Crafting Success: The Importance of a Rock-Solid Business Plan and Navigating Legalities with Matthew Fornaro.

What if the key to your startup’s success lies in a rock-solid business plan? Join us as we unpack this vital question with Matthew Fornaro, a seasoned business law attorney from South Florida. Matthew shares his journey from navigating the corridors of AM Law 200 firms to championing smaller businesses through his own practice. Discover why a written business plan is more than just a formality—it's the backbone of your entrepreneurial vision, detailing every aspect of your operation and preparing you for challenges like COVID-19. 

We'll also uncover the complexities of international business operations, from staying transparent to meeting varied regulatory requirements. Matthew sheds light on the multifaceted pressures business leaders face, including payroll, taxes, and compliance, and offers invaluable advice on crafting effective business plans and governing documents. Drawing from his personal experiences and professional networks, he underscores the importance of self-belief and thorough preparation. Tune in for an episode packed with expert insights and practical tips to help you navigate the legalities of your business journey.

Chapters

• 0:02 Navigating Business Legalities and Planning
• 16:34 Navigating Business Challenges and Advice

Transcript

Speaker 1: 0:02

Let me invite you to sit back, drop your jaw, tongue and shoulders, take a deep breath and, if you wish, close your eyes for a moment and feel the beat within. In a few seconds, you just jumped from head to heart and felt the beat within opening up to receive even more value and fulfillment out of your business and life. And today's episode. I'm your host, nico van de Venne. Confidant to successful CEO founders and entrepreneurs striving to achieve everlasting fulfillment. Welcome to the Everlasting Podcast with our next guest, matthew Fornaro. Matthew has been a business law attorney serving South Florida, including Carroll Springs and Parkland, since 2003. Before starting his law firm, he was an attorney at two prestigious laws 200 law firms focusing on civil litigation, am Law my apologies, I misspelled that, I think. Is that something specific, matthew?

Speaker 2: 1:14

Yeah, it's AM Law.

Speaker 1: 1:15

Yes, AM Law. Okay, okay, might be interesting to talk about that. Matthew practices complex commercial litigation, including contract disputes. Well, we all have those. Matthew is a member of the Florida Bar and District of Columbia Bar. Also practices construction law, intellectual property law, homeowner and condominium association representation, and drafts and revises of business documents, including the formation of business organizations. Wow, matthew, I'm going to stop right there because that's already a load.

Speaker 2: 1:53

Thank you for having me, Nico. It's great to be here.

Speaker 1: 1:56

Yeah, it's fun to have you. It's a different aspect of business that we need to touch as well, because I think a lot of entrepreneurs or CEOs or founders encountered the law or anything that is contract related. How did you tumble into this professional?

Speaker 2: 2:18

Well, I knew as a kid growing up I wanted to be an attorney. So I used to watch like here in the United States the people's court and other shows like that. So I went through my undergrad, I got a political science degree to set up to go to law school. I went to law school. So the way I got into helping businesses is that when I came out of law school I worked for two large uh Amlaw 200 law firms and I helped out and worked for huge banks and businesses and multinational companies and things like that. So I had the opportunity to go out on my own and start my own firm and I wanted to take that knowledge and that skillset and help smaller businesses when I used to help larger businesses. So that's kind of how I got into the space.

Speaker 1: 3:09

Okay, okay, and AM law. What should I understand in that story?

Speaker 2: 3:17

It's a thing in the United States where they rank the size of law firms. So AM law 200 means it's one of the 200 largest law firms there is. So it goes like Amlaw 100, Amlaw 200, Amlaw 500. So I went to 200 firms.

Speaker 1: 3:37

Okay, okay, okay. So is that the size of the amount of lawyers that you have?

Speaker 2: 3:44

Yeah, that's the amount of lawyers that you have. Yeah, the number of lawyers. So I worked at one firm that had like 200 and some odd attorneys, and then I worked at another firm that had over 300 attorneys.

Speaker 1: 3:55

Okay, Okay, exciting, exciting. So what's the kind of businesses that you encountered during your normal days?

Speaker 2: 4:04

You know, I represent a variety of businesses in all kinds of sectors, whether it's selling things, whether it's servicing things, whether it's brick and mortar or whether it's online. I have a wide cross-section of businesses that I deal with both nationally and internationally businesses that I deal with both nationally and internationally.

Speaker 1: 4:26

Okay, so you're mentioning internationally. Is that worldwide or is that directed towards one of the zones?

Speaker 2: 4:34

No, that's worldwide I represent. I have clients in Canada, I have clients in the UK, I have clients in the Netherlands and a couple other places okay.

Speaker 1: 4:47

So that's why, um, we talked about soccer really short in the in the green room. That's why you know about soccer a little bit then as well.

Speaker 2: 4:54

Yeah, I gotta keep up with my clients and know what to talk about. So, although you know of italian heritage, I'm always for Italia.

