Mark: We talked to Scott Reib, America’s legal coach of Re Block. There are many challenges that can pop up suddenly on a remodeler frivolous lawsuits, Jekyll and Hyde customers, predatory creditors, you name it.

Mark: It is imperative to build your business on a foundation that can weather the storm so that, as Scott puts it, it doesn’t shatter. And we’ll hear about his process of shatter proofing your remodeling business in just a minute.

Victoria: Hi, I’m Victoria Downing and welcome to PowerTips Unscripted, where we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. And here’s my co-host, Mark Harari.

Mark: Hey there. How are you?

Victoria: Hungry? How about yourself?

Mark: I’m good. I’m. I’m seeing you across the the inner tubes of the internet.

Victoria: Yes. Your quarantine, your quarantining.

Mark: Me. So I’m alone in the studio all to myself. It’s surprisingly quiet today.

Victoria: Without me banging things around, kicking the table, making all sorts of noise. And then you have to edit out how that works.

Mark: Fantastic.

Victoria: Yeah. So we got a great topic today. You know, I think the small business owners don’t pay enough attention to this particular topic. What do you think, Mark?

Mark: I think you’re 100% right. Nobody wants to think about that stuff, because some people think if you think about it or talk about it, it’ll happen. Yeah. You know, so.

Victoria: Talk about legal issues and ways to protect your company and that sort of thing. And I don’t know, just like like, you know, I don’t even know like what kind of lawyer to get for what kind of problems. Or if you need five different lawyers for five different kinds of problems and all that stuff. Yeah. It’s just interesting today to talk to Scott.

Mark: Absolutely. I’m excited.

Victoria: So shall we kick it off?

Mark: Kick away.

Victoria: All right. Scott Reib, is he, known as America’s legal coach? He travels around the country teaching business owners how to shatterproof their businesses. He’s also the official lawyer for the Zig Ziglar organization. And a trainer as well. Is based out of Denton, Texas. So he’s coming to us from another time zone. So, Scott, welcome aboard.

Scott: Thanks, Victoria Martin, for having me.

Victoria: Hey, would you bet it sounds really interesting? So how did you become known as America’s legal coach?

Scott: I’m not real sure how that happened. Sometime in the last five years, as I’ve been in front of different business groups. I just kind of that kind of glommed on to me. I take a different approach to legal than, most of the lawyers I know and the I don’t just we don’t just do the legal work for our clients, but we try to give them an, an educated approach to it so that they can make better decisions even when I’m not around.

Scott: And ask me better question and my team better questions, the more the more educated they are on the on the law and how it affects their businesses. The smarter they can, they can be and the smarter questions they ask.

Victoria: So what’s the difference? Excuse me. What’s the difference between a legal coach and a lawyer?

Scott: You know, a lawyer? Just kind of. Well, here’s the document. It’s done. Sign it or I’ve reviewed it. It’s fine. Sign it. We’ll walk them through. What are the problems with the document? Help them try to figure out which things they can live with, which they can’t. Why, you know, explain why it’s that way so that they can try to learn so that when they see, they can see those things in the field.

Scott: I feel like, you know, like in the remodeling business that they can go, oh, that’s that’s something I should be aware of as a problem. What will Robinson call Scott and the team? And then they could and then we can take care of it if they don’t get smarter. They don’t know when to call the lawyer. They don’t know, like you said, which lawyer to call?

Scott: And so we usually try to take a coaching approach to it, not talk down to them, but walk them through why this is important. And, and why they should care.

Victoria: Now, you work with small business owners from across the country, right?

Scott: Correct.

Victoria: So what are some of the most common problems that you see occurring?

Scott: You know, and it’s, we work we work with them across the country, and we work on what I call kind of the. It’s the easy stuff. It’s not the real complicated things that go to being wrong. And you mentioned the shadow proofing process a couple of times, and it kind of starts with one of the strategies is you have to have the right foundation.

