At the Car Wash: Legal Considerations for Small Business

Theres an old joke that given the choice between hazardous-waste dumps and lawyers, most states would choose waste dumps. Isnt it sad that the representatives of our legal system have such a poor reputation? No doubt attorneys face a public relations problem deserved or notbut the reality is business owners simply cant do without them.

We live in a litigious society, and business owners are targets. If you let your guard down and make a mistake, such as misread a legal document or make an off-hand remark, you could face the threat of a lawsuit. For some customers, its the best get-rich-quick scam in town. Be prepared, and have a good lawyer to help you protect your assets.

Finding What You Need

From the inception of a business, you face legal issues. The process of procuring financing, closing on a property and getting planning approval is just the tip of the iceberg. Lets look at a typical business cycle.

You begin full of vim and vigor, intensely excited by the prospects of owning and operating your own venture. You find a promising piece of property. You ask the real estate agent if your use for the site is permitted and if it has the correct zoning. He confirms, and you decide to make an offer. You get an overwhelming stack of documents from the broker. Youre no dummy, but suddenly you feel inadequate to handle all this paperwork. At this point, if you dont have a lawyer, you need to find one. The question is what type and where.

If its just a question of acquiring real estate and assembling basic incorporation documents, a general practitioner should suffice. Unfortunately, in this world of specialists, youll probably have better luck with a practice that focuses on several disciplines. The Internet is a great resource, including websites such as www.lawyers.com.

Once youve identified your needs and found an individual or firm with whom you are comfortable, you can start giving assignments. Remember that lawyers bill by the hour, so be very specific about your requirements. Every time you call, write or visit, the clock is ticking, so dont dillydally. Create a concise list, ask the right questions, and get the answers you need.

Down to the Nitty Gritty

If youre building a car wash, your attorney will play a major role from the day you find the site until you wash your first vehicle. Its important to note that in the pecking order of desirable businesses, car washes are somewhere below pet crematoriums, adult shops and used car lots. Because planning-board approval is not a given, your attorney will strongly recommend you have several contingencies in your offer that relate to zoning.

After you review and approve your purchase documents, ensuring there are no restrictions or environmental issues, youll acquire the property and create your site plan. Once youve gotten good direction from the city planners and engineer, youll present this plan to the board for approval. Your attorneys knowledge and reputation, as well as his rapport with the local community, may spell success or failure for your project. There are many other professionals who play a role in obtaining your approvals, but aside from you, your lawyer is the lead contact.

Assuming you get a green light to proceed, youre now looking at a raft of legal documents. Vendors, architects, contractors and other professionals will want you to sign contracts. In addition, if you secure financing, youll be asked to sign everything over to the lender.

By now youre probably wondering who needs all this aggravation. But if you want to play the business game, a bit of legal angst goes with the territory. Try to stay calm, and turn the tough items over to your attorneythats why he makes the big bucks! Just remember that a lawyer is paid to see the glass as half empty, so dont be discouraged by what he may tell you. Attorneys arent paid to make business decisions; theyre paid to give you sound legal advice so you can make the smart call.

Fred Grauer is president of Grauer Associates and vice president, investor services, for Mark VII Equipment LLC, a car-wash equipment manufacturer in Arvada, Colo. He has made a lifelong career of designing, selling, building and operating car washes. He can be reached at [email protected].