3 Foundational Concepts that Entrepreneurs Need to Focus on When Starting Their Business – Dayna Thomas, Esq.

Today on the Atlanta Small Business Show, we’re pleased to welcome back Dayna Thomas, Esq., one of Atlanta’s leading entertainment and entrepreneurship attorneys, and the owner of The Law Office of Dayna Thomas, LLC. Thomas is an expert at assisting entrepreneurs and entertainers with reaching their goals, protecting their businesses, and building strong personal and professional brands. She is also the best-selling author of the “Entrepreneur’s Guide To Building A Solid Legal Foundation.” 

Transcription:

Jim Fitzpatrick:
Hi, everyone. Thanks so much for joining us on The Atlanta Small Business Show. I’m Jim Fitzpatrick. Our next guest is Dayna Thomas, who is an entrepreneurship and entertainment attorney. She’s also a best-selling author of The Entrepreneur’s Guide to Building a Solid Legal Foundation. Dayna, thank you so much for joining us once again on the show.

Dayna Thomas:
Absolutely, thank you so much for having me. It’s always a pleasure, always new updates and it’s very exciting for me to chat about entrepreneurship.

Jim Fitzpatrick:
Yep, absolutely. A lot of people listen to all the segments that you’ve given us here on the show, and so we appreciate that. Right now, these are crazy times. It’s been a while since we spoke because of COVID. You haven’t been able to come into the studio, it hasn’t been the normal programming, but we’re so happy to have you back. What are you seeing out there right now? I mean, what are some of the things that your clients are calling you about? What are some of the concerns that entrepreneurs have?

Dayna Thomas:
You know what’s so interesting? When we listen to the news, we hear about all of the negative things that’s happening with small businesses, they’re shutting down, they’re losing money. It’s interesting to hear that in at least my world of entrepreneurship, I have seen the opposite as it relates to my clients. Actually, I’ve seen that a lot more people are starting businesses during the pandemic. I can see the reason, it’s the cause and effect with the pandemic. A lot of employers are unfortunately laying off employees, that’s the negative side of it. However, those employees are now either forced or excited about starting their businesses.

Dayna Thomas:
A lot of times, entrepreneurs start their businesses out of their passion. Even though they might be an employee, a lot of their desires and their dreams are around starting their own business, but for some reason something is holding them back from taking that leap of faith. Here comes the pandemic, where the decision is made for them and they’re starting their businesses and taking it as a sign that now it’s time to do something for themselves.

Jim Fitzpatrick:
That’s right.

Dayna Thomas:
I’ve actually seen a lot more clients, not only from my business, but just entrepreneurs in general who are taking advantage of the pandemic to break away from being an employee, which they’re not happy with, and go into their passion of starting their own business. I’ve seen that quite a lot.

Jim Fitzpatrick:
That’s great, that’s great. What are some of the things, for those people that are listening right now and that you just mentioned, if they happen to fall into that category of starting a business, what are some of the foundational things that they need to focus on while starting that new business?

Dayna Thomas:
Absolutely. There are three main things that entrepreneurs need to focus on. It’s great, I love when they reach out to me in the very beginning stages, because even if they’re not at the stage of where they can invest in an attorney upfront, at least they’ll have the information and I provide a roadmap. The top three things, the first thing that I would say is your trademark for your grand ownership, because that’s the fun thing to do, right?

Jim Fitzpatrick:
That’s right.

Dayna Thomas:
The first thing that aspiring entrepreneurs do is they want to think of a name, right?

Jim Fitzpatrick:
That’s right.

Dayna Thomas:
They want to think of a name for the business-

Jim Fitzpatrick:
Get a nice looking logo.

Dayna Thomas:
Exactly. Before they even decide what the actual services are going to be, it’s the name that catches them.

Jim Fitzpatrick:
That’s great.

