On today’s episode of The Atlanta Small Business Show, we get legal Advice and marketing tips from Atlanta based lawyer and author, Dayna Thomas. In this segment, Jim and Dayna discuss social media, protecting your ideas, trademarks, and business entity structure.
Jim Fitzpatrick: Hi, everyone, and welcome to another edition of The Atlanta Small Business Show on ASBN. I’m your host, Jim Fitzpatrick. We’re happy to have with us in the studio today a woman that can help you start, grow and succeed your business. Dayna Thomas is an attorney, business coach, marketing expert and author of the book Entrepreneur’s Guide to Building a Solid Foundation. Dayna, welcome to the show.
Dayna Thomas: Thank you so much for having me, Jim. I’m very happy to be here.
Jim Fitzpatrick: Great. I know now that after reading your book and taking a look at your materials online and such, you really do help a lot of small businesses in the areas of their legal needs and their marketing needs. It kind of flowed over it looks like. Let me just throw this at you and that is how has social media affected the way that people do business and how can entrepreneurs use social media effectively to grow their business?
Dayna Thomas: Absolutely. My background is marketing before I started in law school. At Georgia State, I’ve studied marketing, and so it is a big part of even being a lawyer or for any entrepreneurial venture. I have found that social media has been the key to my business but as well as for a lot of different other businesses. What it does is it levels the playing field for entrepreneurs or for solo,
Jim Fitzpatrick: Good point.
Dayna Thomas: … Entrepreneurs, for small businesses. Back then with business, you had to put a lot of marketing dollars into getting your product or your service in front of a lot of people.
Jim Fitzpatrick: Yeah, it’s true.
Dayna Thomas: But now that we have the internet, we don’t have to do any of that. It’s pretty much free. As long as you’re using social media the right way, you have a whole audience that’s right there at your fingertips and it gives you greater flexibility for people to get to know who you are.
Dayna Thomas: Something that entrepreneurs need to understand is, number one, be intentional. Every post that you have has to be for a reason. What do you want your followers to do because of this post? Sometimes it might just be to learn something. It might not be to go to a link to purchase a product or a service or it might be for them to get to know you a little bit more so that they trust you. Every post has to be intentional. It has to be consistent and you also have to remember do not just use social media to sell. What you need to do is to give, give, give, give, give and then sell. That’s pretty much how it works.
Jim Fitzpatrick: I would imagine that entrepreneurs for the most part just starting out think, “When you say give, give, give, oh, my gosh, I don’t have time to do all of this.” When in reality just about the time that they stop might have been the next day or the next week, it’s started clicking for them, correct?
Dayna Thomas: Yes. When you say you don’t have time to do this, that means you don’t have time to make money because these are the things that really matter. A lot of times for entrepreneurs, the product or service that you have people don’t know why they need it or they don’t know why it’s valuable.
Jim Fitzpatrick: Sure, good point.
Dayna Thomas: It’s your job to teach them and give them just enough free content for them to know that, hey, I really need this. Social media helps to do that.
Jim Fitzpatrick: Social media also allows an individual to become an expert in a specific field, right?
Dayna Thomas: Yes.
Jim Fitzpatrick: I mean, if they’re constantly pushing content out on the internet, then it helps them elevate their standing in this particular industry, right?
Dayna Thomas: Absolutely. Even if you have a blog and you use social media to promote your blog, the more you write, the more you’re learning for yourself, the more you’re doing research and the better expert you become.
Jim Fitzpatrick: Right. You mentioned earlier it levels the playing field so whether I’m a small business, a one man band working for my home with a website or there’s a corporation out there that has 15 employees, to the person shopping online, you’re the same.
Dayna Thomas: Yes, exactly.
Jim Fitzpatrick: You may both be able to offer that same product or service as long as you got a website and you’ve got all of the questions answered for the consumer, right?
Dayna Thomas: Which is great and also with the online business, you can reach more people. If you have a physical location, most times you can only reach people in your area. With the online business, you can reach not only within the United States, internationally so there’s so much opportunity to make more money.
Jim Fitzpatrick: Sure, sure. Let’s switch gears a little bit. Talk to us about people that come to you and say, “I’ve got an idea or I’ve got a brand that I want to launch.” How do they protect that brand or how do they protect that idea that they’re about to embark on?
Dayna Thomas: I get that a lot and I love talking about this because what people actually don’t know, you cannot actually protect your idea. An idea alone that’s in your head that you haven’t done anything with is not protectable by itself. In order to legally protect an idea, you have to actually have it manifest in some way. Ideas are along the lines of intellectual property.
Dayna Thomas: There’s three ways to protect your intellectual property. We have copyrights, trademarks and patents. Patents are for pretty much for inventions. In order to get a patent, you have to have some type of prototype, actual way to build or create whatever you are inventing. It needs to be manifested somehow.
Jim Fitzpatrick: I would imagine with a blueprint and what have you.
Dayna Thomas: Yes, exactly. Not just words but it has to be manifested in some way. For a copyright, a copyright protects your original works of authorship so we have songs, literature, videos, different things like that. If you are an author of a work, then you can protect it by copyright. But that also has to be in a tangible medium. If I sing a song to you, I can’t protect that. You have to actually write down the lyrics or record it in order to protect that.
