Insights On: Business Growth

Greater Wilmington Business Journal

wilmingtonbiz.com

BUSINESS GROWTH CHRIS REINHARD

Of Counsel, Cranfill Sumner LLP

CATAPULT

REGGIE SHROPSHIRE Business Growers

May 20 - June 2, 2022

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wilmingtonbiz.com

May 20 - June 2, 2022

Greater Wilmington Business Journal

THE IMPORTANCE OF A CONTRACT

C CHRIS REINHARD Of Counsel Chris Reinhard is an experienced corporate transactional attorney with Cranfill Sumner LLP. His background concentrates in contracts lifecycle management, including negotiation, template and playbook drafting, vendor issue resolution, and breach of contract. Utilizing his experiences doing transactional work for some of the world’s largest financial, energy, and technology firms, he has gained insights in all types of contracts and corporate scenarios.

ontracts are the cornerstone of every relationship. Knowingly or not, and whether personally or through your business, you enter into numerous contracts every day: swiping your credit card, attending a sporting event, or having your neighbor over for a cookout.

These actions can create a contractual relationship and duties owed to one another. It is these contracts that keep the world moving and help keep things in check.

Despite the fact that we enter into many contracts daily, they are usually given little thought until it is too late. If there is an issue, the first thing an attorney will ask is “Is there a contract?” and “What does the contract say?” Unfortunately, the responses the attorney typically receives are “We never got around to it.” or “I think we have one, but we are not sure where we got it or what we signed.” This is almost always followed with not knowing where a copy of the contract can be found.

A contract is your biggest asset. A properly drafted contract can be worth more than any tangible item and can save, and even make you, money. Whether you are a new business just starting out, a large business that has been around for decades, or entering into a simple agreement with your best friend to show who will pay for expenses to upkeep and store the boat you both bought together, there will likely be an issue or disagreement at some point.

Let’s face it: people are quick to sue and everyone has a number. The bigger your business and the greater your worth, the bigger the target on your back.

A contract spells out what happens in instances where issues arise. It may dictate

which state law applies, where or how the parties might meet to try to settle the issue, and who is responsible for legal fees. It can cap damages, ensure that the appropriate amount of insurance is held and, of gaining importance during this day in age, protect you from inflation or set forth what happens should either party be prevented from performing due to things outside of their control. A contract enables you to hedge against risk.

It is important to note that you cannot do away with all risks in a contract. Many people are often quick to sign on the dotted line because they do not think they can make any changes to the contract.

However, being familiar with what is in the contract is half the battle. Awareness of what is in the contract enables you to know what you can or cannot do, or what affirmative actions you might need to take. It also allows you to shift the risk or mitigate the risk and better protect yourself elsewhere.

The next time you create a new operating agreement for your LLC, sign a new master agreement with a vendor, or sign that subcontractor agreement, be aware of the risks, pay attention to the details, and protect your assets. Sign and date the contract and store it in a location where you can keep track of it. One thing is for certain – it never hurts to know what you are signing.

910.777.6000 | www.cshlaw.com

Greater Wilmington Business Journal

wilmingtonbiz.com

May 20 - June 2, 2022

SURPASSING INCOMPETENCE AND GOING BEYOND

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f you own a growing business you will recognize this cycle …. Growth spurt … oh no, I have no idea how to run a business at this level …try a lot of things that don’t work … look inept in front of your team, customers, friends and family… finally figure out what works …feel awesome and that you’re in a great place … this isn’t enough, need to grow …growth spurt … rinse and repeat.

An issue that business owners and leaders consistently have to face involves growing into new levels of incompetency. The urge to grow may come from natural ambition, a growth addiction, or just out of the need for survival. A quote often heard in the business community is that, “If you’re not growing, you’re mdying.”

The problem with that idea is that it often takes entrepreneurs to a place they have never been before. Suddenly, there you are, without the knowledge, training and experience to handle this new level of business. Growth exposes a new, higher level of incompetence.

So now that you are here at a new level with more people depending on you than ever, what do you do to surpass this stage and go beyond?

SEEK KNOWLEDGE: The top inhibitor of growth is a lack of knowledge. Business owners that have stopped growing have typically stopped learning. There are more resources out there than ever, such as books, seminars, conferences, podcasts, audio books, industry groups and masterminds. As the saying goes, “The

more knowledge you have the easier building your business becomes.”

Learning every day can help you stay a step ahead.

GET SUPPORT: Navigating the complexity of building a business is exponentially easier with a guide(s).

There are some excellent resources out there that can offer knowledge, best practices, lessons learned and critical distinctions that can help you avoid land mines and lead the way to successful progression. Coaches, consultants, mentors, a self-created advisory board and other growthminded business owners can facilitate your journey to success.

