much work will they put into those hours?
  3. How effective are they at what they do?
  4. What is their work style and can you live with it?
  5. What are your expectations for each other in terms of time devoted to the business?
  6. Where will people be working from? (e.g. an office, home, both?)
  7. How will you be accountable to each other and the business? In other words, how will you  measure and keep track of your business partner’s work efforts?
  8. What metrics will be used to measure the efficacy of your business partner’s contributions?

IV. INTEGRITY: Integrity is something that is often overlooked but critical for the survival of a clean and healthy business relationship. Integrity is the root of trust. If we’re being technical we’re talking about the quality of being honest and having strong moral principles; moral uprightness. It’s about the practice of being honest and showing a consistent and uncompromising adherence to strong moral and ethical principles and values. It’s about consistency. With that in mind consider the following:

  1. Do you trust this person?
  2. Is that trust based on real data or an emotional connection?
  3. How has this person behaved in their past?
  4. Does this person consistently meet their commitments, big or small?
  5. Will this person do what’s right, especially when it isn’t convenient or profitable?
  6. How does this person act when others are not present?
  7. How does this person speak about others when they are not present?
  8. Does this person follow through on their promises?
  9. How transparent is this person in their responses, access to information, and personal/business dealings?

V. THE ADD-VALUE: Determining the add-value is a more practical line of questioning. You’re trying to determinewhat you and your business partner bring to the table and if those are valid reasons for entering into this potential partnership. You’re trying to understand what about this potential relationship will make your business venture successful and profitable. You’re trying to understand how this person will work with you to realize your end goals. Your answers or motivations should not be just about money. In addition, if your responses to these questions are motivated because of fear, then you should reconsider the partnership altogether. With that in mind consider the following:

  1. What are your skills, talents, and resources that you and your business partner bring to the table that bring elements for success of your business?
  2. How do you complement each other?
  3. How do you and your business partner make for a stronger foundation for your business?
  4. Do you share a similar vision?
  5. Have you been able to discuss short term and long term goals?
  6. Is your business partner bringing something to the table that is more than just money?

VI. RELIABILITY. It’s a simple question really. Can you rely on this person? Is this the type of person you have to lie to in order to get them to meet you on time for dinner? If so, they’re not so reliable, and you may want to re-consider getting into a sophisticated business relationship with them that involves having to rely on their actions and ability to execute time sensitive decisions.

  1. Do they or will they come through as promised?

The foregoing is meant as a guide. It’s not a bible, it’s not law, it’s not set in stone. It’s nothing more than a thought provoking guide that I trust you’ll use as the baseline for considering a business partnership.

INTERVIEW: Talk to Neil

Meet one of my favorite business attorneys Neil Greenbaum as we talk about buying businesses (asset purchase agreements, stock purchase agreements and franchises). It’s extremely informative, and we get some valuable pro tips from the pro himself. Neil. This will surely not be the last interview with Neil. While he doesn’t call himself an “expert” in anything he is definitely someone I’ve come to respect immensely just from the conversations we’ve had. Happy to call him a resource.

VIDEO: My Sample Intake Process

I talk a lot about having the right systems and processes in place for your business. It’s important because you make your business more efficient, and you as a business owner are more effective. We’re talking about creating a system for qualifying your clients. So, putting my money where my mouth is, sorta, here is my 3 step intake process for new engagements or prospective clients. Feel free to comment!

VIDEO: We Crave Predictability

There’s nothing we as business owners crave more than predictability. So why not make efforts in your business plan to hedge against risks and the general “unknown”? Your business plan is the written foundation for planning for risks. Putting together your business plan is an exercise in vetting the various risks to your business. With that in mind, excited to announce that in a few weeks myself along with a panel of other professionals will be conducting a webinar on risk and adaptation within your business plan. Stay tuned!

VIDEO: Don’t Engage in Marketing Without Considering This FIRST!

In a day and age where we have so many opportunities to get our message “out there”, we as business rarely stop and think about the potential liability we are exposing ourselves to in the process. What you say matters. The representations you make on your website, social media, and marketing campaigns have very real legal consequences. Do not engage in marketing on any level without considering a discuss with a business attorney or an advertising law attorney, as discussed in more detail in this video. Understanding how advertising can subject you to a lawsuit is a critical part of your business plan.