Dayna Thomas:
The first thing to do is to make sure that name is even available for you to use for your business, because you don’t want to start promoting a business name, a brand or a logo, even put it on your products, put it on all of your social media, your website, and then someone else already has a trademark for that.

Jim Fitzpatrick:
That’s right.

Dayna Thomas:
Even if they don’t have a trademark, there may be another business that is pretty popular that uses that name. The first thing that’s-

Jim Fitzpatrick:
Or even close to that name, right?

Dayna Thomas:
Or even something close.

Jim Fitzpatrick:
It could be something that’s close to that name and you think, “Well, no, it’s not exactly the same,” but in reality, they may say that that’s an infringement on their rights because it’s too close.

Dayna Thomas:
Absolutely. Trademarks protect not only the same exact name, but anything that is confusingly similar. This is the thing, the definition of confusingly similar depends on a wide variety of factors on a case by case basis. Just changing the spelling is not going to help or just rearranging words may not help. It really depends, which is why a lawyer is something that you should work with for your trademark. There are some other things that … I’m a real attorney, meaning I’m not going to tell you to go to a lawyer for every single thing, there are certain things that you should prioritize. Trademark is definitely one of them.

Jim Fitzpatrick:
That’s right, okay.

Dayna Thomas:
The last thing that you want to do is have a cease-and-desist letter and your business just started, so get that out of the way and own your brand.

Jim Fitzpatrick:
That’s right, that’s right.

Dayna Thomas:
The second thing is your LLC, your business entity. What we want to do is make sure, as a entrepreneur, that the law sees your business as a separate person than you. The way that we do that is we protect our limited liability. That way, if there are ever any legal liabilities, any financial liabilities for the business, it’s not going to affect you, the business owner, personally, meaning that your home will be safe, the money in your bank account, other wages, your car. All of those personal assets will be safe and it will just be a situation with the business. You file your LLC, that’s the first stage of that.

Dayna Thomas:
I am saying LLC on purpose. I know we’re hearing a lot corporations. What I’ve seen is that a lot of entrepreneurs think that it’s cool to have a corporation. However, an LLC does provide you the strong protection that a corporation does. In very limited circumstances would I recommend a corporation. You can convert from an LLC to a corporation, if you needed to at a future date.

Dayna Thomas:
On top of that, I would also say contracts. Contracts, I will say, can be sometimes be a bit intimidating.

Jim Fitzpatrick:
Absolutely.

Dayna Thomas:
It can be. That would not be something that I would recommend to just get a template from online. However, something is better than nothing. But doing it the right way, having a contract that is customized for your business is absolutely what you need. I just want to encourage entrepreneurs out there, if you’re going to do this, if you’re going to be an entrepreneur, do it the right way. I promise, if you invest in your business upfront to provide that solid legal foundation, you will be able to build that business and not have to look over your shoulder.

Jim Fitzpatrick:
That’s right. You had made a comment early on just now about if you don’t have a whole lot of money for an attorney or maybe you didn’t put any aside, my recommendation, as an entrepreneur and the founder of a number of companies, is that if you don’t have money set aside for an attorney, you can’t afford to go into business yet. I mean this from the bottom of my heart, because you’ve got to have that legal advice early, early on. You’ve got to have a Dayna in your corner. If you don’t, then think twice about starting the business.

Jim Fitzpatrick:
Because I think that’s something a lot of people jump over, don’t you, Dayna? Where they do a ready, shoot, aim, and they say, “Oh my gosh, now I’ve been in business three months and I didn’t know you had to have X and you had to have Y and you had to have Z. Then I signed a contract and I didn’t realize I signed personally on it,” or to your point, “I started a company and now I have to change the whole brand and the logo, because guess what? We didn’t check out to see if there was a name out there.”

Jim Fitzpatrick:
But there’s also so many other things. If you go into a business with a partner, you think it’s all fun and nice and we get along and we would never fight and there’s no partnership agreement, and all of a sudden, something happens in that business. One person says, “Well, no, I think it should be green,” and the other one says, “Well, no, I think it should be orange,” or black or whatever the case might be. Lo and behold, you’ve got a huge fight on your hand with no partnership agreement in place.

