Important information for Entrepreneurs

As time goes by I will list links to sound accounting and legal recommendations that are very important for people who are founding a business.

Shareholder Agreements
Craig Yeung is a lawyer who is very active in the start-up community in Adelaide, South Australia. He has posted an article on shareholder agreements here.

Shareholder agreements are something I recommend to all co-founders. Ask your lawyer how you can create one for you company.

Company Constitution
This should be complimentary to your shareholders agreement and provide legal structuring for things such as early shareholder exits.

Exit Strategy
No Entrepreneur wants to stay around and build the day to day operations of the business forever. At some stage you may want to quit involvement with the company and just remain a shareholder, or you may find you wish to sell your shares completely.
None of this can be easily negotiated after you have incorporated. It is important that before you go into business with your founders you must discuss these issues and come to an agreement on how these matters will be resolved.
A lawyer can then structure the decisions into both the shareholders agreement and the company constitution.

Representation separate from your company and fellow shareholders
It is extremely important that you have quality personal representation by lawyers and accountants who do not already work for your company or any of your founders or shareholders. In times of conflict you will need someone on your side who can advise you without conflict of interest.

Power of Attorney
You may think it is unnecessary now, but you never know when poor health may prevent you from functioning adequately in your business. I have had an experience where illness caused me to lose a lot of money because I could not manage things at the time.

Income Protection Insurance
Another helpful safeguard if you fall ill. Your accountant should be able to help you with this.

Negotiation Skills
The most vital skill you can develop as an entrepreneur are expert skills of negotiation. This includes both listening skills and communication skills, but also strategic skills.
Understanding the people with which you are negotiating is paramount. What are their needs, what is their agenda, what are they not telling you.
There are a lot of good books on Negotiation and I suggest you read as many as you can to get e good understanding of the subject.

This is my absolute favourite book on negotiation “Getting to Yes”. It has a companion book equally useful called “Getting Past No”

I also like Herb Cohen

Other books are “Bargaining for Advantage”