TAKE ACTION: The most successful business growers I know are the ones that take action quickly and decisively.

They don’t get let anxiety about whether things will be right the first time get in the way. They just take a shot: Sometimes it hits and sometimes it fails miserably. Either way, they get the feedback that they need to adjust and proceed. Growth-minded business owners don’t see failures, just lessons learned. Oftentimes, a support group similar to what was mentioned earlier can be an accelerant for action.

If you have grown into a higher level of incompetence, CONGRATULATIONS! The critical next phase involves working to get the knowledge and support to take the actions you will need to break through, level up and see what the next stage of your business brings.

REGGIE SHROPSHIRE Business Growers Coach Reggie draws on extensive personal and professional experience to ensure that local business owners get the advanced tools and strategies they need to grow their businesses and achieve their goals. A United States Marine Corps veteran and former executive of a multi-million dollar home manufacturer, Reggie is perfectly suited to tackle the toughest obstacles owners face in building their businesses. Today, he is on a mission to make an impact in his community by helping hundreds of business owners grow.

910.471.2725 BusinessGrowers.co

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May 20 - June 2, 2022

wilmingtonbiz.com

Greater Wilmington Business Journal

GOOD TO GROW: COMPLIANCE AND CULTURAL CONSIDERATIONS FOR SMALL BUSINESSES

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rowing a company looks different for every small business owner but hiring and keeping the right employees are consistent challenges. Each step from a small, like-minded group of collaborators to a diverse workforce with a variety of roles, skills and personalities requires mindfulness. Let’s break the “zero to 60” discussion into four phases. Each stage is unique, and the organizational structures, CEO priorities, staffing challenges and key regulations are different.

PHASE 1: 1 TO 10 EMPLOYEES As the owner begins to add people, hiring carefully is critical. Ideally, you need people who are secure in a smaller company and who can take on more responsibility as the company grows.

To get to the next level, all staff must understand and feel like a part of the plans to grow the business. They should know their role but be comfortable with the idea that with growth comes change.

The other complexity that arises with added employees is state and federal legislation. The primary compliance laws that come into play during this phase include: • Fair Labor Standards Act (FLSA) • OSHA • Equal Pay Act • Immigration Acts • Polygraph Protection • Other laws protecting jurors, veterans, union activities and health insurance portability • Other considerations and state specific laws including unemployment, workers compensation, Wage Payment, Retaliatory Discrimination, New Hire Reporting, etc.

PHASE 2: 11 TO 19 We see the beginnings of an organizational structure.

Not everyone reports directly to the CEO anymore. The CEO may see their “team,”

the people that started the company, may no longer be a fit. Letting go of these people or placing them in different roles is painful but getting to the next stage may depend on it.

Here, we add two more regulations: 1. Civil Rights Act (15 employees) 2. Americans with Disabilities Act (15 employees) PHASE 3: 20 TO 34 The organization now transitions from being CEO-centric to having its own “identity”. It is time to consider creating a set of values that describes the organization’s expectations.

The CEO is required to focus on regular and effective communication more than ever. Employees expect information from their manager rather than directly from the CEO. Messages must cascade efficiently and accurately to ensure unity.

During this phase, add: 1. The Age Discrimination in Employment Act, or “ADEA” (20 employees) 2. Consolidated Omnibus Budget Reconciliation Act, or “COBRA” (20 employees) PHASE 4: 35 TO 60 The formal documentation of processes and key systems provides the foundational building blocks to manage here. The company is growing up. Experienced managers must provide employees with tools, guidance and regular feedback.

Processes must be formalized, since remembering “what we did last time” is no longer effective.

Your employees feel less frustrated, work fewer hours, and are more productive in Phase 4. If you’ve hired poor managers (“doers” instead of “leaders”), you’ll find good employees leaving.

During this phase, add two regulations: 1. Family Medical Leave Act (50

employees) 2. The Affordable Care Act (50 employees) SUMMING UP The zero to 60 process is exciting and sometimes frustrating, but one thing stands true: good hiring is key to successful growth. Managers shouldn’t just be hired for skill but also for the potential to lead confidently. They should share their vision beyond day-today tasks while investing time, developing relationships and coaching teams.

Catapult Members have access to experts skilled in HR and the business of people. From talent recruitment to employee retention and customized professional development, Catapult is your trusted partner. Focus on organizational priorities with confidence knowing your business is compliant, competitive and empowered.

866.440.0302 www.letscatapult.org Catapult™ is your employer’s association dedicated to educating and inspiring the working world. By solving your HR and employment law challenges as our own, we ensure Member companies are places people are proud to work. With a Catapult Membership unlock exclusive discounts across our portfolio of services, special employee and team trainings, and access to peer networks (and so much more!) to propel past the competition.