Speaker 1: 5:05

Well, nobody's perfect. Yeah, it's good, so yeah, so you meet all sizes of businesses. What are kind of the struggles that you see most happen during your visits or your conversations? That?

Speaker 2: 5:27

you see most happen during your visits or your conversations. You know, a problem that a lot of businesses have is when they start up, they don't have a written business plan. So having a written business plan is something that kind of crosses national boundaries that all businesses, no matter where they are, should have. And essentially, your written business plan is you put down on paper all aspects of your business, like what do you intend to do with your business, who's going to be in your business, how's it going to be set up, where are you going to get money from, what are you going to do, what spaces are you going to rent, what websites are you going to use, what footprint are you going to have, whether it's virtual, digital, whatever. So an issue that a lot of businesses have is that that's the genesis and that's at the beginning of any business, and a lot of businesses don't do that. So they get off on the wrong foot by not having the most key building block to start a business, which is a written business plan.

Speaker 1: 6:24

Mm-hmm building block to start a business, which is a written business plan. Well, I've experienced I've been in business now for four years as a full-time. I used to be an employee before that. What I found in the last couple of years there are some challenges that came out of COVID, of course is that I kind of started off thinking what I was going to do with my business and I had a complete business plan with an Excel sheet spreadsheet with everything on it, even the details of every little bit of equipment that I had and I wanted to use. But it ended up being something completely different, which I found that a business plan is something that it's alive. It's alive. What's your point of view on that?

Speaker 2: 7:13

Yeah, I mean, it's a document that's subject to change. I mean it's not written in stone, so you just have to make sure that you keep it updated with what you're doing in your business. If you pivot and do something slightly different, or you change people around or you change ideas or whatever, just make sure it's reflected in your plan. It's not set in stone. You don't have to 100% abide by it If things change.

Speaker 1: 7:38

It's not set in stone. You don't have to 100, abide by it. If things change, it's fine to change it, and is that like the? So there's there's a lot of financial stories in business plans and ideas, but which aspects to you or to your mind are are forgotten at the legal level.

Speaker 2: 7:54

Your mind are forgotten at a legal level. At the legal level, well, I'll speak here in the US and it's similar in other common law countries like the UK and things like that you have to have. Well, it's similar in most countries too. I mean, you have to have written documents that support your business. So a lot of people just kind of skip that step and just go and start a business and just like register a business, Like here where I am in Florida, all you have to do to start a business is go online to our state's secretary of state website and just click on a few clicks and pay $70 and you're in business, and so that's literally the bare minimum you can do.

Speaker 2: 8:40

The problem is is when you do that, for here in Florida, you, if you start like a company, you have to have articles of incorporation and corporate bylaws, which you don't have to do to just sign online to do it. But in the real world you need it. So it's similar in other jurisdictions too, where you can just show up at an office, fill out some paperwork and call it a day and you're in business, or go online and you're in business, but you don't have your actual supporting documents regarding your business that you need to have in place. Because you need those in place? Because further on down the road, if you need to get a loan from someone, if you're involved in a lawsuit with someone, if you want to sell your business, you need those documents. Otherwise you're going to have problems.

Speaker 1: 9:28

And so that's right at the start, you already need those, or is it something that you can build up?

Speaker 2: 9:34

No, it's something you should have right at the start. I mean, you can add it later, but having it at the start is very important because I find it interesting that even even here in belgium, the the start of business.

Speaker 1: 9:50

I think it's almost the same what you just mentioned. Uh, you go online, you say they call it the Kammer von Coop Handel and then you just register and say I have a VAT number, I need a VAT number, or I don't need a VAT number. So we have a limit of I think it's 20k that you can earn a year and you don't have to calculate VAT or something like that, and that's the only option that you have to click. So there's nothing else there that informs you of your rights, but also your what do you call it? It's not your rights, but your obligations. Sorry, your obligations, Obligations. Thank you for helping me there.

Speaker 1: 10:39

I couldn't find the word, but indeed I find that very confronting sometimes, as I've been doing this for a while now. I have is contracts that I have either found from somebody else, reused them and started rewriting them, and then ask somebody who has some legal knowledge to review them and that's it, and that's the only real documents that I have at this point. Of course, I have my official documents saying that I am an independent person and stuff like that. I am an independent person and stuff like that, but all the rest of the documents there's no forced legislation that tells me to do that.

Speaker 2: 11:24

Yeah, it's different in each jurisdiction, but, generally speaking, you should have those documents wherever you are, in order to not just go with your business plan but also to show what your rights, responsibilities, obligations are under your business model. Whether it's like if you're in Germany, whether it's like a GMBH the way the Germans have their stuff set up or Italy with an SPA, or Britain with an LTD, it's all very similar where you need to have those. I mean, you can legally set it up, just like you can in the United States with bare minimum, but you should have those papers that go with your business in order to be able to do stuff later on down the road.

