I love Shark Tank. And while it’s not a good fit for my business, every time I watch I learn a new lesson.

One of the consistent Shark Tank themes is what you need to have in place before your business makes it big. And that’s because week after week, the Sharks harp on the same things:

• how many sales a business has made (and in what time period)
• if the business has secured their intellectual property
• what the business’ profit margin is
• if they have the foundation to scale their business

You, like me, are probably a terrible fit for Shark Tank. But that doesn’t mean you don’t have a dream press outlet. That major press publication that you wish and hope will feature your business. But before you start putting your PR machine in motion, it’s important that your business foundations are secure.

Remember the Oprah effect? The Oprah effect is businesses that Oprah featured, but went out of business a few month’s later. We don’t want that to happen to you.

So, the goal is that when you land that dream press, you’ll be able to thrive and grow. Not have it quickly put you out of business.

So what do you need?

• proper licenses and permits obtained
• business liability insurance purchased
• intellectual property buttoned up
• to know how much it costs to create your product/service
• systems in place so you can scale quickly
• website ducks in a row
• contracts to hand over
• EIN number

#1 Licenses and permits

Your first stop in securing your business foundations is to make sure you have all the licenses and permits you need. When you are small, you might not think you need any licenses and permits. But in most places, just by running a business you need a business license. You also might need a:

• seller’s permit
• home occupancy license
• fire permit

Based on your location and the type of business you are running, your requirements will vary. A good place to point you in the right direction is this directory from the Small Business Association.

Additionally, many city and county websites have a section dedicated to small business owners. And this section usually explains what you need to do to run a legit business within their borders.

So your first step will be obtaining all the licenses and permits your business needs now. But, I’m also going to encourage you to create a list of licenses and permits you’ll need as soon as you bring on help. For example, here in California when you do all your apparel sewing production yourself, you don’t need a license. But as soon as you bring on help, you need a Garment Registration Certificate from the state.

• Action Item #1: Obtain all the licenses and permits you need now and make a list of those you’ll need if you have to scale quickly.

#2 Business liability insurance

Your next task will be to obtain business liability insurance. Business liability insurance protects you when:

• someone claims your product infringes hers
• someone claims your business name infringes hers
• your product hurts them
• you can’t deliver your products on time
• your equipment is stolen
• a potential wholesale client slips and falls in your production facility
• you host a workshop and someone gets injured

Plus for the time being, while you work from home, it protects everything you need to run your business.

• Action Item #2: Get a quote for business liability insurance.

#3 Securing your intellectual property

This one has two parts:

• protecting your stuff
• making sure you don’t infringe on others

Protecting your stuff

On Shark Tank, the Sharks always want to know what patents the business in the tank has. While you likely don’t qualify for a patent, you do have valuable intellectual property: your copyrights and trademarks.

Copyrights protect your creative endeavors. (You can read here was is and isn’t protected by copyright.) And enforcement of your copyrights often hinges on if your copyrights are registered or not. Don’t know how to register your copyrights? Here’s my step-by-step process.

While trademarks, protect your business name, logo, and tagline. Trademark registration isn’t required to enforce your trademark. But once you’ve got some money in the bank, registering your trademark is a wise idea.

Not infringing on others

A lot of creative businesses don’t think about doing a trademark search of their business, product, or service names. Either because they:

• don’t know it is important
• think it’s only for big companies
• think no one will find out

But as soon as your press kicks in, you’re SOL if you’ve got an infringing name. So, your first step is to do a detailed trademark search on all of your names.

But as soon as your press kicks in, you’re SOL if you’ve got an infringing name.

You also need to make sure that your products aren’t infringing on other’s copyrights. So, you should re-think any products that:

• trace source imagery
• incorporate other’s work
• are super inspired by someone else’s product

Because all of these things could result in a nasty lawyer letter.

• Action Item #3: Start registering your copyrights and do a detailed trademark search for your business name.

#4 Not pricing for profit

Point blank: some businesses that succumb to the Oprah effect failed because they didn’t know how much it actually costs to create their product. This isn’t my specialty. But these ladies are awesome at pricing:

• Megan Auman
• Tara Gentile
• Lela Barker

So, you should nail down how much it costs you to create your product and price accordingly. And as the Sharks always want to know, figure out how your pricing will change when you scale production.

• Action Item #4: Figure out exactly what it costs to create your products and adjust pricing if necessary.

#5 Systems

When you work alone, having systems might seem silly. But as soon as you have to start training someone to do tasks in your business, systems will be your BFF.

They’ll make sure that things get done how you want them. They’ll allow you to focus on the tasks you really love. And they’ll give your staff guidance, boundaries, and exceptions, which is a great way to make you a good boss.

As soon as you have to start training someone to do tasks in your business, systems will be your BFF.

How I established my systems was by setting aside time each week to document them. It took twice as long to do a particular task because I was doing it and documenting it. But now, I’ve got processes for how everything happens.

Creating business systems is an on-going process. You’ll get it squared away and then you’ll switch up how you do things or change your strategy. So you should set aside time to review and update them regularly.

Recently, I learned this lesson the hard way when I brought on a new VA to help with the blog. And I realized that I hadn’t updated my blogging and social media systems since I switched over to CoSchedule. We’ve made it work, but I wished I had updated them before she joined the team.

• Action Item #5: Block off 1 hour a week to start recording the systems in your business, starting with the tasks you would off-load first.

#6 Website ducks in a row

You are collecting data on your website visitors. Either when they:

• make a purchase
• sign up for your newsletter list
• browse your site and Google Analytics tracks them

And because of that, you’ll need a privacy policy.

You’ll probably also want to create shop policies or policies with your wholesalers. And if you want to enforce your policies, you need to make sure they are technically contracts.

• Action Item #6: Write a privacy policy for your website.

#7 Contracts

Contracts get a bad rap. But contracts don’t have to be long, legalese-stuffed documents. A contract only needs to have three things:

• offer
• acceptance of the exact offer
• exchange of things of value

Which means your contract can be as simple as:

• shop policies on your website
• a box that must be checked agreeing to your policies before checkout can happen

You don’t have to overcomplicate these. Contracts are just there to establish boundaries and expectations of what is and isn’t acceptable. To explain to your visitors what goes on behind the scenes. And they’ll protect you when someone gets out of line.

Contracts are just there to establish boundaries and expectations of what is and isn’t acceptable.

• Action Item #7: Create shop policies and start getting purchasers to agree to them via an “I agree” checkbox.

#8 Get an EIN number

What you might not know is that even though you don’t have employees you can get an employer identification number (EIN) from the IRS.

And once your press kicks in, having an EIN number will make your business look legit.

And it only takes about five minutes to order one of these numbers from the IRS.

Then once you have this number, use it on your:

• business licenses and permits
• PayPal, Stripe, and other banking accounts
• all W-9 forms

And anywhere else that asks you for a tax ID for your business.

• Action Item #8: Order an EIN number and start using it!

Neither of our businesses probably will be on Shark Tank, but both of us do hope for press and to grow our businesses. So, block off some time to tackle these eight action items over the next couple months. So that when your dream press outlet features you, you’ll have everything, you need to scale up and meet the demand for your products or services.

Which one of these business foundations tasks will you tackle first? Or do you have them all already squared away? Let me know in the comments.