"I realized, in some cases, I have to hire individuals who are smarter than I am," said Ron Carter, who runs a public relations firm in Pasadena. "I came to the understanding I cannot do it all," he added.
"I thought it would give me independence and financial freedom; instead I got a lot of work," said Rafael Gomez. His chocolate-making business in Altadena is a one-man operation right now. And he's the man.
Building a successful company depends on understanding lots of complex issues before you earn your first dollar. Experts at the latest Drucker Business Forum in Pasadena shared advice on how to avoid the pitfalls of starting a new business.
"Too often, people get excited and want to get into business as quickly as possible," said Nina B. Ries, of the Ries Law Group. She said they don't think someone else has the same idea. "It's important to first define what's unique about your company and what will set it apart from everyone else," she added.
"I love Google, but you should not trust Google for legal advice," Ries said. Ries is an expert in legal matters involving small businesses and major companies. "You should talk to a lawyer and a tax professional upfront to determine how to best organize your business," she added. Much of the discussion at the recent forum was thick with legal and business terminology. For example, should you do business in your own name, or form a corporation or limited liability partnership? Experts say having a well thought out operating agreement can help avoid expensive legal disputes down the road.
"You leave yourself open to penalties if you don't get the right business licenses and permits in the city you plan to operate in," said Jonathan Jaffee, a business law and strategy professor at the Drucker Graduate School of Management.
Experts say set a 5 to 10 year goal. Set up a corporate bank account. Don't co-mingling company and personal money. Get patents, trademarks and copyrights to protect a product that is crucial to your business.
Experts say it's also important to put employee matters in writing, especially hiring and firing procedures. Hiring the wrong employees or independent contractors can ruin a start-up business.
"Most people don't think about these things right away, until they get into trouble," said Ron Carter, Managing Director of The Carter Agency. Carter was among the capacity audience at KPCC's Crawford Family Forum in Pasadena.
"You need to have a team working together; that's the hallmark of a successful company," said Carter -- the man who so values smart people.
[Reva Hicks is a freelance writer in Los Angeles who worked at Channel 4 News for more than 30 years.]