VIDEO: Stay Humble

In this epic rant I discuss the value of staying humble and always keeping your mind open to new educational opportunities and experiences that will further your growth as an individual and as a business owner. I sound like such an adult!

The Independent Contractor Test

The IRS test often is termed the “right-to-control test” because each factor is designed to evaluate who controls how work is performed. Under IRS rules and common-law doctrine, independent contractors control the manner and means by which contracted services, products, or results are achieved. The more control a company exercises over how, when, where, and by whom work is performed, the more likely the workers are employees, not independent contractors.

A worker does not have to meet all 20 criteria to qualify as an employee or independent contractor, and no single factor is decisive in determining a worker’s status. The individual circumstances of each case determine the weight IRS assigns different factors.

NOTE: Employers uncertain about how to classify a worker can request an IRS determination by filing Form SS-8, “Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” However, some tax specialists caution that IRS usually classifies workers as employees whenever their status is not clear-cut. In addition, employers that request an IRS determination lose certain protections against liability for misclassification. Consult with your CPA.

The 20 factors used to evaluate right to control and the validity of independent contractor classifications include:

  1. Level of instruction. If the company directs
    when, where, and how work is done, this control indicates a possible employment relationship.
  2. Amount of training. Requesting workers to undergo company-provided training suggests an employment relationship since the company is directing the methods by which work is accomplished.
  3. Degree of business integration. Workers whose services are integrated into business operations or significantly affect business success are likely to be considered employees.
  4. Extent of personal services. Companies that insist on a particular person performing the work assert a degree of control that suggests an employment relationship. In contrast, independent contractors typically are free to assign work to anyone.
  5. Control of assistants. If a company hires, supervises, and pays a worker’s assistants, this control indicates a possible employment relationship. If the worker retains control over hiring, supervising, and paying helpers, this arrangement suggests an independent contractor relationship.
  6. Continuity of relationship. A continuous relationship between a company and a worker indicates a possible employment relationship. However, an independent contractor arrangement can involve an ongoing relationship for multiple, sequential projects.
  7. Flexibility of schedule. People whose hours or days of work are dictated by a company are apt to qualify as its employees
  8. Demands for full-time work. Full-time work gives a company control over most of a person’s time, which supports a finding of an employment relationship.
  9. Need for on-site services. Requiring someone to work on company premises— particularly if the work can be performed elsewhere indicates
    a possible employment relationship.
  10. Sequence of work. If a company requires work to be performed in specific order or sequence, this control suggests an employment relationship.
  11. Requirements for reports. If a worker regularly must provide written or oral reports on the status of a project, this arrangement
    indicates a possible employment relationship.
  12. Method of payment. Hourly, weekly, or monthly pay schedules are characteristic of employment relationships, unless the payments simply are a convenient way of distributing a lump-sum fee. Payment on commission or project completion is more characteristic of independent contractor relationships.
  13. Payment of business or travel expenses. Independent contractors typically bear the cost of travel or business expenses, and most contractors set their fees high enough to cover these costs. Direct reimbursement of travel and other business costs by a company suggests an employment relationship.
  14. Provision of tools and materials. Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor finding.
  15. Investment in facilities. Independent contractors typically invest in and maintain their own work facilities. In contrast, most employees rely on their employer to provide work facilities.
  16. Realization of profit or loss. Workers who receive predetermined earnings and have little chance to realize significant profit or loss through their work generally are employees.
  17. Work for multiple companies. People who simultaneously provide services for several unrelated companies are likely to qualify as independent contractors.
  18. Availability to public. If a worker regularly makes services available to the general public, this supports an independent contractor determination.
  19. Control over discharge. A company’s unilateral right to discharge a worker suggests an employment relationship. In contrast, a company’s ability to terminate independent contractor relationships generally depends on contract terms.
  20. Right of termination. Most employees unilaterally can terminate their work for a company without liability. Independent contractors cannot terminate services without liability, except as allowed under their contracts.