Scott: This is a problem that a lot of small business owners have in a really a lot of remodelers have is that they’ve got a pickup truck, and maybe a name, and they are in business, and they didn’t take the steps of forming a limited liability company or a corporation to give them separation from their personal lives. And without doing that stuff, they’ve left everything that they build.

Scott: It’s no pun intended. Everything that they have, exposed to potential lawsuits. And with 20 million plus lawsuits being filed in the US every year, there’s a lot of exposure that they’re just not aware of. And so by taking that one simple step of creating an LLC and doing it right, then they can make sure that the profits they take home from their business.

Scott: That’s the goal. They can then reinvest in other types of assets and keep those assets in them not be at risk if there’s a liability. It didn’t work.

Victoria: Okay. So that’s one good one. Now, I was talking to somebody the other day, and he was telling me that one of the things that, he loves to watch are the courtroom shows. And he’s like, yeah I watch him all the time. He’s sort of addicted to them. So they would say I love to watch them.

Victoria: The biggest thing is not getting things in writing. You know, assuming that you are understanding what is intended by the words that is verbally spoken. Do you see that as an issue regularly?

Scott: Huge issue. And that’s strategy number three at the shelter for your business is to document everything, which starts with document your your corporate keep your corporate formalities. So you want to have an operating agreement for your LLC. You want to keep annual minutes for the things that you’re doing in your LLC and then you want. Then it goes into you want to keep copies of quotes, estimates, that you’re doing in your business.

Scott: Want this to be in writing? Don’t go around just giving verbal quotes. You want them in writing. And then when you go to next step and you’re going to take the job, then you want to actually have a contract that both parties are signing. That is clear and unambiguous as to the amount of money, when it’s going to start, when it should finish.

Scott: What are the what’s the scope of work? What happens if there’s a problem on the project? How do we execute this project? You’d have all those things in that agreement. It doesn’t have to be super complicated, but it needs to be clear so that you can have, and have a way to go back and look at this document.

Scott: I’d like to say written agreements. Keep honest people. Honest. Most people are honest. They misremember. And if you don’t have a written agreement to go back and and remind each other of what we agreed to, then you’re left calling someone a liar. In my experience, that never goes like that.

Victoria: Did not I know how I would react if somebody’s a liar, it wouldn’t be pretty, right?

Scott: So you get the writing in place, and then it’s very simple to go. Let’s just look at it together. It it says what it says. And then you can then you have to deal with that situation.

Victoria: So okay, so I’m sort of forcing you to jump around in your process a little bit. The problem at about step one, right. The doctor beginning your self and incorporated in some form or fashion, we talked about documenting other. What are some of the other steps that go into shatter proofing your business?

Scott: Yeah, a really important step is that I, you an entrepreneur, a business owner, needs to set up what I would call a kind of a key, a key board of advisors and that board needs to consist of, a CPA. I know to one of your episode today, actually, I saw, on your website which talks about, making sure lists and good bookkeeping principles in place so that people don’t take your money.

Scott: We need to. So you need to have a CPA or a really good account that can help you set up cash flow processes in Chart of Accounts in QuickBooks or Xero, whatever software you use to make sure that you have a clear pathway to for your taxes. That can help you save money on taxes. Everyone wants to pay the amount that’s owed, but you want to pay as little as possible, so you want to have someone that will be proactive with you and talk about strategies and help you make sure that you’re set up the right way.

Scott: So they can do that, they can help you, get ready to go get a bank loan if you needed a line of credit, they can do all those things. So a good CPA is so important to have on that team of advisors. The next person you want to have is an insurance broker. I like independent people because they can give you quotes from lots of different companies.

Scott: It doesn’t mean you couldn’t use someone from that’s with one brand. But you want someone that cares about you. This is all about relationship that will come to you and interview you and ask you what you do and understand what you do, and then say, here’s the list of all the types of coverage that I recommend that you have, and then help you figure out which ones, and prioritize it because you can’t afford it all, you know, your new business person.

