Reib Law November 2018

REIB LAW

SHATTERPROOF NEWSLETTER

NOVEMBER 2018

WWW.REIBLAW.COM | 940.591.0600

wants to go in another. I just helped a client with that last week. He was in a bad situation and needed help getting out of a partnership. I helped him set up the pathway for an amicable parting, and it worked. We were able to set up a buyout where the exiting shareholder was able to get out what they had put in. Far too often, this isn’t the happy ending we see when business partners go their separate ways. Generally, when a partnership is coming to an end, the parties involved become tense, and it’s more challenging to be reasonable. When the stakes are that high, a 50-50 split doesn’t work anymore, and negotiations become deadlocked. What happens then? The biggest mistake I see a lot of people make is creating an equal partnership from the beginning. It might sound fair when you are first setting out, but what happens when you decide to open a new venture? That 50-50 split just doesn't work anymore. There’s no way out of it, and you’re both stuck in a partnership you don’t want to be in. If they leave the business, it cuts out value for you and vice versa if you leave with that 50 percent of the profit. It doesn’t make sense anymore. How do you get paid? How will they get paid? That’s why I tell anyone entering a joint venture to put together a legal document from the beginning that lays out some of these points. This legal document is a buy-sell agreement. With a buy-sell in place, you have a set of rules for dealing with a business disagreement. This forethought safeguards your business. It’s not because either of you aren’t quality people; you wouldn’t go into business with them if they weren’t. Those I’ve met who want out of partnerships are all good people; they just have a different idea of how the company should run. If you don’t have a plan to deal with that discrepancy, you put everyone in a tough place. The successful partnerships I’ve seen put everything in writing. They’re upfront and have a solid relationship. These partners keep that solidity because they’ve made a written plan for how they’ll deal with everything. It builds trust, which is key to cultivating that partnership. You can’t know from the beginning what the future holds, and having a plan in place will mitigate any unforeseen circumstances.

CULTIVATE YOUR RELATIONSHIPS WHY DEFINING THEM IS KEY TO YOUR BUSINESS'S SUCCESS

L ike many others, our family travels to spend time with loved ones over the holidays. For the last 27 years, my wife and I have alternated spending Christmas at our parents’. My wife, Bebe, is a native Texan and her family lives there. I am a Sooner and grew up in the Tulsa area. My parents still live in Tulsa, and we will be headed there this year for Christmas. Still, times do change, and with that comes new traditions. Since my oldest son is going to college in Tulsa at Oral Roberts University, he can only come home between his studies on some weekends. Our traditions might be a little different this year, but as long as we’re all on the same page with our family members, we can make this Christmas as memorable as any other. It’s not that different from a business partnership. When I use the term, “partnership,” I am referring to small corporations with multiple shareholders or LLCs with multiple members. You set forth your plan, goals, and vision for your business. But along the way, you might encounter changes. Maybe your vision for the company begins to go in one direction and your business partner

–Scott

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AN ACT OF GRATITUDE OR A HOLLOW GESTURE? SAY THANK YOU LIKE YOU MEAN IT

GIVE THE GIFT OF FOOD We all need to eat, so what better way to say thank you than with a sweet treat? You may not be aware of any unique dietary restrictions your client may have, so it’s best to play it safe. A tin of cookies or some peppermint bark will delight almost anyone, but if your client is a fitness company, they may prefer a healthier treat, like a fruit basket. DONATE TO A CLIENT’S FAVORITE CHARITY A great way to show that you care is by helping a client give to their favorite charity or cause. If you happen to know a charity near and dear to their heart, you can make a surprise donation in their name, or you can reach out and ask them directly. It’s the season of giving, after all! The best way to make your thank-you feel authentic is to genuinely be authentic. Yes, an unexpected gesture can reflect well on your company and encourage clients to talk you up to their friends and family, but potential referrals should be a perk of giving back, not the main goal. Practice genuine gratitude this Thanksgiving, and it will be well-received.

