Business Doctor - Danvers Baillieu, founder of Bootlaw

Each week, a specialist in a business subject joins us in the studio for 5 live's On The Money to answer your business questions. Danvers Baillieu, founder of Bootlaw writes about the legal considerations to keep in mind when setting up your business.

Please note that the following is generic legal advice only - and should not be relied on for specific legal queries

Saving money on legal bills

When you're starting out in business, the last thing you need is to spend a fortune on legal fees. The good news is that if you're sensible, you can save money. First of all, it is important to dodge any unnecessary disputes. Litigation is expensive and messy but often avoidable.

Before leaving your old job, act sensibly and don't try to use your employer's equipment, intellectual property or confidential information (such as client lists) as this is a sure fire way to get sued even before your business has started.



Secondly, KEEP IT SIMPLE! By all means have the most complicated business model or technology on the planet but keep the legal structure simple. Ex-lawyers are often the worst offenders, ironically, as they want to do something "clever". It is rarely worth it and can add extra cost when cash is tight.

Thirdly, don't use solicitors - do it yourself or use some of the great free and low cost resources out there. There are some good law-related websites which are free to use, and others where standard documents (such as employment agreements) can be downloaded cheaply. As an entrepreneur, you'll have to learn lots of new and exciting skills - learn to read a legal document.

And if you do need to use a solicitor, pick one you can get on with on a personal level as well and try to get to know him or her. We like to understand our clients and what makes them tick and like all professionals we are more likely to go the extra mile as well as prioritise the work of those clients who are friendly and polite.

Raising money for a business

On the radio last week, one listener asked for advice on raising money to take over his employer's business, as the employer is retiring and is planning to shut it down. The listener had the added handicap of having some County Court Judgments (CCJs) against his name.

There are a couple of options. First, he could ask friends and family for a loan or see if they might take a stake in the business, but also ask the retiring boss if he would invest in his team to carry on the business. This could work for both parties - the boss doesn't have to shut down the business but can keep an income from it, and he would have an investor who will give you useful advice and support.

There might be small business grants available. I have one very successful client, who runs Kashflow, and he started out with a grant from the Prince's Business Trust.

Protecting the Intellectual Property in a Business

Another listener asked about protecting the "intellectual copyright" in the unique training business he is about to launch in Australia. A quick lesson on legal terminology - "intellectual property" is the catch all phrase which includes copyright, design rights, trademarks, patents and know-how.

Copyright protection is automatic when you create words, sounds or pictures and it is not necessary to register it in the UK or Australia. The concern is probably a bit misplaced in this case, because a training business is about the marketing and delivery of the training and not simply the contents. It is always a mistake to assume that everyone will want to compete with you if you have a brilliant business idea - because you are probably the only person who (a) thinks it is brilliant and (b) has the time, energy and so on to make it happen.

Once you've proven it is brilliant, the copycats will emerge, but by then, with any luck, you'll have established yourself and have the so-called "first mover advantage".

On The Money goes out on 5 live between 8 and 9pm every Sunday night