You are listening to an episode of Ask the Experts on Talk 860 WWDB AM with host Steve O and weekly guest, LGBTQ legal expert Angela Giampolo.
What You Need to Know When Starting a Business: Part 1
Angela and Steve talk about the legal pitfalls of starting your own business.
In this episode Angela discusses the things that every entrepreneur needs to know and be prepared for, such as, why starting a business can be different for the LGBTQ community, the questions any new business owner should be asking a lawyer, the importance of proper capitalization, and more!
How do you prepare to meet with a lawyer about starting your business?
Write down any and all questions that you have. They will also differ based on the type of business that you’re forming. Is it a professional service business? Is it a brick-and-mortar? Is it an online business? Are you currently working? Are you new to the workforce? Do you have a family? Are you married? Will you need employees right away or can you wait on that? Is there going to be a lease if it’s brick-and-mortar, will you be leasing? Will you own the building? Is it a franchise? These are all types of questions that I don’t know you have until you bring that to me.
I tend to ask a lot of questions, too. So I always tell people, sometimes you don’t even know what you don’t know, and so you don’t know what to ask me. So a lot of times, if you were to email me right now and want to set up a consultation around this, people will say, what do I need in order to be prepared for the meeting? And I say absolutely nothing. Bring yourself and we’ll have a conversation. And through this conversation, I end up pulling out of you the information that I need. Rarely do people show up with a list of the nine most important questions and they’re ready to rock and roll.
What is a common reason businesses go under?
Undercapitalization. You should know far in advance that you want to start the business. And again, depending on what type of business it is, it’s going to require different levels of capitalization. If you go back to radio show host consulting, other than advertising and getting the word out there that you are now providing this service, you can continue to sit right there, declare that you’re doing this thing, and then that’s it. No capitalization requirement is needed.
However, one of the famous cases you read about in law school is an entire taxi fleet of Manhattan taxis. Back when there were only taxis and they had no capitalization, no money in the bank account, the business bank account. They spent everything on the fleet of taxis. And then their first car accident and someone died inside the taxi. And then they sued for wrongful death, and there was no money whatsoever. And they weren’t insured. That’s what it was. They didn’t have proper insurance and they were under-capitalized. And so, as a human doing business with a taxi, I have the right, as a consumer in the world to assume that you are properly insured to do what you do and that your property capitalized. So that as I get into the vehicle, I feel safe in doing so. So now, the business standards are if you don’t do those normal things like get the right insurance and be properly capitalized, your personal assets can be at risk. Even if you have an LLC.
What is the most common question you receive?
What entity type should I choose? Definitely the number one question. Should I be an LLC? Should I be a corporation? Philadelphia, more so than most cities right now, has a ton of real estate development. And so a lot of my businesses that I’m forming are around real estate investment or development, contracting, flipping, buying, and holding. And so I do a lot of real estate/business combinations. There are a lot of questions around entity choice or entity type there. The answer to that question is not an easy one to vaguely give on the radio, but it really depends on what it is that you’re doing. Do you even need an entity at all? Can you just be a sole proprietor? If you said right now, Steve, I am going to form a business today providing services to radio hosts, I’m going to consult with radio hosts and provide a course. And you’re a business owner. The minute you said that right? And I could write you a check to your name Steve in the memo. Radio host consulting. And you’re in business. No LLC, no corp. You’re completely exposed as the human you Steve. I’m writing checks to you.
What are the differences between starting a business for those in the LGBTQ+ community and those not?
So folks within the LGBTQ community tend to statistically be entrepreneurs at a higher rate because they are discriminated against at work or may not feel comfortable being out at work and fear being discriminated at work. It’s not that starting a business is in and of itself different for the LGBTQ community. It’s just that we tend to do it more often, especially trans folks, people that get discriminated against at work, or if they live in a small town and they don’t feel comfortable being out at work, it’s easier to just go and form your own business and give yourself a job.
From the start of the business itself, it’s not any different than anyone else starting a business. My thoughts on seeking out a lawyer to help you with whether they are gay, straight what have you is to get one. Because a lot of people, if they’re going to start their own entrepreneurial venture and especially if they are currently working full time and they’re going to stop that in order to start this, entrepreneurial venture where they won’t be making nearly what they made when they worked full time.