Jim Fitzpatrick:
I highly recommend those entrepreneurs and business owners that are, that are ready to launch a business or step into the entrepreneurial world to get an attorney. You want to have a good accountant on your side, you want to have a really good attorney, and not just any attorney. You want to have somebody like Dayna, that specializes in helping small business owners on that early stage and then also growing with them. There’s a lot of big attorneys out there, especially in Atlanta, that may take your money, but it’s not really their specialty. The number one thing you want to ask an attorney is do you specialize in helping put together businesses and covering all of the basis, right, Dayna?

Dayna Thomas:
You hit it right on the head. I want to touch on a few points. When we start businesses, when we become entrepreneurs, we leave our jobs, we become full-time entrepreneurs, the goal is to make as much money as possible, become millionaires, billionaires, whatever the goal is. You have to think that in order to get to that level, you have to invest in your business. There’s no way that you can nickel and dime your business and then expect it to be this multimillion dollar success. That doesn’t happen.

Jim Fitzpatrick:
That’s right, that’s right.

Dayna Thomas:
The difference between successful entrepreneurs and unsuccessful entrepreneurs, in my opinion, is that you have to be willing to do whatever it takes, right?

Jim Fitzpatrick:
That’s right.

Dayna Thomas:
Especially with a solid foundation, like you mentioned, the attorney, who’s going to help you to mitigate your risks, who’s going to help you to avoid the liabilities and avoid as many mistakes as possible. Because when you’re making money, attorneys and accountants help you to keep as much money as you can when you’re making it, right?

Jim Fitzpatrick:
That’s right.

Dayna Thomas:
But if you’re making money and all these liabilities and these risks and you’re nervous to really take it as far as you can because you really know that you didn’t do things the right way, that’s really not the goal as an entrepreneur. You wanted to take it as far as possible. Absolutely, that your business is your baby and so treat it with care.

Jim Fitzpatrick:
No question about it. We had one entrepreneur that we spoke to that, as everybody does, they run out and they go online and they see who can build a great website because our companies now, every company, needs a really good website. This happened to be a e-commerce type business. They were up and running and the guy said, “Send the contract over,” or, “I’ll send you the contract. Sign it, send me the deposit, we’ll get going on this.’ They did, and it was a beautiful website. Later on, the company’s growing and growing and they said, “Well, we want to do some other things with our website, so if you would just send over whatever you got to do so that we can move on or whatever.” The guy said, “Well, you didn’t read your contract. It’s actually our website. We don’t sell you the website. You signed the contract. You’re only leasing the website.” Lo and behold, this poor individual said, “Where was that?” Well, it happened to be on page six under 14 different paragraphs.

Jim Fitzpatrick:
But what happens, as small business owners, they didn’t bring it to an attorney. The attorney would have probably brought that out and highlighted it and said, “Just so you know, you’re not going to own this website,” because nobody wants to be in that situation. But nobody caught it, and sure enough, they’ve paid thousands of dollars to this company and they still don’t own their website, nor would they ever own it. They’re just leasing it, and that has got a whole slew of problems to it.

Jim Fitzpatrick:
Little things like that, that come up that you don’t think of, that an attorney does think of when you ask them to review all of your agreements. It could be a contract, somebody comes to work for you, your first employee says, “Well, scratch out a contract and I’ll be happy to sign it.” You want make sure that that thing is in your favor in a very big way so that employee can’t run off with the store, so to speak. These are all-

Dayna Thomas:
That happens often, Jim, it really does. It happens very often, even with logos as well.

Jim Fitzpatrick:
It does.

Dayna Thomas:
Because intellectual property is something that every entrepreneur needs to know and understand, right?

Jim Fitzpatrick:
So true.

