What Thomas Jefferson Might Say About Your Business Arrangements (Part 2)
March 16, 2016 - Posted by: admin - In category:
If Thomas Jefferson were to have a gander at your business operations, what would he say? Wise people listen to other wise people.
In the last post, we introduced the idea that part of what made the Declaration of Independence so powerful, clear and durable was the fact that it was written, not just an oration. We also noted that Mr. Jefferson was qualified by virtue of his legal education and training (and life experience) to write this historic paper. Thomas knew what he was doing and what would result (at least in part) from his publication. We then analogized to business operations and noted that given human nature and our propensity to forget and remember selectively, we are wise when we memorialize things in writing and even more wise when we retain the services of a competent legal professional to draft documents that work for us and our situation. It just makes sense that when it comes to something that will serve as the foundation for our business enterprise (i.e. hopefully the source of significant income and other benefits for many years), we enlist someone who is qualified to know what to write, how to write it and what will result from our adoption and adherence to such writing. In like manner, if you are going to build your “dream home” and spend thousands and thousands of dollars in the process, you don’t decide to engineer, dig and build the foundation for that structure yourself–nor do you enlist the services of whomever is the cheapest alternative. Rather, you will do your research and carefully select someone with the expertise to do the work correctly.
All of that seems rather straight forward and almost within the realm of “no duh” stuff, right? I mean who would ever undertake to invest money, time and other resources in a business arrangement, with one or more business partners, and do so under the “protection” of an oral understanding (i.e. no written agreement(s))? Who would do such a thing? You might be surprised to learn that a very high percentage of business owners in Utah and elsewhere do this very thing, on a regular basis. But surely, such is the case only with “startup” enterprises, right? This is not applicable in situations where people are making real money and where the business has operated for more than a very short period of time. Wrong. We find that this propensity to operate without proper written agreements and other legal protections is as common among the successful businesses as it is among the startups. (perhaps this is also akin to the reality that older and more experienced drivers are just as likely to drive without their seatbelt as the young and newly minted drivers). Maybe at this stage you are thinking that if we are discussing something that is commonplace, there is nothing to be concerned about and we can just move along and forget it. To that, I would remind us of a quote from Tolstoy, “Wrong does not cease to be wrong because the majority share in it.” (Leo Tolstoy, A Confession). Put another way, if you see 10 people on the road driving without their seatbelt (even 10 people all driving next to each other), does that make you feel more safe and wise following their seatbeltlessness?
If you find yourself in this similar situation of having a business or being a partner in a business and not having proper legal agreements in place, take heart by the fact that it is not too late to do something about it. The choice is yours.