Episode Transcript
Nina Huchthausen (00:08.91)
All right, welcome everybody to the Makers Business Tribe podcast. My name is Nina and today I have the pleasure to interview Davina, who is our MBT law partner and she calls herself the mom lawyer. So, and in today's episode, now she's not just looking after moms per se, but business owners who happen to be.
moms, yeah, and it is very closely aligned with the people that we very much support in the Makers Business Tribe, which are product -based business owners, and hands down probably 90 % of those happen to be female and happen to be moms. So this is the perfect fit. And in today's episode, I would like to have a conversation with Davina, not just to introduce her to you, because I think it's just really good.
to know a lawyer or someone that you can talk legal with if and when you need to. But I think most importantly, get a better understanding on the key things that you as a new business owner or business owner who's about to embark into getting their product into retail or really driving sales online, what
What do you need? What do you need to consider from a legal perspective to make sure that you and your business are always taken care of and protected in case anything goes wrong or goes down a path that you didn't expect, right? Because when the sun is shining and it's 23 degrees, okay, then we don't need any support or protection. But hands down, we know it's not always the case.
And then what do we do? So in today's conversation, I would like to probably ask Davina the questions that you should have a conversation about with a lawyer at some point. But unless we want to spend $500, $600 and talk to someone about this, we probably don't. And we probably don't even seek someone out to see.
Nina Huchthausen (02:28.718)
What is all the knowledge that I need to gather as a business owner from a legal perspective? So here you go. I'm serving you the broccoli and I'm going to make it as tasty, fun and entertaining as we can because sometimes you got to need to eat your broccoli. Okay. So that's how I see this conversation to go today. So without further ado, welcome Davina. And yeah, I would love to love for you to introduce yourself.
because I think you can do your job title and what you do much more justice than I can. thank you, Nina. Yeah, absolute pleasure to be here. Thank you for having me on the show. I am Davina, the founder at the Mumpreneur Lawyer. So yes, we do help mums. We also help women. We also help the husbands and brothers of women. So.
We really do serve all genders and people with and without kids, with fur babies, all the rest. So yes, there's a focus on mums, but I'm the mum. Yeah, yeah. So I've been a lawyer for over 20 years now and a business owner for around six.
And yeah, a single mum of one boy. And yeah, just love serving my community, which is made up of, yeah, incredible business women for the most part. I love that. I love that because I feel like I never, I never wanted to accept this in my mind until I became a mum. But when you are a mum,
and a female business owner, you are number one, incredibly strapped for time. And number two, there are just certain things that seem to be sometimes a little bit harder to get across or to get through or to get done. And then at least if you were single, OK? But the more responsibilities I feel like me as a female, I have in life.
Nina Huchthausen (04:52.557)
the more important it gets to have the right people in your court when you need them, that you can just pick up the phone and talk to because, you know, like time is so often of the essence. And that's why I really like that you dedicate yourself to that space because it's, I feel like even like just a few years ago, I hadn't ever dealt with a lawyer before. And all I knew was,
The horrible experiences in my family when someone had passed away and the lawyer got involved to divvy up the assets. And it was horrible. And the fricking letter writing, like, that's how it was like, this is scary. I don't want to go there. Yeah. So unfortunately, so many people have a not so good experience with lawyers.
or even with the justice system. So, I mean, things do need to change. Gradually they are. But, yeah, unfortunately, you know, often it is a particular time of life that is difficult anyway. So you might be going through a separation or a divorce or someone's passed away. And that's when, yeah, you need a lawyer. But
unfortunately, sometimes people's experience during that period with a lawyer makes things not much better. So I'm yeah, I'd love to turn that around and make people's experience with lawyers much lighter and more fun and and not so much like broccoli, but maybe like broccoli with some beautiful butter and herbs or something like that. Yeah, exactly.
Because you can make broccoli steamed and then it tastes like really bland and like weird or you can make it beautiful. By the way, I love broccoli. But yeah, I'm good with wonky analogies where you kind of be like, what did you just say? I think broccoli is great. It's something you have to do, something you have to eat. It's good for you, but you don't always want to do it.