Dayna Thomas:
Intellectual property, the value that comes from your mind, right?

Jim Fitzpatrick:
That’s right.

Dayna Thomas:
Essentially that’s the easiest way that we can put it. When it comes to intellectual property, specifically copyright, trademark is one type of intellectual property, which I mentioned before. Copyright is one, the default law when it relates to copyright, which protects works of art or authorship, is that whoever creates it, owns it. Whoever creates it, owns it. Even if you pay that person a million dollars, they will still own it and you will have what’s called an implied license to use it. By the exchange of money and they’re providing that logo or the website to you, there’s an implied license that you can use it. However, that license can be revoked at any time. When your brand blows up and it’s a multimillion-dollar company, guess who’s going to come knocking at your door? That person who designed that logo and they know that they didn’t transfer the copyright to you. So the-

Jim Fitzpatrick:
And it’s a simple thing. If they got with you, Dayna, and they said, “Hey, I want to,” those you’re going to put together the necessary document that says, “Great,” but as soon as they’re done with that work, we’re going to own it as a company, not the person that designed it, because that’s all you need in order to do that, right?

Dayna Thomas:
Absolutely. The only way that you can transfer copyright is by written agreement that is signed by the creator. Just like you can’t sell property without having a written agreement, the law, Congress, they see it the same way as with copyright, all right?

Jim Fitzpatrick:
That’s right, that’s right.

Dayna Thomas:
There’s no verbal agreement with copyright transfer. It has to be in a contract and explicit that it’s a copyright transfer and not just permission to use it.

Jim Fitzpatrick:
See that? See that? You’ve already gotten here on The Atlanta Small Business Show, thousands of dollars worth of phenomenal legal advice. Although, the disclaimer here is it’s not legal advice, right? Secret attorney at the end of the day here. But if you do not have an attorney or you don’t like your attorney and he or she is not as well versed in this as Dayna Thomas is, get with Dayna. I’m sure she’s happy to take on new clients and help you all the way through the entire process. She has literally written the book on small businesses and the steps that you need to take.

Jim Fitzpatrick:
I want to thank you, Dayna, so much for joining us here on The Atlanta Small Business Show. Our viewers get so much out of your visit, and in 2021, I’m going to make it a point to have you on every month because our viewers say, “Where’s Dayna on this?”

Dayna Thomas:
I love it.

Jim Fitzpatrick:
So please join us once again.

Dayna Thomas:
Absolutely. Thank you so much for having me. It’s always a pleasure to chat about entrepreneurship. One thing I’d like to mention is I focus my firm on trademark matters, brand protection, all of that. We focused so much during this conversation on brands because it’s just so important for entrepreneurs.

Jim Fitzpatrick:
Yeah, no question.

Dayna Thomas:
But of course, I love chatting about all aspects of business law, entrepreneurship, because it really is my love and my passion. Anytime you need advice or anything like that, Jim, you know who to call.

Jim Fitzpatrick:
There you go, and there it goes everyone that just heard that, the same holds true for them.

Dayna Thomas:
Absolutely.

Jim Fitzpatrick:
Give Dayna a call if you’re in need of an attorney or you’re thinking about it, Even if you’re thinking about opening up a business. You don’t have to open up a business in order to sit down with somebody like Dayna, or Dayna, to say, “Hey, here’s what we’re thinking about. What’s your take on this? Let me get your feedback.” Sometimes that will be the deciding factor, is to hear from a professional like Dayna as to whether or not you want to invest in something like this.

Dayna Thomas:
Absolutely.

Jim Fitzpatrick:
Whether it be a small business or a franchise or what have you. Again, Dayna, thanks so much, really appreciate it. We’ll definitely have you back on the show. Stay well, go get vaccinated, as I’m trying to do right now.

Dayna Thomas:
I will. Thanks so much, Jim. It’s been a pleasure.

Jim Fitzpatrick:
All right, thanks.

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