Scott: So you have to prioritize and take what you can. And then it should be coming back to you on a regular basis, making sure this list is still accurate and helping you take down more of those insurance policies so that you have the right coverage in place to protect your business, and again, so that nothing ever comes home, comes home to roost.

Scott: So that insurance person is a key person on that team. The next one is the banker. Everyone has a bank, right? There’s one on every corner. You don’t have a bank. You need a banker. You need someone that will give you their cell phone that has your cell phone number, and that you can text them and say, hey, I need to write a check this afternoon and I’m not gonna have to deposit there till tomorrow.

Scott: And if I do that, I get this big job. If I can’t do that, I don’t. And you need a banker to go get. That’s okay. I know your history, I know you. That’ll be fine. I’ll cover the check and we’ll see you in the morning with the deposit.

Victoria: So how is that? A that’s a common thing. I mean, I’ve not heard of too much of that having to happen.

Scott: It happens a lot. It happens a lot with start with smaller businesses for sure. And having those kind of relationships can be really important. And so. And you can find them in bigger banks, you just have to work at it. And it’s you can’t do this over the phone. You have to do it. You have to show up with with donuts and coffee every once in a while and make friends.

Scott: And those people, when they, if they know you like to do and trust you, will help you in business, they will. You’ll go fight for you in the loan committee. If you’re trying to do something project, they will help you, help you get a line of credit so that you can take advantage, of opportunities. But if you don’t have a relationship, it just doesn’t, doesn’t work as a part of me and you’re then you’re just a it’s just a transaction.

Scott: You don’t ever want to be a transaction. You want to be a relationship. The next person that you want on your team is a business coach. You need someone to to give you a map. When I eight years ago, when I created our access plan, I did not know how to do it. I had a vision of I needed someone to help me get from A to Z.

Scott: And so after interviewing a few coaches, I found one that had a map that was excited about my vision, and they’ve walked me through that. They hold me accountable. And now I’m always, I always have someone that’s coaching me to hold me accountable to action steps to make sure that I’m moving forward. I think that’s a key person to have on that board of advisors.

Scott: And last but not least, you need to have a relationship with a business lawyer, someone that can tell you when you need to go get a specialist. You mentioned earlier on the show that maybe you need more than one lawyer. You don’t know which one to go get with them and help you make that decision. Let them find it and quarterback that situation for you.

Scott: You need one touch point that knows your business inside and out, knows you personally, and can help guide your business. If you have that team of advisors in place, go so you goes a long way because most of us, are small business owners. You’re kind of on an island, and you just you feel really alone, especially in today’s world where, you know, you said your quarantine and quarantine, I mean, isolated, having those people that you can get on the phone, and talk to about a problem, get them all together, if possible, to talk about a problem or that are working on problems for you while you’re doing other things is just

Scott: priceless.

Mark: It’s just a quick question. If I could just go back to the to the banker, what’s what’s the title of what’s the title of that position I’m looking for? I’m not going up to the teller and making friends with the teller. So what’s the title in the bank that I want to make friends?

Scott: Well, it’s going to be your. It’s going to be your account or your account officer.

Mark: Okay.

Scott: So when you start your account, generally they assign it to a bank officer. And so that’s the person. Got it. It wouldn’t hurt to go up, up a level if you could go meet with maybe meet the vice president of the branch. That’d be good. If you can get to the president, that’d be great. But with someone that’s a little bit higher up in there, that is that you can build a relationship with.

Scott: But a lot of times it’s just your account, officer. Okay? And then as your business grows, their career grows, and that’s that can be a lifetime relationship because you may follow them from bank to bank, because it really the relationship matters more than where you’re keeping the money. And so if you give someone good just. All right.

Victoria: So good let’s go back to the lawyer. So if you are a company owner and you’ve never had a lawyer before and you want that one touch point, what if a lawyer do you look for. Do you have to have a team? Could it be, independent? You know, one, one person office would just be looking for.