Nina Huchthausen (07:15.597)
Don't always want to see the lawyer, but you know that you need to because if the day comes when you need to rely on your legal documents, it's best that you've done, gotten things in order early on and that you've been proactive about things. So same with your health, you know, it's better that you eat the broccoli now than suffer the consequences down the track. Yeah, exactly.
But I think that the struggle is, right, especially first time business owners, you just don't know. Like with your own personal, you know, you need health insurance, okay, when you turn 18, you just sign up for health insurance, you know, you've kind of come across this. But there isn't ample advertising out there that tells you, hey, your first time business owner, you need this, you need this, you need this, you need this. It isn't out there. So,
And unless you are a first time business owner and are really proactive and Google and find out what you might need, but then you might still be like, wow, that's really expensive. I'm sure they just want to sell me stuff. And then you get on your merry way and do other things. You might not do it. So I thought maybe today we can actually just put on the table what are the key things that if you are getting
a little bit more serious in your side hustle that you need to put in place or sort out and actually work through with the lawyer versus chat GPT. Sure. Because I also hear that a lot from people too that's like, I just let chat GPT write my legal documents. Ooh. Yeah. So that's right. And I think it will be great.
I made a little bit of a list so we can kind of work through that. Because the first thing that I got wrong, because these are actually all things that I got wrong. That's why I'm bringing them on so you can help us out here, was looking at my business structure because I started off with a business partner.
Nina Huchthausen (09:37.325)
And we didn't have, we didn't have really cleared and squared away how this is going to work. Because it started off as a hobby, right? So, yeah, yeah. So, I mean, there's, there's different business structures. Obviously, the partnership is one and having an agreement, a formal agreement between the two of you is so important. And yes, people go into it thinking, you know, it's, it's a small
side hobby hustle that may or may not grow. But the reality is things can grow fast and you need to be prepared, particularly because if things do go wrong, you want to be able to point to some sort of rule book. So, yeah, I mean, the most common structure is really the sole trader that people have, like the lone ranger. So that's when you're
Like you're the boss, you're the employee, you're everything. So it's really easy to be a sole trader. You just set yourself up with an ABN and then you get all the profits and everything. But you need to be aware that there's actually unlimited liability there. So your own personal assets are at risk. And if you do have a home or quite valuable personal assets, that could be quite a risk.
Yeah. And then the other thing to think about is that if you do want to raise capital or get investors involved, a sole trader is not going to be looked on very favorably. They're going to want to look at at least a company sort of structure. So, yeah, I mean, there's there's different ones. Obviously, you tried the partnership.
partnership can be quite similar to the sole trader, except there's two of you. So, yeah, in terms of pros, like it's really good because you're combining a skill set and you can kind of share the journey together and brainstorm and everything. But at the end of the day, you're actually also both liable for each other's mistakes. So.
Nina Huchthausen (11:59.757)
If you have a lot of personal assets and they make a mistake, your exposure could be really, really high. And if you don't have things formally set out, there's a lot of room for conflict there. So unfortunately, I often see partnerships go south and we have to sort out what's going to happen. And it's not always pretty, but that's the lay of the land.
I feel like for me, like my, my biggest learning, like doing a partnership, and it wasn't even set up as a partnership. It was just like, okay, I happen to have a company and then like, okay, cool, we're just going to work as partners on this thing. So, and then at some point I was like, we have to sit down and actually write out who owns what here, because if we are making money, how are we paying ourselves? What's the, what's, what's the dealio? And also,
what if we, you know, how does it work in terms of input versus output? Are we cool with it? One, because, and this is the reality, we have a few members in our tribe who still to this day was like, have you guys sat down with the lawyer? Like, because one person is working incredibly hard. And the other person has another business going and is also working incredibly hard, but can't put the hours in. At some point.
Person A, just having that as their sole focus will get frustrated. And then what do you do? Yeah, absolutely. So they're the sorts of things that you can really tease out at the beginning. You know, what your expectations are of each other, what sort of skill sets you bring, you know, what to do if one of you's sick, what to do if one of you wants to go on holidays. All those things can be really teased out and then put in writing in an agreement between each other.
