The Weight of the Business World

There’s an old saying that business owners refuse to work a 40-hour-per-week job for someone else, so instead they work 80+ hours for themselves. We see this play out time and time again with many entrepreneurs. Entrepreneurs are by nature problem solvers and take great pride in being able to solve challenges themselves. But as the world faces the challenges of the pandemic, entrepreneurs are feeling the increasing weight of the world on their shoulders, which can lead to risky shortcuts to “save” a few dollars; a price that can end up have detrimental effects on their business later down the line.

Speak to an entrepreneur and they would likely have several examples illustrating how their business is unique and innovative. They know their business model inside and out and can tell you exactly what sets them apart from their competition. But more often than not, their contracts and agreements do not reflect this. Many end up using an internet “template” agreement they have been using since forming their company, only to learn it does not apply in the manner they think it applies or, worse yet, does not say what they think it says. Often times, these self-made templates are missing vast areas of important information, such as a license grant in a software agreement, or third-party disclosures in a privacy policy.

Preparing a set of contract templates for a company may not be nearly as costly as the owner thought it would be, especially in light of the risk to the business in the event the company needs to enforce the agreement. This seems to be the primary reason early entrepreneurs go at it alone: fear of spending too much capital on anything but product development or marketing. Although not a scientific analysis, the tendency to prepare documents themselves favors entrepreneurs who bootstrapped their companies, rather than those who had seed or angel funding. Once a bootstrapped company reaches a level of runway in its owners’ minds, they tend to be more willing to seek assistance from legal professionals.

The risk in preparing legal documents yourself is not worth the reward of saving a few dollars in the company’s early stages. There are occasions in which companies are too new, and their business models/product development is still evolving, and we recommend they wait to have any documents prepared (e.g., EULA, terms of services, privacy policy, etc.). That is part of having a trusted relationship with a third-party professional who genuinely takes into account their clients’ needs and best interests.

Before spending hours of your time misdirected from your product or service, have a conversation to find out what the cost really would be to have legal services performed by a professional. It might not be nearly as costly as you imagined, you might appreciate the extra hours in the day to devote to expanding your business, and you might feel a weight being lifted off your shoulders.