They tend to view the startup process as let me spend as little as possible, because it’s a brand new venture, I don’t know if it will succeed. So what I caution people against is you wouldn’t build your home on Quicksand, right? So every home has a foundation. And it doesn’t matter what your budget is for the home. The foundation is always the same. There’s no way to skimp on a foundation, right, unless you’re building your house on Quicksand. You lay a cement foundation, and I would counsel everyone to do the same with the startup of their business. Could you file with your state and only pay the filing fee of $125 in Pennsylvania and in Florida? Yeah, you could absolutely do that on your own. Will you check every box off properly? Likely not. Will you obtain the EIN the right way? Likely not. And so then that only becomes a problem if there’s a problem down the road. But if there’s a problem down the road, it’s going to be so much more costly to fix. We’re talking in the five figures to fix something on the foundational level if there’s litigation or problem down the road. So get a lawyer.
What are the effects of Attorneys “shingling” LGBTQ+ legal work?
I feel like people within the LGBTQ community can smell the difference right away. And then there are people that may not do it to the extent that I do, but at least they’re putting that shingle out to let the community know that they’re an ally, which is fine for me. It’s the people that, like you said, that are literally just doing it from a business perspective that are trying to cater to a demographic that the generalizations say have more disposable income. But if they’re just wanting to let the world know that they’re an ally, that’s wonderful, but for a lot of folks that’s not the altruistic reason they’re doing it. Look at Pride Month now. It’s like corporations have taken over Pride Month, and every massive corporation has to have a rainbow on its logo that particular month, from Google to every hotel to you name it. Homo Depot, as we like to call it.
It bothers a lot of people within the LGBTQ community because they’re just doing it to appeal to Goodwill in that particular month. But there’s literally no other money where their mouth is, and they spend a bajillion dollars on these Pride campaigns. But it’s walking the walk, not talking the talk. And in June, everybody’s talking, but the other eleven months of the year, nobody is talking or walking. From a corporate standpoint, the community can sense authenticity when there’s an entity marketing to them.
Episode Transcript
[00:01:01.090] – Speaker 1
Hey. Good morning, Philadelphia. And welcome to another Ask the Experts, where we bring you Philadelphia’s finest experts in the field of legal, health, financial, and home improvement. We have another blockbuster day today. We have, of course, our starting show each week. See, I can see her. She’s smiling. I guess you’re in Arizona, is that right?
[00:01:29.420] – Speaker 3
I am.
[00:01:38.110] – Speaker 1
Let me welcome you to our long-standing expert, Angela Giampolo. And every week we talk about different areas that Angela handles. And today we’re kind of doing kind of a new area, and I think it could be probably one of the best areas to cover. We’re going to be talking about starting a business. And Angela, one of the areas she covers is employment law. And there are so many people who are tired of working for somebody else who want to start their own business. But, folks, let me tell you something. You do not want to start a business on your own without having someone like Angela, who is an employment lawyer. And we’re going to discuss that today. Good morning, Ms. Angela.
[00:02:38.310] – Speaker 3
Good morning, Steve. Good to see you back.
[00:02:41.730] – Speaker 1
Yes. I got to tell you, once you get COVID, I’ve had COVID twice. It’s like when you’re in an automobile accident, that car is they can fix it and everything. It’s never the same anymore. So I’m not going to get into it. But anyway, I’m glad you’re healthy. The show is healthy. And I just want to just mention we are opening up in New York City next month, which we’re so excited about. We just had so many calls, but you can hear it. Our show in New York, also in Philadelphia on Saturdays from three to four. Angela, we’ve been away for a couple of weeks. I want to remind everybody about who you are and about your incredible law firm.
[00:03:34.470] – Speaker 3
Sure. So, Angela Giampolo, licensed in Pennsylvania, New Jersey, and any day now, Arizona as well. So I opened up my practice back in 2008 now. Wow. And the idea that there were no lawyers geared toward the LGBTQ community for all of our legal needs that have nothing to do with the fact that we’re gay. We open businesses like we’re going to talk about today. We own real estate, we slip and fall, we go bankrupt, as well as need transgender name changes or are discriminated against or have issues around marriage equality. But I wanted to serve the LGBTQ community for all of their legal needs to be a one-stop shop. So that’s where the idea of Giampolo, a law group was born. And then knowing that especially back in 2008 and even more so now, there’s gay law and straight law and being Canadian originally, I had no idea to what extent, being LGBTQ in this country, especially pre-marriage equality, how it impacted every area of law, including business, which we’re going to talk about today. So a married couple, if they were in business together, would look a lot different than if they weren’t.