And yeah, and it just smooths the ride for both of you. Because if you've talked about those things and have the difficult conversation at the beginning, then if things do go belly up, then at least you can both turn to your agreement and enforce it. Yeah. And that's something that you do, right? That you sit down with two people you want to go into business with and
Nina Huchthausen (14:27.885)
works with those questions. Because I would assume a lot of people might be like, well, I don't know what questions I should ask. Yeah. So usually what I do is I have a list of questions that I send people when they're sort of setting up a partnership and they go away and think about the answers to those with their partner. And that really helps me customize an agreement specifically for them. So yeah, I mean, that's how we get
a partnership running smoothly. The other structure, of course, you mentioned that you'd set up a company. So company is great. Obviously, it's, you know, it's well, not obviously, but it is a separate legal entity to us as individuals, which actually means it can own its own property. It can sue and be sued. So in that respect,
it's, it is separate to you and so separate to your personal assets and gives you a bit of a buffer in case, you know, something does happen. So when you run the business through a company, it can, it can really help. So your personal assets will be, will be much safer. Generally safe then. It's also much easier to raise capital.
So an investor will look upon it favorably and it has a perpetual existence. So it'll continue even if you're not around. Yeah, so a company is, it's been around for a long time now, but it's not just big organizations that can take advantage of the structure. Also small businesses can do so.
It is a bit more costly than a sole trader or partnership, but sometimes it can be worth it, particularly if you want to scale or intend to scale. Yeah. Yeah. And also from my experience, it takes a little bit of time to get all of that set up. Right. So waiting till last minute until like,
Nina Huchthausen (16:49.069)
You know, I really want to get my product into retail and I'm like about to start setting up my retail deals. I think I should be better off with the company. It's not just a week long process until you get, you have all the, all the documents completed. You got the approvals from the ATO and got your director's ID and all of that stuff. So just from my personal experience, I would do it earlier when you have more time.
than when you were super frantic, things are crazy busy, you wanna hire another person and you got no time on your hands. Because this stuff takes a little bit of time. It does, it does. So if you can give yourself a month, that would be a good amount of time to get things set up, I'd say. Yeah. Awesome. Yeah. There are other structures like trust structures that are worth
talking to your accountant about because there's tax benefits there. So you might have some flexibility in the income distributions that you can make, but definitely worth checking with your accountant if that's a worthwhile structure for you to have. Awesome. And from what, if I understand this correctly, okay, this is at least how I've done it. My accountant had
he helped me set up the company. The lawyer helped me set up the legal documentation surrounding it with my business partner. Yeah, that's a great way to do it. You can definitely get an accountant or a lawyer to set up your company. But when it comes to the legal documents, particularly say a shareholders agreement or a partnership agreement, it's best investing in a lawyer because they then draft it to suit your circumstances.
Yeah. Yeah. And I think that's where the power really lies, because it's not that is it. Thank God it hasn't happened to me. But I've had friends who were in business with other people together. And at some point they decided they needed to part ways. And thank God they had a document like that in place, which opened my eyes of the importance for it. Because
Nina Huchthausen (19:14.477)
Even with the document, there was still a fair bit of things to go through and to change. And it was a highly stressful time for my friend. And I couldn't even imagine what it would have been like if, you know, because if the company is making, just thinking small, but if the company is making 20 grand a month, yeah, and there's one person who's really been working their butt off, the other person has kind of been there and not there, but says, well, but I want 50%.
because we did this together. Like, how hard is that? How do you work through that if you don't have the right agreements in place? If there was one person really building it and the other person going down the easy route? And I think it's not very uncommon that that happens because people have different work ethics and different dreams about things, you know, and lifespans and interests and
I think that's probably the number one thing for me to consider because you can create so much pain in that space. Yeah. You know, the pains, the tears and the... that just make you want to just like stop and walk away from the whole situation. I feel like. Yeah, I definitely come across situations that are really difficult, but having those...
documents in place just gives you a bit of, well, it gives you security. It gives you the ability to go back and see what was agreed, the ability to, you know, go forward knowing that, you know, okay, well, we've got a legally binding document that sets out how those shares need to be sold. Off we go and we'll let's adhere to this procedure. So.