Jim Fitzpatrick: Do somebody that’s got that have to get with a trademark attorney to make that happen? Because if they simply write it down, they’re still not protected, correct?
Dayna Thomas: I’m glad you mentioned that. You mentioned trademarks. A lot of people get trademark and copyright confused.
Jim Fitzpatrick: Right. Including me.
Dayna Thomas: But it’s a great opportunity to talk about it because trademarks protect your brand. Something that shows what the source of the product or the service is. In order to actually get a full trademark again with the tangibleness, you have to actually be selling that product or that service to consumers. Yes, when it comes to protecting your brands or your ideas or your inventions, it has to be manifested in some way to do that.
Jim Fitzpatrick: Then be registered with some sort of a …
Dayna Thomas: Yes.
Jim Fitzpatrick: Okay.
Dayna Thomas: In order to get a trademark that you can protect in the whole United States, you have to register your trademark federally.
Jim Fitzpatrick: What type of business entity structure do you recommend for entrepreneurs and startups?
Dayna Thomas: You know what? I normally recommend the LLC, limited liability company, and this is why. I know that a lot of startups are interested or entrepreneurs are interested in the corporation because it sounds big, it sounds fancy. But think about it practically. The LLC has just as many protections legally as a corporation does. But what the LLC does that’s different or has that’s different than a corporation, it has less corporate formalities. If you have a corporation, you need to have a board of directors. You need to have bylaws. You need to have meeting minutes. All these corporate things that new business really don’t have time to keep up with. If those things aren’t done properly, then that can affect your limited liability.
Dayna Thomas: With an LLC pretty much all you have to do is to make sure that you don’t commingle your funds for any business. You keep your funds separately then for your business funds and your personal funds. That’s number one. Number two, you make sure that all of your contracts are in the name of your LLC and, number three, you make sure that you do your annual registration. Once you do those, you’re pretty much set with your LLC and it gives you that same flexibility, your protection as the corporation. I definitely say LLC.
Dayna Thomas: I know sometimes, I want to mention this, we hear about sole proprietorship like that’s even an entity. It’s not a business entity. No business owner should operate at the sole proprietorship for any reason. It’s just as if you didn’t have a business at all.
Jim Fitzpatrick: Is that also the same as a DBA?
Dayna Thomas: Yes. Yup, yup. Pretty much. A DBA is just you might be registered with your state at a certain name but you want to be able to have contractor checks in a different name so that’s a DBA.
Jim Fitzpatrick: Okay. Got you. You tell people stay away from that because you’re going to be held liable personally if anything should happen with regard to that business.
Dayna Thomas: If anything happens, a sole proprietorship does nothing for you so you want to make sure that the liabilities for the business are separate from the liabilities of you personally. Also sometimes we hear about partnerships and so partnerships is the actual type of structure. But we don’t really want to do that because at least one partner has to be personally liable. Which partner is that going to be?
Jim Fitzpatrick: Right. Exactly.
Dayna Thomas: Exactly. We can stick with the LLCs.
Jim Fitzpatrick: You could spend a fortune in legal fees just determining that. What’s the biggest mistake that new businesses often make that’s easily avoidable?
Dayna Thomas: You know what? I would say not making sure that your brand name or your brand logo is available for use before you start using it. We started talking about trademarks. I normally recommend it for my client to get a trademark search done before you start investing in your brand. You want to make sure that that name or that logo isn’t being used by another company that sells product or a service that’s similar to yours,
Jim Fitzpatrick: Yeah, that’s a good point.
Dayna Thomas: … Because if you start using it, you start investing in it and then later on you get a cease and desist letter because someone else is using that same name or something too similar to it, then you have to rebrand. That cost a lot of money. Make sure you get that done.
Jim Fitzpatrick: For the people that are right now thinking about jumping into business and they just heard what you said about a trademark search, are we talking about $100,000? Are we talking about $1,000? What typically stuff like that around?
Dayna Thomas: Typically for the full trademark process, I would say it starts somewhere around about 800 to about 1,500 depending on who you’re working with or depending on what’s included in that package. Not all services provide the full package. They might just do the search. They might do the search with the trademark registration and there’s also something called Office actions that lawyers typically deal with as well. Just depending on what’s in the package, but after you do the search, then you can start using the name. But then you want to make sure you register it very soon after.
Jim Fitzpatrick: Sure. Sure. Dayna Thomas, I want to thank you so much for joining us on today’s show,
Dayna Thomas: Thank you.
Jim Fitzpatrick: … Because it’s been very, very informative. I know for the viewers that are watching as well and hopefully we can have you back on The Atlanta Small Business Show,
Dayna Thomas: I love that.
Jim Fitzpatrick: … On ASBN to talk more about these things that affect entrepreneurs and small business owners.
Dayna Thomas: For sure. I have so much to share and I’m so excited to do that.
Jim Fitzpatrick: Great. We’re going to get you back here then.
Dayna Thomas: Awesome. Thanks, Jim.
Jim Fitzpatrick: Thanks so much.