Speaker 1: 12:08

Okay, it's interesting. I'm learning stuff. I quickly need to find somebody who can help me with that.

Speaker 2: 12:16

And then also as far as the contracts go. The contracts are obviously something that arises out of while you're doing business. You need contracts to sell things, to buy things, to govern services and whatever. And that's why contracts are very important at the inception of your business, because contracts are the framework by which parties govern their relationships with each other, because the contract says what you do, how you do it when you get paid, how you get paid, and then the contracts provide for what happens if there's a problem or if someone doesn't do what they're supposed to do in the contract. So that's why they're also essential documents too. They're more in the practice of business, not just in the setup of business yeah, yeah, yeah.

Speaker 1: 13:05

Well, one of the things that I've um, I've wondered um is a while back. I wanted to set up this online shop you one of those Spotify but Shopify shops, and, seeing that I'm in Europe and somebody in the US might buy these things, there's a lot of standardized documentation or conditions that are applied on those systems, and what would you advise somebody who thinks of you know, I'm going to go internet, I've got these beautiful drawings, I want to put them on Spotify and I want to sell them to anywhere in the world. What kind of advice would you give somebody who starts with those things?

Speaker 2: 13:51

Well, you've got to be very careful because once you move outside your home jurisdiction, you're subjecting yourself to the laws of other nations, other states, and the responsibilities that go with dealing with those states. Selling me stuff here in Florida, in the United States, depending on how the transaction would happen, you'd be responsible or I'd be responsible for whatever selling here to whatever would be responsible for paying Florida state sales tax, even though you're in Belgium. So if you don't pay that tax, you're going to get in trouble. So one of the things you do is, if you're going to go internationally or whatever, is that you want to make sure that you're complying with the local requirements as far as paying taxes, paying fees and things like that.

Speaker 2: 14:47

A lot of these platforms will do it for you, like Amazon and eBay and stuff will. They'll know that if you're you know, if you're in Canada and I'm in the United States and I buy something from you, that I'm going to have to pay your Canadian VAT or whatever, versus just whatever. So the platforms themselves have a lot of that information, but you just want to double check it to make sure that it's there, because you don't want to be hanging out one day and then all of a sudden, you get served with a lawsuit from a different country saying that you didn't pay the taxes, or you didn't pay the vat, or you didn't pay the duty or whatever it takes. So it's you know, it's just learning, making sure you're well informed with what you're doing and, like I said, a lot of time on the online stuff, the platforms take care of most of it themselves these days yeah, yeah, yeah.

Speaker 1: 15:40

Indeed, uh thing is that I, for instance, myself, I'm I'm putting out a service, uh to a lot of people in the us. Um, so if I understand you correctly, basically if somebody would buy my services, they would would pay the invoice, but then I would be responsible to get the VAT over to the US and pay those taxes over there. Is that how I see it? Is that correct, correct?

Speaker 2: 16:07

depending on the jerk, because in the US it's not a national tax, it's a state tax. So, depending on which state you're in, there could be tax involved or not. It's on a state by state basis, because some states have, like VAT or sales tax, some states don't, and some states tax certain things while other states don't. So it's all totally subjective.

Speaker 1: 16:34

Okay, so there's a need for some transparency there, internationally, of course. Is there any locations or except for, of course you know, asking you for advice is there any location where these informations are readily available for somebody who's internationally working?

Speaker 2: 17:08

Sure, Other than you know, consulting a business law attorney like myself or someone locally or whatever for someone who's going to do business like in, the, tell you nationally how you can do business and it'll break it down on a state-by-state basis and then it'll tell you where to go to for each state to find out the specific state information.

Speaker 1: 17:30

Okay, so that's kind of do your own research, basically yeah.

Speaker 2: 17:37

Or hire an attorney to do it for you.

Speaker 1: 17:38

Yeah, yeah, of course, yeah, that might be even a better step forward. So in your experience in the last years, so 2003,. So you've got like 20 years under your belt already you talk to a lot of leaders within companies. I suppose what's your experience with their personal attitude and feeling around business and how they're sometimes pressured to get everything done and so on? Do you talk to them about those on subjects?

Speaker 2: 18:22

Yeah, I generally try to talk in addition to just being an attorney-in-law, so I try to counsel them as well with their businesses and what they're doing. And you know other issues that not necessarily are in black and white or within, like you know, a legal issue or whatever, but just in a general business development issue or how they treat business or whatever. And obviously you know being in business is a stressful thing, no matter if your business is successful or if it's not successful, because you want to succeed. But at the same time you have all kinds of different requirements, like you have payroll, you have taxes, you have rent, you have various overhead, you have bank issues, you have government issues, you have regulatory issues. So you know I talk to clients about that and I try to help them out and give them good advice in order for them to ultimately make the business decisions that they need to make to make their business prosper.

