What I do, as you probably know, maybe if I can give you a little background. What I do is I talk to people about their businesses and I come from basically a background that’s pretty diverse. I started out as a chemistry major in college. Then I switched over to drama, which was really a big leap for me. Then I went into the English major business for awhile. I studied English literature. I actually did graduate work in English literature. That got me over to Germany where I taught American literature at a German university.
I ultimately wanted to stay in Europe because it’s fun when you’re 23 and you’re a single male and know the language and the folks. You just want to stay. So I did. I got a job at the Army and Air Force Exchange Service and I started managing retail outlets. Started out in a store that was about the size of a 7 Eleven and when I left Germany I was managing a store that sold more electronics then any other store in Europe. We actually accounted for ten percent of the profit of the entire European Theater.
I was also troubleshooting because I troubleshot operations for the director because while I was managing these stores they had this great program where they would actually pay you to get a Masters degree in Business. I said, “I’m in. They’re paying, I’m playing.” I went to, basically, the European version of Boston University and got a Masters degree in Business. As soon as I got a Masters degree in Business they transferred me from Europe to Dallas. I went around and basically taught and troubleshot operations in the United States for a year before I went to law school.
I Went to the University of Texas School of Law in Austin. That was really a lot of fun, I got to tell you. After law school I came out here to California and I had the extreme honor of being mentored by a guy who is now 85 and plays golf. He walks the course everyday. An amazing man. His mentor was the managing partner of Graham and James in San Francisco at the turn of the century. I’m talking about 1900. This is the provenance of the folks that I had mentoring me. I was really honored to be able to work with him. He’s still a good friend today. We still talk.
What I bring to the party is basically a lot of business experience. A lot of legal experience. I’ll give you an example. Got a phone call yesterday. Some guy said, “I’m buying this yacht.” I said, “Oh, yeah?” He said, “I need to know whether I should just buy the shares of the LLC or I should buy the asset itself.” I said, “Well, where is the LLC located?” He said, “Oregon.” I said, “Well, where’s the yacht located?” He goes,”California.” I said, “You need to buy the boat. Do not buy those shares under any circumstances.” He goes, “Why not?” He said that was the easiest way to do the transaction.
I said, “Anybody who shows up and tells you they have a major asset in an out of state LLC or corporation has been dodging taxes in the state of California for some time.” I said, “When was the boat put in the LLC?” He said, “Oh, 2006.” I said, “You might be looking at as much as $100,000 in taxes, penalties, interest, dealer prep and other options.” He goes, “Why didn’t they tell me this?” I said, “The yacht brokers? The yacht brokers. They’re extremely reputable people. They have all kinds of incentive to tell you this because they don’t want to sell you any boats?” Basically the question is, “How do you get this type of experience?” This is what I do everyday. I see this stuff and when I talk to people about what they’re businesses are about, this is what I see. I see a lot of stuff that they might not see.
Let me tell you something about contracts. How many people love contracts? Those long contracts with all kinds of language? Let me tell you something. When I was in college I took a business law class where they talk about contracts. I just about, I just couldn’t get it. I said, “Forget it. This is stupid.” Then I actually hated my contracts class when I was in law school. This is what I’d do everyday. Here’s what I’ve learned. You do not learn how to work with contracts just intellectually. You have to work with them practically everyday. I’ve learned more from people who’ve been in business for 50 years, who aren’t lawyers really but they know a lot about contracts because they’ve been dealing with them all of their lives. Those people actually know how they work. They actually have a sort of visceral understanding of what the language is about. Somebody who just came out of law school may be very intellectually smart but really doesn’t understand how they work.
What I have had the benefit of, because I really hated contracts when I first started, is that years of experience working with contracts. I can tell you right now every time somebody comes and starts talking to me about a contract that’s either been foisted on them or they entered into or they want to enter into with somebody else, you can usually tell right away whether or not they’ve had any actual practical experience with contracts. This is the sad truth. Most of the people who deal with contracts have no real experience with how they work. They usually are experiencing the consequences of a contract which are somebody suing them, or they’re trying to get paid and they can’t figure out how to get paid.
What I do when I lure you into my lair to talk about your business is that’s what I’m really going to talk to you about is how we can put these mechanical little components in place. So that you can do more successful things with your business through contracts and other things rather than sitting there going, “I can’t believe I got that in the mail.” Because when you say, “I can’t believe I got that in the mail.” that means you’re thinking about that stuff instead of your business. That means you’re not making money from your business. It means you’re basically bogging down your business with all of this crap. You don’t want to bog it down with crap. You want to make money. You want to make more money.
What we do is put things in place so that essentially you can focus on your business and not have to deal with these things. In the process, this is the cool part, you will learn through experience how contracts work better. How contracts can work for you instead of you working for them. That’s pretty much all I’ve got to tell you today. Got any questions, any thoughts? Tom.
Business Growth Innovators Member: If you’re in a contract and they breach the contract, let’s say you sue and win. When they file bankruptcy. Is there any recourse for any of that?
Speaker: Usually no. Unless they’ve committed fraud. If they’ve obtained your money by fraudulent means then you can pursue them past bankruptcy. I actually have a huge judgment against some people who did that. They breached the contract and they committed fraud and we ended up basically having that debt, not be discharged in the bankruptcy. That’s the equivalent of having a huge A stamped on you for “A hole”.
Mark D. Holmes: You could do the same thing I did last year, work on a retainer thing or just replacing that?
Business Growth Innovators Member: I don’t do retainers. I don’t like that. I never did like that. I can’t understand why somebody would have to send you money every month just for you to continue breathing and pick up the phone. Most of the time I pick up the phone and talk to people for free and if they need something done then we ascertain that they need it done and then I charge them a flat fee for it because I don’t see why I should gouge you with something that I see as a routine thing. Sort of like, if you’re getting your oil changed, why do you need to pay $5000 to have your oil changed? That’s the way I look at it.
Most people don’t understand that that’s what’s happening but it’s really quite a routine thing. We’re just setting you up right. Yes, sir. Oh, okay, you didn’t have a question. Thank you.
A lot of questions I get and it’s good that Eric raised his hand. A lot of questions I get are interpretations of insurance policies, whether or not there’s coverage. Most people don’t realize, and Eric knows this probably better than anybody, they don’t have any idea what’s covered or not because they never read their insurance policies. At the very least when you get your free advice with me, I’ll give you the rudimentary basics of how to interpret an insurance policy. Usually when people walk out, they’re a lot wiser, so when they got talk to Eric about what kind of insurance they want they end up asking better questions and getting better answers. Anything else I can talk to you about before I sit down? Thank you. You’ve been lovely this morning.
The Law Offices of Mark D. Holmes, APC specialize in the following areas of business law:
- Business Litigation
- Contract Law
- Corporate Law
- Real Estate Law
- Commercial and Maritime Law
- Business Transactions: contracts, buy-sell agreements, asset sales, incorporations, LLCs, employee handbooks
I offer free consultations; communicate often and in detail; accessible by email and cell phone; twenty years experience in business transactions and litigation; and I have actual business experience!