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Either fail fast… or don’t fail at all

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  By Richard Turner of Alpaca

Either fail fast… or don’t fail at all

A confession; the title of this blog bears little relation to the content. I wanted Alpaca’s first blog to avoid the usual, slightly tired, “5 top tips from 10 top entrepreneurs”.

We’d love to know what MMB’s readers want to know about all things legal – using a wide interpretation of “commercial”, to make this blog really useful.

For now, let’s start at the beginning. You’re considering starting your own business. What really matters, and why ?

Do I need a lawyer and an accountant ?

Not necessarily. You can do loads yourself using tools like Xero and SimplifytheLaw or Rocket Lawyer. They key is knowing when you’re out of your depth and a good advisor can help you steer a safer course. One thing’s for sure, in a start-up there is always something else to do. Work out what your time is worth and decide whether it pays to do it yourself or whether you’d be better off outsourcing the task and spending the time selling more stuff.

Must I have a shareholders’ agreement ?

If there’s more than one of you, it’s a really good idea. Even if you decide not to spend money drafting something with all the legal bells and whistles, the point is to flush out early – and write down – any areas of potential disagreement.

Common squabbles surround how much time partners will commit to the venture; salaries and how to value the business if one of you decides to sell.

What about written terms and conditions ?

Every lawyer will scream that they’re absolutely crucial but work out the risk. If you sell goods or services that are low value and paid for upfront, the lack of written terms for you might be low risk.

Once you add in the complexity of higher value services, delayed payments that you might need to chase or elements that could give rise to a refund or that rely on another provider, it’s probably a really good idea to have something written down to explain how it all works. By the time you’re in a fight with a customer/supplier, it’s too late to say “but I assumed….

Trademarks/IP


Again, weigh the risk. A small coffee shop, consultancy business or accountancy practice may have to worry little about trademarking a name (although look at Brewdog to see the alternative).  If however you’re trying to build the next Amazon, or you’re developing a new app which requires web or IT development – check that you’re not signing the rights over to the developer.

The golden rule:


Work out why you’re doing this and let that guide every decision. If you’re looking for a lifestyle business you might be more relaxed about the belt and braces than if the plan is to build the next Facebook, raise a million dollars or sell out in 3 years.

Business is like parenthood – there will always be somebody willing to tell you how it should be done but ultimately it’s yours to look after, so you get to decide who to listen to !

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