The Economic Realities Test

Similar to the common law test, the economic reality test focuses on the degree of control exercised by the employer as an essential factor in determining whether an employer-employee relationship exists. While no single factor is controlling or decisive in determining whether an employment relationship exists, the facts and circumstances that courts and federal enforcement officials examine in deciding whether an individual is an employee or an independent contractor are:

  • the degree to which the employer controls or directs the manner in
    which work is performed,
  • whether the worker’s opportunity for profit or loss depends on his or
    her managerial skills,
  • whether the worker’s duties are performed for the employer on an
    ongoing or permanent basis,
  • whether the service performed by the worker is an integral part of the
    employer’s business,
  • the extent of the worker’s investment in equipment or materials needed to perform the job, and
  • the degree to which the worker is engaged primarily for the benefit of
    the employer.

The IRS considers a worker to be your employee if you have the right to control not only what work will be done, but also how the worker will do it. If you treat a worker as an independent contractor, but the IRS decides you have sufficient control over the worker to create an employment relationship, the IRS can hit you with a costly bill for the employment taxes you should have been withholding and paying.

The Common Law Test:

IRS examiners use the 20-factor common law test to measure how much control you have over the worker. These factors are reflected on IRS Form SS-8, (this form can be downloaded at www.irs.gov) “Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.”

You can fill out the SS-8, including the facts of your relationship with the worker, and submit it to the IRS to get a determination of whether the worker is your employee or not.

However, many companies simply use the SS-8 as a self-audit to avoid a misclassification trap; they don’t actually submit the form to the IRS.

Of course, many workers — the IRS estimates as many as 85% of all Form SS-8 filers — submit the form to the IRS because they want to contest their treatment as independent contractors.

But the issue of who has the right to control is often not clear-cut, and the Tax Code doesn’t define “employee.” So, the IRS developed the “20-Factor Test” to arrive at an answer. The IRS later refined this test—it added four new, critical factors and added more weight to some and de-emphasized others in the original 20. You don’t need to have all the factors in your favor to be able to treat a worker as an independent, but you are more likely to pass the common law test if the more important factors point to independence.

According to the manual the IRS uses to train its worker classification auditors, the three most important factors are:

Instructions to workers: Your worker is probably an employee if you require him or her to follow instructions on when, where, and how work is to be done. This is a very important factor. However, if you tell your electrician you want blue switch plate covers instead of white, you are not exercising control to a degree that would make the person an employee.

Job training: If your company provides or arranges for training of any kind for the worker, this is a sign you expect work to be performed in a certain way; therefore, the worker is your employee.
Training can be as informal as requiring the worker to attend meetings or work along with someone who’s more experienced.

Worker’s ability to make a profit or suffer a loss: An employee may be rewarded, disciplined, demoted, or fired depending on job performance, but only an independent contractor can realize a profit or incur a financial loss from his or her work. In other words, an employee will always get paid; an independent contractor, however, has a financial stake in his enterprise.

IRS also gives high priority to the following factors:

Intent of your company and of the worker: To build a solid case, you and the worker should sign a written agreement stating the worker is an
independent contractor who will be paid by the job or project, provide his or her own tools, etc.

Pay basis: If you pay a worker on an hourly, weekly, or monthly basis, the IRS will consider it a sign the worker is your employee. An independent is generally paid by the job, project, assignment, etc., or receives a commission or similar fee.

Benefits: Providing benefits other than pay are a strong indicator of employee status. Incorporated status: Workers who are incorporated are generally considered to be working for themselves, not as your employee.

Importance of the worker’s services: If a worker provides services that are integral to the success of your business, the worker is likely your employee.

Personal performance of services: An independent contractor should have the freedom to hire assistants or subcontract work to other workers or firms at his or her expense (this is where profit or loss could enter the picture). If you require the worker to perform the work personally, that’s a
sign of control and therefore indicative of employee status.

Providing assistants: There’s likely an employer-employee relationship if your company hires, supervises, and pays assistants for the worker.

Ongoing relationship: The worker doesn’t have to work for you continuously to be considered an employee; it may be enough if the worker gets assignments at frequently recurring, even if irregular, intervals.

Setting the order or the sequence of the work: If you determine what gets done when, it indicates you control how the work is performed. Allow an independent to decide his or her schedule, both day-to-day and for the longer term.

The Reasonable Basis Test:

While the common law test looks at the nature of the working relationship, the reasonable basis test is based on how the courts and the IRS have classified similar workers in your company or your
industry in the past.