Yeah, so it really does help and often it avoids a dispute totally. So, yeah. So the second thing that I had on my list, which I also did into my first business, was trademarking my business. Yeah. Because I honestly, first time around, I thought once I'd registered it,
Nina Huchthausen (21:36.269)
I am in the ASIC register, but that's all I needed to do. And I bought the domain. Yeah, that's also not the case. A lot of people think that. Yeah. So a lot of people really think that it's enough to register your domain and your business name or company name. And they don't get that get to do the extra step of registering their trademark, which does leave you exposed because
whole idea of trademarking is that you then get exclusive use rights to that product name or brand name or logo or whatever it may be so that as you grow, you can really invest in that and know that that's your space and that's yours and no one can step on your shoes there. So
Unfortunately, a lot of people don't take that extra step. Yeah, you're right. Yeah. And I mean, including some of the people in our tribe, we just had this example a couple of weeks ago, I think just before you came on, Davina, that I went to a shop and I thought one of my clients hadn't told me that he had launched a milk brand. Yeah, because it has his signature OMD.
on the milk and it looks like is Muesli brand, OMG. Yeah. Like, and it's really deflating because you can invest a lot in your advertising, a lot in your branding and design and everything. And if you don't protect it, then it gets very difficult to enforce your rights there. Yeah. So, I mean, when we talk of trademarking, we can really look at
protecting names or logos or slogans or anything like that, and then they become exclusively yours. So that, I mean, it stops consumer confusion as well. So if you've got, you know, two brands out there that are too similar, then customers will buy the wrong one and then your reputation is mixed up. So the whole idea is to avoid that. Yeah. Yeah.
Nina Huchthausen (23:59.309)
And I think that's.
Again, if you think if you're just selling your product at a market and you've got no intention to make it any bigger and you would be OK if someone called your product exactly the same as you and then make that big, if you're OK with that, then of course then you don't have to go through the trademarking exercise. But if you really invested a considerable amount of time into your product and you want to give it to the world,
You have a deep desire, even though if you're shit scared to go big and you're like, no, no, no, no, I'm just going to sell the markets. But if you have that dream inside of you, why not protect future you? Because who's not to say that in three, five, 10 years time, you might be like, now I got the time, now I got the money, now I got the capacity. I'm going to give it a red hot go. Yeah, absolutely. You want to be protecting future you.
and to your brand. Often people, you know, think that they'll push it back, which is okay to a certain extent if you want to test the market with a particular brand, because there's no use investing in the mark if you're not going to be using it six months down the track. But the second you are really confident in your branding, you're really happy with it, you're attached to it.
you're investing in advertising, packaging, all these things, it's really time to jump on and learn about trademarking or get some legal help in relation to it so that you are going to be registering the right mark in the right classes with the right descriptors. So some people luck out and do that, get the right mark in the right classes. But some people
Nina Huchthausen (25:55.533)
Well, often they don't and approach me halfway through. I've got this issue with the examiner. Can you help me? And that's OK. But it is usually easier to outsource from the beginning. Yeah. Meaning really, because you can do it yourself, right? Yeah. And like from, well, I didn't try doing it myself because I didn't have the time. Yeah.
And I'm still waking to be approved because there were a few issues and stuff. So it was so much easier to talk to someone about it. But if you're doing it yourself and then register in the wrong class, which is also what happened to another tribe member of ours, because they wanted to save the money and then they weren't protected. Which is like if you don't protect it, it's going to be more money.
Exactly. So and because with our brand and our logo and our name, that is something that you don't do not just be like, well, I'm going to do something different. You're just going to sweep swap because how are you going to call up all of your customers and tell them, Hey, you know what, instead of Bob's milk, we're just going to be called now Sally's milk. Just wanted to let you know, just look for something completely different.