Scott: Yeah, it can be a very small law firm. I have a small law firm. We try to keep our footprint small on purpose. The main thing is you want someone that is understanding small business and is interested in it. A lot of efficient gets a bigger firms. They’re really they don’t really understand. Well, a lot of us really do it in more, especially if you’re an online business.

Scott: Then you understand remodeling type things. And they work with a lot of them. But you, they they don’t they’re going to be more interested in the transactions than the relationship. So you’re looking for someone that has time, that can sit down with you and meet with you right now. That can be zoom. That’s fine. And it’s asking you a lot of questions about your business.

Scott: So you want to sit down with them and let them interview you and get lots of information about what you do is they’re not trying to understand you. That’s probably not the right person. And then you want to really interview them and you want to know, you know, what their kind of what what’s their vision for their law firm.

Scott: Do they have a mission statement? Do they have core values? Are they going to business conferences or are they just going to video conferences? You know what what books are they reading? You know, they’re reading books like you’re reading. Are they trying to, you know, are they trying to, look at their law firm as a business as they see their law firm as different in other businesses?

Scott: I don’t think they’re be super helpful. You need someone that understands that they’re just like you. They just happened to be on the law school. And they’re going to business. You’re going into business. And but that experience, those experiences can help you. And then again, then at the end, it comes down to really do you like them?

Scott: If you’re sitting across the table or screen from them and you, it’s engaging and you feel like they care and you think that this is someone I could hang out with. That’s that’s probably good because you need to call them. You need to spend time with them. The more you do that, the more they can help you.

Scott: If you don’t like them, you won’t. You won’t reach out. So make sure it’s someone that gives you the warm fuzzies and the you think that person would will try to protect me.

Victoria: That I could get together, have a few laughs.

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Victoria: Okay, so you’ve talked about a number of steps and shatterproof single ones. Then what else?

Scott: Yeah, the next one is that you want to make sure and protect your intellectual property. You’ve got a lot to do on the property, behind you. And then you’ve got it for you. For your for those two brands. You need to make sure that you’re trademarking your brand. And the way you do that is you you register with United States Patent Trademark Office.

Scott: If they won’t give you a trademark, and then your brand doesn’t have the value that you think it does, you need to figure out why they didn’t give it to you. And if it’s if someone else is using that brand, then you’ve got to rebrand. That’s called infringement. And we’ve had a lot of opportunities with that over the years where we think we have this novel brand name and we don’t really it’s someone else’s brand, and if you go too far, they can sue you for infringement and it will cost a lot of money, or you’ll have to rebrand your business, and that will cost you a lot of time, money, and possible lost customers

Scott: because they won’t know where to go because you’ve had to rebrand. And that’s one big issue. And then in today’s world where we’re podcasting, we’re doing YouTube channels, we’re doing blogs, all of that stuff that you create or online courses. Those are all it’s all intellectual property. If you don’t protect it correctly with copyright registration, then someone can take it and sell it as their own.

Scott: And it’s very tough for you to recover from that. If you’ve rented it, then you can you can get a cease and desist letter up. You can then sue them in federal court and not only stop them from using your material, but you can also recoup your attorney’s fees and you can reclaim the lost profits of the for the money they’ve made.

Scott: It’s a really good tool, but if you don’t protect your natural property, you can’t do that. The next part of it would be that you want to make sure that if you have confidential information that you’re protecting, that that could be your customer list. It could be your trade secret suit. You know, if you’re building your or business, right, you’re creating systems and thinking ways of operating your business that are different than other businesses.

Scott: Well, those need to be those are confidential and proprietary and they need to be protected. So you need to have employment agreements, which takes us back to documenting everything so that they are signing, non-compete or signing. If your state lets you they’re signing non solicitation clauses, non-disclosure confidentiality. So they can’t take your stuff and compete against you unfairly.

Scott: You shouldn’t care. Someone leave your business and goes and starts another business. Because they, they have the the dream of having their own business as long as they don’t compete unfairly.

Mark: Scott, one of.

