I don’t know how it started and what organization grants, organizes, and keeps tracks of all of the National or International Days, but as a small business owner, I love the fact that March 29, 2023 is National Mom and Pop Business Owners Day.
I love a mom and pop. I grew up in a neighborhood in the Bronx that was full of mom and pops instead of a big box stores and chain restaurants. Mom and Pop is the colloquial term that describes a small, independent (and often family-owned) business. These restaurants, grocery stores, bookshops, pharmacies, or other retail operations often operate in a single location, serving customers within their local community.[1] They are the lifeblood of many communities.
Although family-owned and managed, mom and pops have the same concerns and responsibilities that other small businesses that operate more broadly may have. However, due to their size, the fact that the owners and employees are family (or like family) and because their main focus is providing the best service to their local community and making enough money to stay in business, they often overlook the other parts of operating a business including the importance of having legally binding contracts.
But, just like any other small business, mom and pop shops can greatly benefit from contracts. Some of the benefits include:
1. Protection of the Business Interests and Assets
Just like any small business, mom and pops will likely have intellectual property that’s worthy of protection and which gives them a business advantage over their competitors. Therefore, contracts with vendors, contractors, and employees are critical to protecting those assets.
Often, hiring is made when the business is desperate for help for the daily operations. But whether your mom and pop needs to hire a full or part-time employee to work in the business or a contractor for a specific project (e.g. graphic artist to create flyers or a branding expert to create a website), you absolutely should move forward only after an employment agreement, contractor agreement, or non-disclosure agreement is signed.
2. Establish Clear Expectations & Avoid Misunderstandings
Even family should take the time, preferably at the very start of a new venture, to discuss AND write down their expectations around how the business will operate, how business decisions will be made, who’s in charge of what, how finances will be managed, and how disputes should be handled, to name a few.
Assume nothing, create a space for open dialogue, and create an agreement that everyone can live by. The very process of drafting an agreement will likely help you understand if going into business with family or friends is right for you. A partnership agreement (or an operating agreement if an LLC is the best option for your business) is a must and can help to prevent disputes, family breakdown, and costly litigation.
3. Enhanced Credibility and Professionalism
When a business has a written agreement in place, it shows that they are serious about their commitments and that they are willing to put their promises in writing. This can help to build trust with suppliers and confidence with clients which can lead to more business opportunities in the future. Service agreements or Purchase Agreements with your clients would outline the scope of work, delivery schedules, payment terms, how to end the agreement, etc.
You may never have aspirations of growing your mom and pop to the next Whole Foods, Walmart, Soul Cycle, Starbucks, Nike, or Yankee Candle (all of which had humble beginnings). I don’t. But even mom and pops should take care to operate their business so that it grows and thrives, instead of just surviving. That means shoring up business operations and legally protecting the shop.
At MC Law we help small businesses establish clarity, protect their IP, and present a professional image to their clients and suppliers. Feel free to reach out to us for a consultation to get started on protecting your mom and pop.