Thanksgiving is a time to express your gratitude to the people in your life. During this time of year, plenty of companies talk about how thankful they are for their clients. But more often than not, to those clients, words of thanks feel like just another sales gimmick. If you want to show your clients how much they mean to you, here are a few ways you can express that thanks authentically. SEND A THANK-YOU NOTE Getting a letter in the mail is a nice feeling. Taking the time to send a client a handwritten letter is the kind of pleasant surprise that really makes someone feel good. Obviously, a handwritten note will take more time to craft than an email, so it’s okay to send fewer notes in order to really make an impact. Find some tips for writing awesome thank-you notes at Helpscout.net/blog/how-to-write-a- killer-thank-you-note.

HOWDY, PARTNER! ESTABLISHING YOUR BUSINESS PARTNERSHIP ON THE RIGHT FOOTING

who you give a small percentage of stock to so they have a vested interest in your company’s success. You might consider having your own counsel to turn to for legal questions; whether or not this makes you feel more secure will depend on your situation. A lawyer can help you put terms into writing and create a document that will have the right pieces in place to strengthen your partnership. When you’re looking for an attorney to help you with legal documentation around your business partnership, contact Reib Law. Attorney Scott Reib has a wealth of experience helping Fortune 500- and Forbes-featured clients find the best outcomes with their business partners.

is putting in when it comes to capital and assets. You’ll also want to address an exit strategy. What are the terms for dissolution? Down the road, you or your partner may decide to sell, or one of you may be ready to retire. If a partner dies, their heir will inherit the partnership unless a legal plan is in place. You probably didn’t sign up to do business with their children. Address major changes like this in your contract through a buy-sell provision or make a separate buy-sell agreement. If you reach an impasse during a discussion or decision for your company, how will you handle it? Consider bringing in a neutral third party who can hear both pitches and help you find the best one — not just the one you feel most passionately about. This can be an outside paid consultant or someone

Like any relationship, you and your business partner confront the downhill cruise and the uphill battles together. You went into this venture because you share the same passion about your business. Just like any relationship, you’ll need to nurture this one if you want it to be successful. This means having real, upfront conversations about how you’ll handle any less-than-ideal situations. That way, you'll have a plan in place if they occur. Before you go any further in your venture, sit down with your partner and take some time to consider how you’ll handle the tougher topics. Putting a legal contract in place from the beginning is the No. 1 step that will help mitigate many of the issues that partners run into. This should include each partner’s duties and responsibilities, including what each

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3 BIZ LESSONS COFFEE SUBSCRIPTIONS CAN TEACH YOU

T he prospect of having coffee delivered directly to your home every week without fail is an enticing one. No one wants to wonder where their next cup is going to come from. This demand made subscription services a no- brainer for companies like Driftaway coffee. More and more businesses are turning to subscription-based services, and coffee is no exception. Considering the predictable revenue source it provides and the sense of community fostered between consumer and business, it’s easy to see why. Here are a few things you can do to keep up with the industry’s move toward subscriptions. UP QUALITY AND ADD VALUE With some coffee subscriptions, subscribers can opt to have a bag delivered directly to their door from the company itself. This kind of service not only adds a personal touch; it offers more predictability, so the customer knows when they’ll receive their next bag. Some companies even include samples of new roasts to try. How will your service add value to your clients? Could you do weekly check-ins or include a bonus template that’s not available to nonsubscribers? Give subscribers the inside treatment they’ve signed up for. PROVIDE OPPORTUNITIES FOR CUSTOMIZATION Although this is a subscription, each one doesn’t have to be identical. The most popular coffee subscription companies