Scott: The things, don’t document them properly. Then they can do. They will, they can and they will go do that. And so you have to have the documentation which they understand. They can’t take your customer list and just go call them and start their own business.

Mark: Scott, one of the things that, I know some remodelers and some of our members faces where they with regard to the intellectual property, will they’ll do, the design work and then a, client will take the design and get somebody else to build it cheaper. So do you have any input on that and protecting that?

Scott: Yeah. They should really that’s that’s copyrightable. It would cost them about 25 bucks, probably to protect it.

Mark: So they do the design and they actually get the design itself copyrighted. You’ve got it.

Victoria: That’s interesting.

Mark: What if what if it’s a I mean, but doesn’t that make it. Is the design copyrightable to an address because they might reuse the same almost very similar type of a layout. They would still copyright each and into it. Each one.

Scott: If there’s a if there’s any change to it, it’s a new it’s a new work okay. And so they could copyright it. They’re the creator. They can copyright it. And then they can give you a limited license to use it. And so that they need to have clear documentation when they’re giving that to someone else, how that how they can use it.

Scott: They can, you know, they can’t if they have clear limitations on their they’ll have less people doing that too.

Mark: So if, if the, if the home owner said, you know what, I love your design. I just don’t want to work with you. I’m going to get somebody else to build it. Then the builder now has the right to say, well, then they can license it from me.

Scott: Correct. And then they should come back to him then and license it, or the, the homeowner could buy that, could just buy a different package that gives them the ability to do that. But then they’ve been fairly compensated. So you just it’s just all about setting up that agreement properly. So there’s what a base fee if you just, you know, for me to design this and then you can’t do anything with it.

Scott: And then there’s another fee if you want to, for me to move forward with it. Or if you want someone else to. And this is the good, better, best type of proposition. And that’s how I if I was listening, that’s how I’d put that together to sell it. Cool. It would give them to give them new revenue opportunities and protect them from people still on the run.

Victoria: So this has been pretty interesting. So are those the main steps in shatter proofing?

Scott: Yeah. And the next one is got used to other people’s intellectual property, which is another huge problem where everyone’s creating their own, websites. They’re doing marketing funnels, and they’re grabbing images off of wherever they can find them. And they’re not buying the images. They’re not being the rights to use them, and they’re infringing on a lot of people’s, copyrights.

Scott: Just all the time. And every year we’ll get a half dozen letters in where they’ve received the demand letter that you’ve used by image, that I created without paying me. And we demand that you pay us, you know, 5000, $10,000. And there’s no difference to that stuff. You just got to negotiated it out. Because if you if you didn’t have a license to use it, then you’re in trouble.

Scott: And sometimes it’s the webmasters that are doing it. They’re not being careful about the images they’re using, and you’re responsible for whatever’s on your side.

Victoria: So it’s mainly carelessness thing, do you think, versus, you know, doing a purpose?

Scott: Oh, I think so. It’s on purpose, but I don’t think I, I think they just don’t understand the ramifications for it. Okay? They don’t understand how serious it is. It’s because especially if you’re not a if you’re not creative, you don’t understand the value of that creation. And so it’s like it’s just a picture of what’s the big deal.

Scott: There’s thousands and thousands of them. But to the person who took it, it’s a big deal. And so you just that’s once people understand that that’s theft, then they care more and they’ll be more careful. And if you show them places, they can go to get them inexpensively or where they can use them for free, then it gives them the tools they need to make to make that easier, to steal the trouble.

Victoria: So if you were the small business owner, you’re hiring a marketing firm or you’re hiring, so you’re actually doing it. Is there something that you could say to that firm, say, I’m you are liable if you choose to use something that’s not legal. I’m not.

Scott: Well, what you would do is put an indemnification clause in the contract that says if they do that, they have to defend you, and pay any damages that doesn’t get you of being sued for it. The next thing that you would do is that you would require that they produce, licenses for any images that they use, or you provide the images, so that you can then you can really make sure that they don’t do that.

