Leslie Wm. Adams & Associates

Houston, Texas Business Law Blog

Should you patent your trade secrets?

If you own a small business here in Houston that is product-based, you more than likely have some intellectual property you want to protect. Perhaps you didn't even realize that, up to this point, you have relied on trade secret law for protection, but now you wonder whether it would benefit your business to apply for one or more patents.

Making this decision depends on several factors, so you need as much information as possible to give you the confidence that you made the right choice.

Money sources for startups

One of the several financing options Texas residents may use to establish their startup is their savings. Using their own money means that they will not have to hand over any equity in their business or have to accumulate debt. It can also be a good source of motivation, as they may take more effort to avoid unnecessary risks and to plan carefully than they would if they were using someone else's money.

For people who do not have any savings set aside, they may try to see if they can raise cash for their business. This can entail selling off high-value assets, such as a secondary vehicle. They can also opt to wait to begin their startup until after they have built up sufficient savings.

Key lessons to understand about working in real estate

An individual can often be successful in the commercial real estate sector by working hard and knowing the right people. Ideally, those who are looking to buy, develop or invest in Texas properties will do so with a team around them. Team members can help with marketing, brokering deals or doing research into specific properties or entire markets. To be successful in real estate, it is important to learn from the losses that a person will incur along the way.

There can be times when a buyer decides not to move forward with a deal at the last second. This can result in individuals receiving nothing in the way of financial compensation for their time. However, it is important to be driven and to work diligently to grow a client base. In many cases, a successful year will mean closing on a handful of successful deals. The rest of the year will be spent learning about the industry or developing relationships.

How to value commercial properties

Many real estate investors in Texas are interested in getting into the commercial market. Commercial real estate across the country is estimated to be worth $10 trillion, and the value of these properties has continued to increase on a regular basis. There are several ways that people can get involved in the market, from purchasing property for their own businesses, becoming landlords or buying into a trust or other investment vehicle. For any project, however, one of the most important steps is establishing a correct valuation for a property.

This information can be critical in determining whether a particular piece of commercial real estate is a good investment as well as setting the purchase or sale price. There are several different approaches that people can take to establish value. Under a cost approach, investors can estimate the amount of money it would cost to build the property today, including the cost of land, labor and materials. This is particularly relevant for unique or otherwise unusual property. Income capitalization is another approach that can be particularly important for investors because it is based on determining how much money an investor could reap from a specific property. This is generally based on similar properties nearby as well as overhead costs.

Actions to take before opening a business

Opening a business in Texas can be a very exciting opportunity for entrepreneurs. However, there are many steps to take before making this kind of major investment. The preparation taken before a business opens can make a big difference in the short- and long-term success of the company. The first step is to create a solid business plan. A plan should describe what a business does and how it's different from the competition. It should also describe the market, structure and financial projections.

The next step is to register the company with the applicable regulators. There are several different ways to do this, including registering as a sole proprietorship or establishing a limited liability corporation. If the company plans on having employees, it will need an Employer Identification Number (EIN) from the Internal Revenue Service. That will enable the business to pay the taxes it owes to both the state and federal government.

Title insurance and the commercial real estate transaction

After spending a substantial amount of your time finding the right piece of Texas commercial property, you want the transaction to go smoothly and well. The last thing you want is to discover some potentially costly issue at some point in the future.

For you, this may mean making sure the property is properly zoned, and that your financing comes through without a hitch. While these issues are critically important, you also need to consider that the deed to your new property may not be enough to ensure you actually own the property.

Considerations for startups pursuing venture capital

When Texas entrepreneurs launch a new business, they may be drawn in by the thought of gaining significant investments through venture capital. Angel investors and venture capitalists can be particularly important for people looking to launch innovative businesses and grow them widely. Some of the largest tech companies to emerge in past decades have been supported by venture capital, and those looking to follow along the same path may want to imitate that model. Still, it is important to consider whether a particular venture capital investor is a good fit for a particular startup in order to help ensure a successful future.

Experts advise that founders should work to understand the motivations driving a venture capitalist to invest in their companies. A large number of supported projects fail to come to fruition, and a 40 to 50% failure rate is common. Venture capital firms make their money on the percentage of successful investments, where they will multiply their invested funds many times over. Therefore, this kind of investment is a better fit for founders who want to see their companies grow rapidly, rather than those who want to remain smaller.

Should your business have a backup plan?

When you decide to start a business, there are often many concerns about how you will make ends meet, when success will come and what the process will entail. Meanwhile, well-intentioned people around you will likely offer up their versions of sage advice, though typically based more in fear than experience.

Starting a business involves risk, no matter how great the concept. And although you probably hate to consider the necessity of a safety net, you might be more concerned about which one (or ones) would be good to put in place. Although you don’t intend for your new endeavor to fail, some safety nets might be appropriate ways of minimizing your risk while you establish your business.

The tech hub and business startups

Recently, there has been significant approval of business loans in Texas and across the U.S. This is probably due to a booming economy and consumer confidence.

Yet according to a recent Xconomy article, not much has come of efforts to begin a tech hub in the city of Houston. There is a perception that talent may be lacking. However, it does seem possible to overcome the challenges of locating talent by working with the right resources.

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Leslie Wm. Adams & Associates 3700 Buffalo Speedway, Suite 420, Houston, TX 77098 Phone: 713-364-0564 Fax: 713-728-6366 Houston Law Office Map

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