Yeah, exactly. Most of the time you can't just do that. Plus, if you've been just from a product perspective, if you've printed thousands of labels, or you got even the or the outer packaging with the labels, they could be huge costs for you having to change it. Or even worse, if you haven't checked the trademark register and somebody else, which I think that's also a thing to do.
not just thinking about, OK, I need to register my name, but also at the early stages to check, is there somebody already registered with Bob's Milk? Because if you develop the same thing, from what I understand, Bob can literally call you up and say, hey, Nina, you can't call your Bob's Milk. Yeah, yeah. So it's an infringement. If you release a brand that is the same or deceptively similar to another one, then that's
Nina Huchthausen (28:18.797)
brand could have an action against you called like a passing off action. And yeah, you're going to need to rebrand and it's better to get that advice early on. Is this okay? Can I use this brand? Is it going to infringe on anyone else's rights? And if not, I'm going to protect my own rights going forward. So it's a really good investment to get some advice around trademarking early on.
and then make sure you've got a registered mark. I think, I mean, there's quite a few different areas of intellectual property. So trademarks falls under a banner called intellectual property. And there's different rights under that like copyright, trademark of course, patents, design rights, confidential information. So these are all, you know, areas of that.
part of law. But when it comes to sort of us product businesses, we're really concerned with trademark, yes. We're also concerned a bit with copyright because every time you write something on your website, you get copyright in that, assuming it's your original words. So often, you know, having a website disclaimer or something on there, helping protect your copyright in
the copy on your website is a good idea and also just claiming any liability in relation to information you have up there is a good idea. Then you've got design rights. So some product makers may actually have a product that they've designed themselves and it could warrant a design rights. So it could be worth investigating that also.
Occasionally, you might have one that warrants a patent as well. So some listeners might want to look also into design rights and patents. But all of you should be looking into trademark law because if nothing else, you're going to have to call your product something and call your business something and you're going to want to grow, I assume, and sell.
Nina Huchthausen (30:43.277)
and that's going to be your unique identity. It's going to build consumer trust and fend off copyright, copycats. Awesome. Yeah. Yeah. So that I think point number two, very important as well. If you know, if you love your creation, you know, and you want to get it out. And the third point that I had on my list, term sheets for
either a retailer, so if you get stock assembled to sell your product or selling it online. What are your thoughts there? What's important? Yeah, so I mean, definitely need to have some basic terms together. And obviously you want to set out the purchase, the stock and payment terms, product ownership.
delivery terms, refunds, pricing terms, they're all things that we want to make sure we ensure are in a term sheet. Yeah, and each of those, I mean, we can go into detail if you want. Do you want me to go into a bit of the detail? Maybe we can pick like three that you feel like if nothing else, but you really want to think through those.
Okay, okay. Very hard to distill to three. There's about six that you really need. But I'll try. Okay, let's go through the six and summary. And then I pick three. Sure. So your payment terms, you really want to just set out how they're going to pay and what happens if there's late payments. And then you need to make decisions around
So are you actually going to offer them credit and that needs to be addressed. Product ownership, you need to work out exactly who owns the product at the different stages. So are you going to retain ownership until full payment is made? Ideally, yes. But you may also need to consider the registration of what's called a security interest under
Nina Huchthausen (33:12.045)
the personal property securities register. So the idea of that is that you can claw back the product if you need to, particularly in the event of their insolvency. Delivery, you want to make sure you're across delivery logistics and you've agreed how that's going to work with them, who's responsible for shipping or lost or damaged product.
What about insurance? Another point to note is refunds, of course. How's that going to be dealt with between you? Is there going to be a particular process? You've got to make sure both you and they comply with the Australian Consumer Law in relation to any faulty product. And there's particular consumer guarantees all of us have to provide in relation to products.
They've got to be of acceptable quality, fit for purpose, match the description that you provide, say, on your website in relation to the product. Then you want some pricing terms. So you might have some restrictions to maintain pricing integrity there, like a minimum advertised price.