[00:04:59.960] – Speaker 3
And a lot of my clients, pre-marriage equality, were in business together, but couldn’t get legally married. And so what happens there? So then Philly Gay lawyer, as a sort of advocacy arm to my law firm, was born to sort of fight those advocacy fights while Giampolo law group did the legal work. So that was back in 2008 and expanding now nationally. So taking what I’ve done in Philadelphia and taking that all over the country, and first and foremost, in December, I’ll have a virtual summit geared towards lawyers all over the country to educate them on a state of the union of all things LGBTQ law. And then immediately after the virtual summit, the Caravan of Hope will take its maiden voyage cross-country. So I’ve done things locally, but I’ve never actually driven the caravan across the country. So December 11 through the 30th, right up until New Year’s, over Christmas, and the whole month of December, I’ll be taking the Caravan of Hope to rural and underserved areas, providing legal services.
[00:06:15.270] – Speaker 1
Angela is a little bit humble. What she kind of left out is her whole professional life has been going up against Goliath. I think that’s the best way to put it, and helping others. She is like a bulldog.
[00:06:50.290] – Speaker 1
But Angela has always been a fighter out there. And I got to tell you, you talk about going into Arizona. What she hasn’t told you is she’s going into the mouth of the beast when she goes into the southern part and the Midwest part of the United States. And I just want to say this, I’ve said it before, we are in markets around the country and I work with all types of lawyers. And what I’m noticing, and it’s a business move, strictly a business move, where Angela, this is dear to her heart, big difference is a lot of attorneys now are starting to put on their shingles. So to say that they specialize in LGBTQ law and it’s not really true, I got to tell you that.
[00:07:49.510] – Speaker 3
Right. And I feel like people within the LGBTQ community can smell the difference right away. And then there are people that may not do it to the extent that I do, but at least they’re putting that shingle out to let the community know that they’re an ally, which is fine for me. It’s the people that, like you said, that are literally just doing it from a business perspective that are trying to cater to a demographic that the generalizations say have more disposable income. But if they’re just wanting to let the world know that they’re an ally, that’s wonderful. But a lot of folks that’s not sort of the altruistic reason they’re doing it. And the LGBTQ community is used to that in a lot of different professional services or services generally. Look at Pride Month now. It’s like corporations have taken over Pride Month, and every massive corporation has to have a rainbow on its logo that particular month, from Google to every hotel to you name it. Homo Depot, as we like to call it.
[00:09:04.080] – Speaker 1
Does that bother you Angela?
[00:09:05.500] – Speaker 3
Yeah, it bothers a lot of people within the LGBTQ community because they’re just doing it to appeal to Goodwill in that particular month. But there’s literally no other money where their mouth is, and they spend a bajillion dollars on these Pride campaigns. But it’s walking the walk, not talking the talk. And in June, everybody’s talking. But the other nine months I’m sorry, I went to law school because I don’t do math, but the other eleven months of the year, nobody is talking or walking. From a corporate standpoint, that goes for lawyers, it goes for Home Depot, that the community can sense authenticity when there’s an entity marketing to them.
[00:10:02.670] – Speaker 1
Angela not only do you do employment law, but you handle family law, estate planning law. And we’ve actually talked in those areas of business law, real estate law. Today we’re talking about business law. And we’re going to be talking about starting up a business. And you need somebody professional to help you. Because I’m going to tell you something. There are a lot of areas that you can step into that you wish you would have had. Someone like Angela. And that’s what we’re going to be talking about today, which I think this is our first show that we’ve talked about, actually, about starting a business. And Angela so you see people who are in the LGBTQ community starting up a business. How is that different than just starting up a business?
[00:11:12.070] – Speaker 3
Sure. So folks within the LGBTQ community tend to statistically be entrepreneurs at a higher rate because they are discriminated against at work or may not feel comfortable being out at work and fear being discriminated at work. So over the last several decades, the stats show that LGBTQ folks tend to go out and start their own businesses more often statistically for those reasons. So it’s not that starting a business is in and of itself different for the LGBTQ community. It’s just that we tend to do it more often, especially trans folks, people that get discriminated against at work, or if they live in a small town and they don’t feel comfortable being out at work, it’s easier to just go and form your own business and give yourself a job. So there’s that. And from the start of the business itself, it’s not any different than anyone else starting a business. And my thoughts on that are to your point about seeking out a lawyer to help you with this gay, straight what have you. Because a lot of people, when they are bootstrapping a business if they’re going to start their own entrepreneurial venture and especially if they are currently working full time and they’re going to stop that in order to start this, entrepreneurial venture where they won’t be making nearly what they made when they worked full time.