Scott: Okay. Reputable companies will take care of all that for you. It’s just that, you know, signing for doing websites now. Yeah. And so it’s very cost competitive. And so it’s a race to the bottom. And if you if you’re at the bottom, you need to really be aware that they could be putting you in danger.

Victoria: Okay.

Mark: Scott. It’s it’s that time of the show where we go into the lightning round. Are you ready for the lightning round?

Scott: Let’s do it.

Scott: And now here’s the remodelers advantage. Lightning round. It’s a dry.

Mark: What’s your favorite business book and why? You know.

Scott: It’s Michael Gerber’s, in a few visited, because that’s what set me on my journey to create a business, not just a law firm. And to to build something that would give small business owners access to legal, information services in an affordable.

Mark: If you weren’t America’s legal coach, what do you think you’d be doing?

Scott: I would be on a horse in Montana.

Mark: And what do you not very good at?

Scott: Details are problematic for me. Which is hard when you’re a lawyer. Yeah. I can I can really work hard at it and do better. But I need a team around me to make sure that everything is done perfectly. I’m more of a big picture strategy. Kind of.

Mark: Guy. Your room, your desk or your car? Which would you clean first?

Scott: My car.

Mark: What’s the weirdest thing you’ve ever eaten?

Scott: And I ate some forest in Iceland.

Mark: Wow. When channel surfing. Name a movie you’ll stop and watch every time.

Scott: A gladiator dies.

Victoria: Sorry, Scott, this has been awesome. That was fun. This has been awesome. Really some good information for our people now, I appreciate it, but before I let you go, you share your five words of wisdom with our listening audience and tell us why they resonate with you.

Scott: Choices have consequences. Choose wisely. Those are words that I’ve said over and over for the last 22 years. To my voice as to voice, and for them to understand that everything they do is going to affect, have a consequence on their future. So every time you choose, choose wisely, because there will be a consequence, sometimes good, sometimes bad.

Scott: And you can’t have regrets. But just know that when you’re making those choices, you don’t want to, not you want to take them seriously. Because when you choose, it has a lasting effect, not just on your life, but others too.

Victoria: Right? It’s also very, very profound. I like it. Thank you so much. I very much appreciate you being here and sharing your knowledge. And from America’s legal coach, we did. You have fun. Goodbye. So thank you so much.

Scott: You’re welcome. Thanks, Victoria. Thanks, Mark.

Mark: Thanks, Scott.

Victoria: Yep. Very interesting, wasn’t it?

Mark: It was pretty cool. You know, it’s funny because you just don’t know. I mean, just saying stuff out loud gets a lawyer to come up with things you never would have thought of.

Victoria: Yeah. You know, it makes me think it’s time for me to probably look for another lawyer. Because I’ve been working with someone that I’ve really never met. And, you know, transactional basis. I love the concept of form and more of a relationship. You know, the concept that they’re the, the sort of linchpin of your legal needs, even though they may not be the specialist in intellectual property or in some of the other things that he mentioned.

Victoria: The fact that they know when they’re they will be able to refer those people and understand what it is you’re looking for is pretty important, too.

Mark: Yeah. It’s like having a general practitioner. Right. As far as a, like a doctor.

Victoria: Yeah. Exactly. Right.

Mark: And so I think you are confused by my statement there. You just kind of looked past me like, what are you talking about?

Victoria: The general practitioner type. Yeah.

Mark: Yeah, I get it. Okay. Yeah. Hey. And maybe it’s because you’re all the way over there. Wherever you are, and I’m not looking at you. In your case.

Victoria: Remodelers advantage world.

Mark: Yeah. You sound so echoey.

Victoria: Next week.

Mark: Yeah. Maybe we’ll say. Well, we want to thank Scott Reed for taking the time to share his legal expertise with us. And of course, we want to thank you for listening week in and week out. I am Mark Harari.

Victoria: And I’m Victoria Downing. Thank you for being here. See you next week.