And you might also want resale restrictions. So where can they sell it or who can they sell it to? Or prohibitions on labeling or sale items, clearances, things like that. Yeah, that's in summary. Awesome. So I think maybe I add a story to
delivery and why that's important to, to, to work through because, we had a, we have a client who runs a kombucha company and a, she was selling her kombucha to a distributor and a distributor placed an order well before Christmas to get
Nina Huchthausen (35:38.477)
the palette of kombucha and then sell it to all of their stores, right? All of those stores had already placed orders with the distributor. Yeah, he wanted to get the palette distributed before Christmas. So, what has happened is she packed that palette. This was in Western Australia. It's pretty hot. Yeah, meeting up to Christmas. And nobody knows what happened. But first of all, the
the delivery person that was owned by the distribution company, the distribution company owns a delivery company, picked up the kombucha and then the kombucha went kind of lost. So nobody could track it. Yeah. And they couldn't find that like the, I don't know, something couldn't find the driver for a few days. Okay. So the distributor then said, well, I don't think I have the product.
where she said, well, you picked it up. So you own the product. And he was like, well, I haven't paid the product and it's not with me. It seems to be lost in transit. These guys had no agreements in place by the way. Yeah. So at some point the product reached the distributor, but way too late, like one or two days before Christmas. So he had missed out on all those retail sales. So he was upset.
because they probably needed to do all sorts of things to smooth those retailers. But at the same time, well, she had delivered the pallet and this was a big order for her. So she had a big financial outlay. Yep. Yeah. And the distributor wanted her to take back the pallet on her own expense. So without a written agreement, all these issues just
get worse because, yeah, once you have something in writing that clearly states the ownership is transferred at a particular point in time and this person is responsible for any lost products in transit and this person's responsible for insurance and so on and so on, once that's in writing and signed between the two parties, you can rely on it.
Nina Huchthausen (38:01.709)
But if you don't have anything, then it makes it very, very difficult. And yeah, that's no wonder disputes can arise. Yeah. And I think just it's OK if your deliveries and your products are small and of low value, then you might be like, OK, I lost $500. I can live with that. But in her case, it wasn't $500. No. Yeah. And then.
what do you do, right? Because in her case, I'm not sure what the actual outcome was, but it was not pretty. And then it's very scarring to go through that. And I think if anyone listening to this thinking through their order volume, right? And if those products get lost or damaged or something, doing the delivery
pick up process or process to get the products into shelves, especially if you have goods that can go off at certain temperatures. It can go such a long way to have a good agreement in place. And I've thought through all of the scenarios and have that put down in writing because it only, this document only needs to be signed once, right? When you enter into the relationship with someone.
as well. So we, you know, in those, everything can be dealt with as well, the agreement. So if there's particular temperatures that a product needs to be at, that can be stipulated in the agreement, or if there's particular ways that it needs to be stored and transported, all this should be written and agreed upon prior to things being transported and,
damaged or lost. So yeah, if those agreements are in place before things go wrong, then you know, it's really clear who's responsible at that point in time. And obviously we make sure that when we're the product owner, we have favorable terms to ourselves. Yeah. Yeah. And so having a really good term sheet just
Nina Huchthausen (40:29.741)
can become such a good friend of you. And I have heard from people all, but I don't want to scare a retailer or a stockist or distributor away with my terms, right? But my thinking is more like, well, if these are not good people, then they might get scared away because if they read a properly written term sheet, they might realize it's quite bulletproof. I think as well,
I mean, for the most part, it makes you look professional and prepared. So I think, you know, most retailers would appreciate that you put together something that, you know, they can consider. And even if they don't agree, it gives you a really good starting point. So, yeah. Awesome. Cool. So then because I'm just conscious of our time and you explain all those points so well, I feel like
We've given everyone a bit of an understanding on term sheets. Yeah. All retailers, right? But the last thing that I think is also very important to consider early. Yeah. Is an agreement for when you start outsourcing your manufacturing. So your manufacturing agreement. Yeah. Yeah. On your product. Yeah, sure. Definitely. So I mean,
Some people, when they start talking to manufacturers, they might have confidential ideas. So we want to enter into an NDA or non -disclosure agreement with them so that you can kind of really discuss with them without them running off with the idea and then selling to competitors. So that's always a good start. And then from there, you either will be given their manufacturing agreement or you can present
one of your own. So it will sort of depend on the negotiating power as to whether you present your own or vice versa. But definitely worth a lawyer reviewing that contract or preparing that contract so that you've got everything covered. Yeah. Yeah. And here, like, again, we got plenty stories. And I'll try.