[00:12:59.470] – Speaker 3
They tend to view the startup process as let me do this as lean as possible, let me spend as little as possible. Because it’s a brand new venture, I don’t know if it will succeed. I’m going from making $120,000 a year to zero, or even $50,000 to zero. Right. So what I caution people against, though, is you wouldn’t build your home on Quicksand, right? So every home has a foundation. And it doesn’t matter what your budget is for the home. The foundation is always the same. There’s no way to skimp on a foundation, right, unless you’re building your house on Quicksand. So whether you’re going to have stucco on the outside versus beautiful brick and all the things above, the foundation you have choices on. But you lay a cement foundation, and I would counsel everyone to do the same with the startup of their business. Okay, in terms of yes, could you file with your state and only pay the filing fee of $125 in Pennsylvania and in Florida? Yeah, you could absolutely do that on your own. Will you check every box off properly? Likely not. Will you obtain the EIN the right way?
[00:14:25.690] – Speaker 3
Likely not. And so then that only becomes a problem if there’s a problem down the road. But if there’s a problem down the road, it’s going to be so much more costly to fix. We’re talking in the five figures to fix something on the foundational level if there’s litigation or problem down the road. So get a lawyer.
[00:14:48.480] – Speaker 1
Yes. No, it’s extremely important. I got it to say. You’ve been a very successful professional in your law practice. You also do real estate, and it’s nice when someone is trying to steer you in the right direction that they are successful themselves. So you’re really a good teacher when it comes to that. What is the first thing I guess it’s so important that when they come in to see you, they write all their questions down,.
[00:15:26.680] – Speaker 3
Absolutely any and all questions that you have. They will also differ based on the type of business that you’re forming. Right. Is it a professional service business? Is it a brick-and-mortar? Is it an online business? Are you currently working? Are you new to the workforce? Do you have a family? Are you married? Will you need employees right away or can you wait on that? Is there going to be a lease if it’s brick-and-mortar, will you be leasing? Will you own the building? Is it a franchise? Right? These are all types of questions that I don’t know you have until you bring that to me. Right. So I’m working with a lesbian couple. I’m doing their estate planning. They dipped into their 401K. There’s a special franchise 401K transaction that you can make where at no cost or no fees and no penalties, you can use your four hundred and one K to fund a franchise and you have X amount of years to put it back or what have you. So I wouldn’t know those types of things unless you bring them to my attention at the outset.
[00:16:50.280] – Speaker 3
But I tend to ask a lot of questions, too. So I always tell people, sometimes you don’t even know what you don’t know, and so you don’t know what to ask me. So a lot of times, if you were to email me right now and want to set up a consultation around this, people will say, what do I need in order to be prepared for the meeting? And I say absolutely nothing. Bring yourself and we’ll have a conversation. And through this conversation, I end up pulling out of you the information that I need. Rarely do people show up with a list of the nine most important questions and they’re ready to rock and roll.
[00:17:28.040] – Speaker 1
Well, we’re going to try to get at least seven of them today. Angela, give everybody your phone number.
[00:17:35.090] – Speaker 3
You can give me a call at 215-645-2415 and email me at angela@GiampoloLaw and the website is GiampoloLaw.com
[00:17:45.990] – Speaker 1
We’re going to go to Break. We’re here with attorney Angela Giampolo. We’re talking about the LGBTQ community law, we’re talking business law today, and starting a business. We’re going to go to Break. We’ll be right back with more as the experts.
[00:19:24.870] – Speaker 1
And we are back. We’re here with attorney Angela Giampolo. We’re talking business law today. She works with the LGBTQ community. But I want to tell you something. I’m not gay. And I just want to say that if I were in the Philadelphia area, and I mean this truly, and I needed an attorney, whether it was in real estate law, business law, family law, or employment law, there is no one else that I would want representing me but Angela. So you don’t have to be part of the LGBTQ community. She’s just a fine attorney that really cares. And if this is an endorsement, then it’s an endorsement. Stop smiling.
[00:20:22.970] – Speaker 3
I have you on retainer to say nice things.
[00:20:24.570] – Speaker 1
Checks in the mail. But no. Every week I learn more about you. And it’s a shame there’s not 50 of you, except we still have 50 states that there’s not 50 of you because you can train somebody. But it’s not the same. What we’re doing today is, and I promise you we’re going to definitely continue this next week, we’re talking about starting a business, and you do not want to take this on yourself. You want to give yourself, I have to say, a fighting chance. It’s tough out there. What is the number one question everybody asks you when they come to your office to talk to you about starting a business?
[00:21:17.930] – Speaker 3
What entity type should I choose? Definitely the number one question. Should I be an LLC? Should I be a corporation? Philadelphia, more so than most cities right now, has a ton of real estate development. And so a lot of my businesses that I’m forming are around real estate investment or development, contracting, flipping, buying, and holding. And so I do a lot of real estate/business combinations. And there are a lot of questions around entity choice or entity type there. The answer to that question is not an easy one to vaguely give on the radio, but it really depends on what it is that you’re doing. Do you even need an entity at all? Can you just be a sole proprietor? Right. If you said right now, Steve, I am going to form a business today providing services to radio hosts, I’m going to consult with radio hosts and provide a course. And you’re a business owner. The minute you said that right? And I could write you a check to your name Steve in the memo. Radio host consulting. Right. And you’re in business. No LLC, no corp. You’re completely exposed as the human you Steve. I’m writing checks to you.
