Pivoting Your Business

February 01, 2021 8:00 AM | Website BWN Admin (Administrator)

By Heather Yeung

The pandemic has changed our lives in more ways than we can count.

I, for one, was laid off in March and quickly pivoted into the role of home-school teacher. Over the summer, I pivoted to gardener, groundskeeper, interior decorator, home improvement specialist, and general outdoor enthusiast. As the summer drew to a close, and the world began to accept quarantine life as the new normal, the job market in my industry picked back up. I secured a position that allowed me to continue to do what I love – help small and medium-sized businesses with their legal needs.

While I was busy decorating my home office and trying to grow tomatoes, the women in my network were pivoting in much more dramatic ways. Some had been laid off like me and were busy finding a niche in a new industry. Others beefed up on their technical skills and began to offer their services online. Some worked to develop their side hustles into full-fledged businesses. Still others began to tap into new industries created or boosted by the pandemic itself. In my opinion, each of these pivots requires input from a legal advisor.

I once worked with a successful business owner whose previous attorney had not taught her the importance of maintaining her state registration. It turns out that her business was seven years behind in filing personal property taxes which was impacting her ability to take out a loan for a new office space. I was able to help her straighten out her records and her business is now doing better than ever.

I’ve also found that most of my clients are unaware of the very important differences between employees and independent contractors (sometimes referred to as 1099s). Misclassification of workers is a common mistake that carries the risk of a federal lawsuit with extremely high penalties. If your business has grown to the point that you are ready to take on an employee, or, if you are joining a small business yourself and are unsure about your status as an independent contract or employee, it is critical that you obtain good legal advice.

I review contracts for my clients on a regular basis, and it is astounding how often they are poorly drafted. One local business owner’s contract contained a dispute resolution provision that mandated arbitration in Paris, France instead of a local remedy. Another common error is a contract that is signed by the owner of the business instead of the business itself. It may seem like a minor detail, but an incorrect signature could cause liability to the owner personally instead of the business– a potentially costly mistake.

Changes to how we do business and what kind of business we are doing are part of our new reality. For the past year, my colleagues and I have been able to help business owners apply for PPP loans, review franchise agreements, and check for favorable pandemic-related clauses in employment contracts. For business owners and entrepreneurs, 2020 and 2021 are the years of the pivot. As you are pivoting your business, don’t forget to contact your business lawyer to make sure that you are aligned for success.  

About this Month's Featured Sponsor

Kagan Stern Marinello & Beard LLC  Heather Yeung

Heather Yeung is a business lawyer at Kagan Stern Marinello & Beard, LLC in Annapolis, Maryland. She and her colleagues offer advice on a wide range of business needs including formation, corporate documents, transactions, employment, real estate, trade secrets, and general commercial litigation. Heather and her family are Howard County residents. She is an active supporter of the Howard County Conservancy, the Candlelight Concert Society, and sits on the Board of Directors of the Business Women’s Network of Howard County.

Email Heather Yeung

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