offer consumers a few choices: Whole beans or ground? Dark roast or light? The same variety each week or a surprise waiting for you in the mailbox? Customization helps consumers feel like you’ll provide services that fit their needs. What you choose to customize might depend on your industry. Maybe it’s the number of one- on-one meetings they have with you or a logo customized specifically for them. Go for quality over quantity. Too many options can also be overwhelming. CREATE BUY-IN Like the community-supported agricultural programs before it, a key part of coffee subscription is feeling like you’re part of something bigger — a community. When they drink that cup of coffee, subscribers think about the farmers featured on the bag. Driftaway Coffee takes this one step further. Their website includes a “Farmers Feedback” button, where members can share their thoughts about the coffee directly with the farmers who grew it. It’s that sense of community and relationship that clients crave when they sign up for your service. Their interactions with you and your staff, from email to in-person meetings, should be positive and easy to access. Put systems in place to create channels of open communication between you

and your clients. After all, they’re already your fan, so let them become the No. 1.

SPICY, CREAMY SWEET POTATOES

TAKE A BREAK

INGREDIENTS

1. Heat oven to 375 F. On a large sheet pan, bake potatoes until very soft, approximately 75 minutes. 2. Let potatoes cool until they are safe to handle, then peel and mash. • 5 pounds sweet potatoes • 1 cup canned coconut milk • 1 tablespoon Thai red curry paste • 1/2 cup dark brown sugar • 4 tablespoons unsalted butter • 1 tablespoon kosher salt DIRECTIONS

the mixture, salt, half the sugar, and half the butter to potatoes.

4. 30 minutes before serving, heat oven to 425 F. Spread potatoes in a baking dish, cover with foil, and bake for 20 minutes. 5. Uncover potatoes and dot with remaining butter and sugar. Broil until brown, crusty, and delicious. Serve hot.

3. In a small saucepan over low

heat, combine coconut milk and curry paste. Once mixed, add

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What Are Companies Thankful For? INSIDE THIS ISSUE 1 2 2 3 3 4 Steps for a Stronger Partnership Spicy, Creamy Sweet Potatoes True Crime Makes for Gripping TV

What You Need to Define Your Business Partnerships

Lessons From Coffee Subscription Services

3 TRUE CRIME SHOWS YOU HAVE TO SEE MOVE OVER, SITCOMS, THERE’S A NEW TREND IN TOWN

T here’s a genre of entertainment that many Americans are afraid to admit is their secret obsession. It’s as if you’re hiding a secret that you desperately want to confess, but you’re afraid of the judgment and concerned looks from your friends. Then one day, you muster the courage to casually mention a docu-series you watched — hoping for absolution but concerned the jury won’t understand — and the floodgates open. Suddenly your closest friends and family have passionate opinions on the justice system and can tell you they know exactly who murdered who and how. Deep down inside, everyone loves a good mystery. Here are three of the best. ‘MAKING A MURDERER’ Directors Laura Ricciardi and Moira Demos take viewers through an experience that feels like the most maddening game of ping pong ever played — in any given episode, your view may bounce from one polarizing opinion to another. After watching 10 mind-bending episodes of Steven Avery and his attorneys going back and forth during the trial, you’ll have questions that demand answers. So many, in fact, that

Netflix has confirmed the production of a second season and a spin-off series titled “Convicting a Murderer.”

‘THE JINX’ Forty years of conflicting reports on three murders make for one compelling HBO series. Robert Durst goes under the spotlight after speaking for the first time about the death of three people connected to him. A web of lies, convolution, and gritty storytelling comes to one bone-chilling conclusion that will make your jaw drop. ‘THE STAIRCASE’ Did Michael Peterson kill his wife? Did the American justice system tear apart the dream it so righteously attempts to protect? What is considered fact in a murder trial? These are just a few of the questions you’ll contemplate as you go on a 16-year journey told over 13 gripping episodes. Questionable expert testimony and crime scene evidence are juxtaposed with a competent defense team and a convincing defendant, making for a story that begs viewers to take sides. In the end, the only fact you’ll know to be true is that you can’t trust your intuition.

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