Speaker 1: 19:22

And is there anything that's happened recently? That might be an interesting story for somebody to learn from as a business owner or as a leader.

Speaker 2: 19:33

Just, you know, keeping it, no matter where you are, whether in Belgium or in Florida, just keeping up with changes in the law. There's a lot of um you know international, national, local state, local, county um rules that change, so you always have to make sure that you're up to speed on that Cause. If you using out-of-date forms or using out-of-date information, you're going to have problems, no matter how much other due diligence you use, because you're using yesterday's model today, which is going to be a problem. So that's one of the things that I think transcends international boundaries is always keeping up with what your regulations and what your laws are okay, okay.

Speaker 1: 20:24

So in your own personal experience because you're you're also, basically, you're also a small business owner how do you tackle all the the challenges with with having a business and having people work for you? How do you, as a leader, feel in that position?

Speaker 2: 20:43

Well, you know, obviously I got to preach what I teach, so I have to make I mean, I have a written business plan, I have governing documents, I have contracts that are in place and I make sure that when I do new things or, you know whatever, change things or whatever I make sure that I always stay current with that and I don't stray away from that because even though I may change my business, I may change employees, I may change you know, internet service providers, I may do something. You know internet service providers, I may do something I've got to make sure that I still have all my processes in place in order to make sure that I'm still, you know, doing what needs to be done and doing it correctly.

Speaker 1: 21:25

Hmm, and so you yourself. You're an advisor to entrepreneurs and any kind of business size. Who do you counsel on your side? So who might be your mentor or your advisor?

Speaker 2: 21:45

I have a lot of friends who are business owners, so I keep my thumb on the pulse of what businesses are doing, as far as what they're experiencing outside of being their attorney, just talking with them having a beer and just discussing, like, what's going on? What issues are you seeing, you know, how is inflation affecting you? How are taxes affecting you? How's labor issues affecting you? What do you think of, you know, various issues or whatever. So I have that. I have some senior attorneys who I used to work with, who I keep in touch with, who, um, you know, I still talk about the law with and changes in the law and things like that, but generally it's just I keep a open, uh, you know, I keep an open channel with different people and I like to discuss things with them that regard business, not necessarily in a I'm your attorney context, but in a, you know, let's hang out and, uh, you know, business comes up, we'll chat about it while we're watching football or whatever it is we're doing very important to watch football.

Speaker 1: 22:50

Yes, indeed. Is there any anything that you want to want to bring out today for the listeners that might make them a little bit wiser? Any questions that I haven't asked because I might be limited with my perspective?

Speaker 2: 23:06

No, just the main thing is you know, when you're in business, you got to believe in yourself. So set yourself up for success, don't set yourself up for failure. Make sure you have all the tools and processes in place where, if your business succeeds or fails, it's on its merits, it's not on technicalities. So you just want to make sure all your documents, all your regulations, everything's in line so that that way you have the best possible chance of succeeding. And then, if you don't, it's because it wasn't meant to be, it's not because you didn't have this form or this letter or whatever. So just believe in yourself, do everything correctly and you should be fine.

Speaker 1: 23:50

That's some great advice right there. Yeah, I can put some backing on that. Indeed, it's very important to know that, even though sometimes it's difficult to see what's going to come ahead, it's very important to know the basic layer has been completed, as they say, that you can fall back to the stuff that is really important, and if anything goes wrong, at least you have all those things in order. So I think we've got a couple of great tips from your side, matthew. If people want to reach out to get more advice from you, what would they need to do? What's the process?

Speaker 2: 24:31

Sure, the easiest way to get a hold of me is to go to my website, which is fornarolegalcom. It's my last name, f-o-r-n-a-r-o-l-e-g-a-lcom, and then it will have all my contact information. It'll have my phone number, email address, it'll have all my social media contacts and everything, and then there's also a bunch of useful information for people on those a bunch of different podcasts and video blogs and blogs and white papers that they can read about if they have general questions about business.

Speaker 1: 25:05

Okay, that's very interesting. Well then, I want to. I want to thank you for your time, because I know you're a very busy person, and to give us a couple of tips that they can be that people can take with them, and at least they can reach out to you if anything specific comes up. So, yeah, thank you very much for your time.

Speaker 2: 25:24

Thank you for having me, miguel, I appreciate it.

Speaker 1: 25:27

Likewise, likewise. Okay, thank you very much, listeners. I think it would be a good idea to go to Matthew's website. If you have any questions that can come out of our discussion here, feel free and then afterwards, if it still doesn't solve your problem or your question, go right to Matthew and contact him straight away to ask the questions. Thank you very much, everybody, and I'll talk to you again next time. Bye-bye.