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The Plain English Project #1
The Case For American Entrepreneurship
This is the first of a regular series in which I will break down legal concepts in practical terms that anyone can understand. I hope entrepreneurs will walk away with an informed mindset that they can apply to everyday decisions of all sizes.
Here is a quick snapshot of a few future topics:
Make Me: Why You Don’t Have To Do Anything in America Until a Judge Says So
Taking The Hill: Why Possession is 9/10ths of the Law
A Time to Sue
A History of Handshake Business Deals
Simple Complexity: The Case for Plain English Contracts
CYOA: Choosing Your Own Adventure as an Entrepreneur
The Sentence Hospital1: Translating Legalese into Plain English
In many articles I will point out flaws in our legal system that could hinder business success. Some readers will be discouraged. For those downer moments, I’m starting with this Ted-Lasso-style first edition.
The Case for American Entrepreneurship
America is the best country to grow generational wealth through a small business.2
I’ve helped regular people build thriving businesses with nothing more than an idea and hard work. They are men and women of all races, many without powerful friends and armed with minimal capital. You can find other people like them in every town in America.
There is something about our business ecosystem that gives entrepreneurs a relatively high probability of success.3 Here are just a few examples of features in our system that promote successful businesses:
The Big One: An Army of Consumers
The US has 330 million consumers. Not just citizens, but consumers. We have money and we like to spend it…on ourselves, our kids and even our pets.
When I think about our market size I always think about top rugby players in Australia and NFL players. Patrick Mahomes’s 2022 salary is $45million.4 Michael Hooper, an equally-popular rugby player in Australia (where rugby is the most popular sport), gets an annual salary of $1.2million.5
My primary explanation for this huge divide is that the NFL has 330 million potential customers, while Australian rugby has 25 million. In fact, there are more people in the state of Texas that can watch a Dallas Cowboys game than all of Australia.
Whether you are running an NFL team or selling quilts on Etsy, your odds of success correlate to market size. America’s huge domestic market of enthusiastic consumers makes million-dollar revenues more achievable.
My Favorite: Freedom of Contract
The government does not interfere when people want to make a deal. While there are default rules written into laws, people can customize their own contracts if they wish. Giving people room to negotiate creative terms that work for them sets the bedrock for all American business. You can expect a lot more about creative contract terms in future articles.
Functioning Courts, Warts and All6
Despite their high cost and inefficiency, our courts do hold people accountable for breaking their agreements. The courts’ clunkiness also offers some indirect, positive effects. The mere threat of a lawsuit is often enough to keep people in line.
A second and less-obvious benefit: the high cost and hassle of courts give an edge to the best business minds. Courts are there for the most extreme and high-stakes disagreements. For lesser disputes, the best leaders move on, find creative solutions, or make decisions that others lack the stomach to make.
Bottom line: Our courts do their job, not perfectly, but well enough.
Air and Ground Support from Uncle Sam
The Small Business Administration supports entrepreneurs with loans, preferences in government contract bidding, and emergency funding when disaster strikes.
Also, the Federal Deposit Insurance Corporation insures individuals’ bank accounts. By giving individuals the confidence to keep money in banks, banks can lend more money at better interest rates.
I could go on, but I’ll stop here.
In future articles on more negative subjects, you may wonder why you are running your own business at all. Why don’t you work for someone else and let them deal with the flaky vendors and harassing lawsuits?
In those moments I hope you will come back to this article and realize that you’re an entrepreneur for two reasons: First, you have a business idea that excites you. Second, you are in the place where your odds of success are highest.
Even in a friendly environment, you must make thoughtful decisions to increase odds of success. The Plain English Project will lay out a roadmap for you to think through decisions.
Join the Plain English Project
If you would like to know when I post new articles, please subscribe.
I promise that the Plain English Project will not be another legal blog dissecting a topic to the point where there are no recognizable answers. I’m not here to confuse you until you submit to the pre-ordained conclusion to call me. I will not hide the ball. (If you feel that I do, let me know.)
ACKNOWLEDGMENTS: If you enjoyed this, give some love to Mike Woitach, Charlie Becker and Michael Sklar. They are all inspiring business thinkers and engaging writers. This article would not be the same without their guidance.
DISCLAIMER: THE PLAIN ENGLISH PROJECT IS FOR GENERAL INFORMATION ONLY. YOU SHOULD NOT CONSIDER ANYTHING HERE TO BE SPECIFIC LEGAL ADVICE. IT IS BEST TO DISCUSS YOUR PARTICULAR CIRCUMSTANCES WITH LEGAL COUNSEL BEFORE TAKING ANY ACTION THAT HAS LEGAL CONSEQUENCES.
I instantly concede this is a big statement that is impossible to support in a short article. Plenty of smarter people will disagree with me, like Forbes does. My simple measuring stick of whether a country is “good for business” is how often regular people start new businesses and become millionaires.
Emphasis on “relatively high probability,” because most new businesses still fail. It’s a jungle out there.
Rugbydome.com Article. If you read this you will notice that there is a salary cap on Australian rugby players. My position is that, even if they raised the salary cap by 10x, the most Hooper could make is still a small fraction of what Mahomes makes.