The reasonable basis test is considered a “safe harbor.” That is, if you can show you had a reasonable basis for treating a worker as an independent contractor, the IRS is prohibited from
reclassifying the worker as your employee either prospectively or retroactively. You have a reasonable basis for treating a worker as an independent if one or more of the following conditions exist:

A court ruling in favor of treating workers in similar circumstances as non-employees; A ruling by the IRS (usually a Revenue Ruling) stating that similar workers are not employees subject to employment taxes;

An IRS Technical Advice Memorandum or Private Letter Ruling issued to your company, indicating that the particular worker isn’t an employee;

A past IRS payroll audit that didn’t find workers in similar positions at your company to be employees; or

A longstanding, widely recognized practice in your industry of treating similar workers as independent
contractors.

When hiring anyone, consultation with an attorney or a CPA or both is highly recommended. This article is intended for educational purposes only.

6 Biggest Mistakes Entrepreneurs Make

The motivation for starting a small business can vary greatly. For some it is about escaping corporate life, for others it is about maximizing income, and yet for others it’s about a more creative expression. Whatever the reasons for starting a business there are certain truths I’ve come to understand that effect all startups across the board to one extent or another.

1. Startups fail to spend money intelligently on marketing.

Many new business owners fail to maximize a return on their marketing investment. For instance, buying advertising space is often, at least for most businesses, money thrown out the window, especially if it is not placed properly. Advertising helps with brand recognition so yes, it has value. But for most startups a better way to spend money is to build relationships with centers of influence and to get found online. The easiest way to accomplish those goals is to pump money into your website, maximize the search engine optimization, and join networking groups and associations that see your company as an asset.

2. Startups fail to spend money on viable resources.

Piggybacking off the prior criticism of startups, many business owners try to cut costs wherever possible. However, as the saying goes, sometimes spending money is the only way to make money and break past the financial plateaus that most startups face. So the question is, where do you spend money? The answer is simple … in people that can perform the services that take away from your time building business, networking, or performing more meaningful/expert tasks. As a business owner, I don’t spend my time doing bookkeeping or taxes, or developing my website. Instead, I pay people to perform those services so that I can spend my time focusing on building relationships and networking. Even when it comes to more menial tasks, hiring a part time associate to perform those tasks ends up leaving room for more productive things.

3. Companies fail to set a standard for the target client they want to attract.

I see this all too often especially with those in the service industry. Don’t just take on any and all clients you can. Sometimes, a client will cost you more time and money then they are worth. Set a standard for who you want as your target/ideal client, and mold your services and fee structure to cater to that type of client.

4. As a business owner, simply failing to take care of yourself.

If you can’t take care of yourself, you can’t take care of others. When you lose sleep, don’t eat well, don’t exercise, get too stressed, your work product is the first to feel the impact. How you live gets reflected in your daily presentation. Failing to take care of yourself becomes a reflection on your professionalism for certain. But more importantly, if you don’t take care of yourself, then you’re missing the point of working hard. Work-life balance is an important concept. Don’t lose focus of what is important in life. When it comes to your clients, being responsive, reliable and professional are all very important. But unless you’re walking into surgery tomorrow, client issues can wait. The key is balancing the expectations of your clients. If you don’t want to be stressed at 11:00 pm then don’t answer the phone or client email at 11:00 pm. Your personal time is about recharging and becoming fresh for the next day. Your clients will respect your boundaries and you’ll be a more fulfilled business owner.

5. Absorbing too many financial sacrifices in order to gain favor with a client.

I represented a few contractors that will especially identify with this scenario. Yes, there are times you want to discount your services in anticipation of maintaining a long term relationship. However, there’s a fine line between treating a long term client to the occasional discount and letting your clients take advantage of you. Furthermore, when you continually provide non-requested discounts, you undervalue your services. Be confident in your services and project a sense of positive self-worth. You’ll be less frustrated in your business and your clients will respect you for it.

6. Failing to accept failures as a normal part of business.

All businesses experience failures. Failures are a natural part of the business life-cycle. What’s important is that you learn from your mistakes and set a concrete plan for rectifying the issues. Dwelling over your failures is not healthy, but analyzing them and approaching them with practical approach, or the right professional, is in fact a healthy business practice.