Nina Huchthausen (42:58.573)
Not because we haven't prepared them, but most of the time people came to us and it had happened already. Because most of the time people start working with or start seeking out a manufacturer when they are incredibly busy, right? Because they've been making their product at home or in smaller facilities and they've been realizing I cannot scale. I only got so many hands, I'm working late nights.
You know, I just, I need help. So then it's like this frantic juggle of like, who can help me? Right? And as soon as you found someone's like, cool, okay, you can help me. And then I mean, the hardest thing with manufacturing is to finding a good one. But once you've gone through all this pain of finding someone who can finally make the product to your standards, to your quality, to your terms,
you know, and not charging humongous amounts. Most people forget that really essential part is the legal side of that agreement because it comes last, right? Yeah. For most people, it's like the very last thing. And we know how we feel once we've run a marathon and finish line is so close. It's very easy to forget. It is. It is. But it's fine as well because you want to...
you know, get your product out there and yeah, it's easy to try to rush and, and, and, and just go forward. But you really want to set out some rules as to how you're going to work together with them. Like what's going to happen in terms of quality control. You know, how's that going to work? Inspection rights, procedures for handling defective products. They're all things we want to make sure are covered off.
And yeah, I mean, lawyers can help you draft those sorts of agreements and make sure everything's in them. Yes, you know, like to harken back to what you were saying before, yes, chat GPT can give you some ideas. But at the end of the day, you really need a lawyer's skill to draft things like liability clauses and make sure things are in order and make sure that the agreement is congruent with what
Nina Huchthausen (45:23.117)
you want because yeah, ChapGPT, I don't think it's there yet. It's probably can give you a very rough draft of an agreement, but it's not, it's not nearly up to scratch. Yeah. And for me, especially like with, with, with the manufacturer, it's almost like your business partner because you cannot go without. You know, you're really entering in a
very dependent relationship there. Because this person, yeah, let's imagine you were to make granola, right? And you like, they start cranking up, that's the volume, and then you move into a sales role. Yep, they stop making your granola, you got nothing to sell. Exactly. You got to get it right. And
Yeah, the relationship is really important and setting out the rules early on gives you that kind of groundwork and the frame of how you're going to be working together. It also sets out, you know, how you're going to deal with IP. So, so just to rehash what I was saying before in terms of confidentiality, you might have particular ways that you want the product to be made.
are particular things that are unique to you that you don't want shared with any competitors. So all this information is available to the manufacturer because you need them to make the product. So you really want that agreement to be tight, particularly concerning non -competition or non -solicitation, it's sort of called, where they take your idea and could maybe
you know, manufacture a similar product for a competitor. So yeah. Yeah. And I've seen that too. Yeah. And again, it's devastating because you've handed them the keys. Yeah, exactly. Yeah. Yeah. And if you are handing them the keys, even if you're just doing a trial run, you've just given them the keys. It's like you've given them the password to your bank accounts.
Nina Huchthausen (47:40.973)
And you need it back. You need it back. Exactly. So it's a really, really important document to get right so that you can then you're building a relationship on trust and transparency. Because if something doesn't work out and you have objectively written out how you deal with dispute resolution and how you part ways,
And all the things, especially when you're saying no to someone, saying, OK, this is not working out. I'm going to find somebody else that is stipulated how they still need to operate for you. And can't just not make granola anymore once you've told them the notice period and things like that. Because it's a very, very important thing to get right when you are at that stage and just working
with a lawyer to let yourself be guided through. I think it's really good. But can I ask you, and this may be a quick side step, but I've seen a lot of online companies where you can just say, I want this agreement, I want that agreement. You pay $99 and he puts stuff in and then they send it to you. Yeah. Yeah. Do they legally do they do they work like is that as good as having worked with the lawyer?