[00:22:58.590] – Speaker 3
You’re doing business as Steve. As a sole proprietor. And so that’s like, first and foremost. And there are millions of those types of sole proprietor businesses, even if you have a hobby-type thing on Etsy. Right. And you sell. I bought a bunch of fun keychains for $25 at say, like, hope. Happy, worthy, fabulous, fun, amazing. So a whole bunch of keychains and to give us gifts. If that person makes more than $600 a year selling those keychains, it’s no longer considered hobby money. It’s considered work money. Like they have a job making key chains and selling keychains, but they probably don’t have an LLC for that. So what entity type should I use? Do I even need an entity? And is there maybe a combination of entities? I have a for-profit nonprofit combination joint venture between my for-profit and my nonprofit and where I can take deductions and who takes in donations and what generates revenue? What doesn’t? So there are a lot of fun things that you can do, but based on what business you’re creating, we would figure that out together.
[00:24:18.290] – Speaker 1
It’s pretty amazing. With Angela, you get something a little bit extra. And what I mean by that is she comes up with the most amazing slogans. So not only do you have her professional as a lawyer, but she’s so creative. Angela do you find a lot of people who want to start a business are not really capitalized? Because that’s the reason a lot of businesses go under is under capitalization.
[00:24:50.910] – Speaker 3
Absolutely. You should know far in advance that you want to start the business. And again, depending on what type of business it is, it’s going to require different levels of capitalization. Right. If it’s you again to go back to radio show host consulting, other than advertising and getting the word out there that you are now providing this service, you can continue to sit right there, declare that you’re doing this thing, and then that’s it. Right. No capitalization requirement is needed. However, one of the famous cases you read about in law school is an entire taxi fleet of Manhattan taxis. Back when there were only taxis and they had no capitalization, no money in the bank account, the business bank account. They spent everything on the fleet of taxis. And then their first car accident and someone died inside the taxi. And then they sued for wrongful death, and there was no money whatsoever. And they weren’t insured. That’s what it was. They didn’t have proper insurance and they were under-capitalized. And so, as a human doing business with a taxi inhaling it, I have the right, as a consumer in the world to assume that you are properly insured to do what you do and that your property capitalized.
[00:26:21.810] – Speaker 3
So that as I get into the vehicle, I feel safe in doing so. And so those are business standard norms that we’ve created so that people can don’t have to ask, excuse me, taxi, are you properly insured? Is your company properly capitalized right before getting in? So that particular taxi was sued, and the owners, they were able to pierce the corporate veil and go right to the owner’s assets and get the money that the human deserved. Now, the standard is if you don’t do those normal things like get the right insurance and be properly capitalized, your personal assets can be at risk. Even if you have an LLC.
[00:27:09.810] – Speaker 1
There’s so much to know about open. It’s not just if you’re good at something, you’re going to be successful. You got to protect yourself. And there are so many things that you have not even thought about. When you go sit down with Angela, she’s going to bring up things that you’re going to go, I never even thought of that. So you’re going to be well prepared to go out on the battlefield.
[00:27:35.630] – Speaker 3
And one more thing before we go. I know we have one more minute and then we can save all the other questions for next week. But to your point about it’s not just enough to be good at something, I would also recommend that everyone thinking about opening a business. Read The E-myth book, Entrepreneurial myth, and it talks a lot about people that are amazing at something. Like the baker, right? Opening up a bakery. Just because she’s amazing at baking, it doesn’t mean just because you’re good at something that you’re going to be a good entrepreneur. And if you’re not a good entrepreneur, then that doesn’t mean don’t open up a business, but be sure to hire people around you that are good at that entrepreneurial. So in addition to legal services, I make my clients read.
[00:28:25.680] – Speaker 1
Good for you. Well, you’re right. We come to the end of another show. This show could go on for 3 hours easy. Angela, give everybody your phone number, all your social media ways that people can get a hold of you.
[00:28:40.170] – Speaker 3
Sure. 215-645-2415. And my website is GiampoloLaw.com and you can email me at [email protected].
[00:28:51.450] – Speaker 1
Angela will be back with us. Thank God. She’ll be back with us again next week. You’re going to be in Arizona next week.
[00:28:59.130] – Speaker 3
I will, yes.