No, in summary. So, I mean, there's plenty of templates that you can buy and kind of like chat GPT, it might give you a rough outline of the kind of things you would need in an agreement. Sometimes it might cover you sufficiently, sometimes it might not. And that therein lies the difficulty without a lawyer looking over it, considering your specific circumstances.
and making sure that your business is protected, it may not. So it's like the going out on your own and registering the trademark. It might be effective. You might get a registered trademark after eight months. Your manufacturing agreement might protect you. But do you want to find out in court in two years' time? Not really. So yeah.
Nina Huchthausen (50:06.829)
Hopefully that answers the question. Yeah, I'm all about customizing of documents and making sure that they really reflect the business that I'm working with and obviously the business that the client's working with. So, yeah, it's definitely the way to go.
does make sense because I think it's almost it's again like false insurance, right? You're kind of like, I whacked something together. I'm sure it'll work out because it's cheaper in the moment. But I would always like thinking about, okay, what could the cost be? If something went wrong, if I'm okay with it, go all on black, you know, then that's fine. Yeah, you're not okay with it.
Right? When you're objectively stepping back, then seeing, OK, well, how can you make it work to get something proper in pace? Yeah. Obviously, business is always a juggle of expenses. So, yeah, so it's a really good idea to work out what your priorities are and where, you know, your money's best spent. So often I work with clients and they're like, OK, well, I know I need this.
done and I know I need that done, but I can't afford this and that, where should I go first? If you can get a lawyer to guide you on the next best step to take in terms of investing in legals, that's always a really, really good idea. Yeah. Yeah. And that way you can be sure that you're going in the right direction and you're not spending money on things you don't need yet.
You know, there's no point to play investing in a trademark if you're not 100 % of your branding, for example. Yeah. Yeah. Yeah. And I think that that's what I really appreciate about you, that it's not just like, hey, what do you want? You know, 10 things. I think you need 10 things, but actually taking the time to understand the business, the business owner, where they are at and supporting them on the right steps of the journey.
Nina Huchthausen (52:26.733)
Because that also, to me, builds a lot more long term trust. Because at the end of the day, to me, what you create in a nutshell is you let me sleep at night. So I don't have to worry and always hope for the 23 degrees and sunshine. You know? Questions to work that. Yeah. Give you peace of mind knowing that if something does go wrong, if there is thunder and lightning, you've got
an umbrella and you've got a windshield and you've got, you know, you've got the right protections in place. So, yeah. Awesome. Cool. Well, Davina, thank you. Thank you so much for your time and this awesome conversation because as I said at the start, most people don't have this and also don't have the opportunity to ask all these questions. So I think this will go a really long way the more we can spread and send this out.
to people and hopefully give them a really good, safe start into their business journey so that their business can grow wholesome way. And my last analogy for the day, because my toddler is two and a half and we've been reading the big bad wolf a lot. Yes, I always think about you don't want to build a house of straw. Yeah. Take the time and build it with bricks. Yeah. Yeah. Then you can not just support your own family, but
you know, future generations. Exactly, exactly. Because if that's your dream, even if it's just very small and you're very scared, which is normal, I was shit scared first time. Yeah. But if it's your desire to build something sustainable and not just being blown away by the wind or some big bad wolf, because there are plenty out there. The things we spoke about, I think, can go a very long way.
to substantiate the foundations that you're building right now. Yeah. And I think just having good documents in place that are professionally drafted can really boost your confidence as well. So if you do have to, say, enforce a late fee or anything like that, you can point straight to your agreement, know with confidence what your rights are, and then go forward. And that's one of the best things about my job.
Nina Huchthausen (54:51.565)
especially, but men also start to feel a lot more confidence with their business. Yes. Amen. Because all you got to do, look, Cassis, you signed here. Versus sweating balls, how you're going to start the negotiation. Awesome. Thank you so much for your time, Davina. This was a really great conversation. I appreciate you a lot that you're supporting my tribe because it means a lot.
Now hopefully. Thank you so much for inviting me in. Yeah. Thank you, thank you. And you have a wonderful day. Bye. Bye, everyone.
