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“I have worked with a lot of startups and entrepreneurs, and I never get tired of learning about someone’s new idea.”


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Houston Barnes is an attorney and business strategy consultant, and is the founding member of The Barnes Law Firm, which serves the Triangle region of North Carolina and the state at large.

Houston has worked in a number of areas including consulting for a Fortune 500 company and serving as counsel for a number of start-up entrepreneurial and emerging growth businesses. . He excels at counseling clients on legal aspects as well as the business issues involved in starting and growing companies. His practice areas include corporate formation and startups, general business and corporate law, real estate, licensing and corporate partnering, franchise law, corporate counsel, and government relations in a diverse range of industries such as technology, healthcare, pharmaceuticals and medical devices, retail and small business, and franchise. Additionally, Barnes serves as a mentor in the entrepreneurial programs at the Kenan-Flagler Business School at the University of North Carolina – Chapel Hill and formerly the Poole College of Management at NC State University.

MO: What are some ways that you help entrepreneurs take their abstract ideas and transform them into viable and successful business models?

Houston: I have worked with a lot of startups and entrepreneurs, and I never get tired of learning about someone’s new idea., Turning that idea into a viable and successful business model can sometimes be a challenge, so the first thing I tell entrepreneurs is that during the transformation of their idea from plan to viable business, it is very likely that your ideas and vision are going to morph, and that’s ok. The successful entrepreneur is the one who is willing to let go of part of his vision in exchange for part of a new vision he might not have seen before.

One of the most important things that an entrepreneur can do is to build a network of mentors and advisors early on. If you have ever completely thrown yourself into something, you understand that it is very easy to quickly lose perspective, and you always need a fresh set of eyes to take a look for you, helping you with a reality check even. If those eyes can belong to an advisor or mentor that is an entrepreneur themselves, and someone who has success as well as failure in the startup world,, the new perspective they bring can be invaluable.

The last point I would make here involves the customer. So many startups think they know what the market wants. They attempt to build and, launch a company to meet customer needs, only to learn that what their customer really wanted was different than what they were offering. Talk to your customers early, and as soon as possible, discuss with them the services you plan to provide, or offer them a prototype of your product. You will be amazed at how much you can learn at this stage, and oftentimes how much your company will make changes toward great success.

MO: Where does your passion for entrepreneurship come from?

Houston: I come from a family of entrepreneurs. Most notably, my grandfather started as a car salesman in his youth. He eventually bought land and opened his own Chevrolet dealership in downtown Charlotte, N.C., and a few years later opened one of the first car dealerships in America for what was then a little known, and somewhat looked down upon, Japanese car company named Honda. By the time that he finally sold his dealerships in 2004, my grandfather was the largest and most successful Honda dealer in the Southeast, and one of the largest in the country. He taught me from a young age many valuable lessons about starting and growing a business. As a child in elementary school, I can remember starting small businesses on the playground, getting my classmates to buy things from me that they didn’t even know they wanted.

I always knew I wanted to work in business, and entrepreneurship seemed interesting, but it was not until my first job out of law school that I discovered my passion for it. One month after I passed the bar, I started working with a healthcare company that was raising seed funding and still in the proof of concept phase. While I was hired in part for my legal background, my primary role was on the business side of things. During my less than 5 years in that position, I helped take the company through multiple fundraising rounds and multiple regulatory clearances, and helped launched healthcare products around the world. By the time I left, the company was successfully operating as a stand-alone entity. During my tenure, while we had some great success, there were also instances of colossal failure and moments when the company threatened to collapse. That roller coaster is more than some people can handle, but for me it was the perfect fit.

Using my background in law and business, I now work with startups and entrepreneurs on a daily basis, and the thing that really keeps that passion alive is that I believe I learn more from my clients than I imagine they could possibly learn from me.

MO: What are some common mistakes you see your clients make that our readers can learn from?

Houston:  As seemingly self-serving as this answer may sound, entrepreneurs need to engage an attorney that works with startups and early stage companies. This should be one of their top priorities. It is never too early for a client to come to me. Not only is our first meeting free, but I have been known to walk the path and work with entrepreneurs for months before they ever engage my legal services.

The same can be said about a good accountant. Not only will professionals such as lawyers and accountants prevent you from making mistakes early on that can cost you in the long term, they are typically very well connected in the community. Additionally, if a lawyer or accountant works with startups, it is likely because they have a passion for that type of work and will be motivated to help you with your company and serve as a mentor.

MO: What are the first steps a start-up should take when defining their business model?

Houston: Entrepreneurs must keep it simple. No one wants to know your business model first; they want to know how you are going to make money. Once you answer that seemingly simple (though it could not be more complicated if you tried) question, you get away from the big picture answer, to a more nuanced one. This is where the business model comes in.

It is very rare that I see an early stage company that is doing something completely unique. Once a company can realize this, life becomes much easier. Business models come in various shapes and sizes, but the likelihood is extremely high that there is a company currently utilizing a business model that would be a perfect model for what you want to do. I believe that there is no reason to reinvent the wheel. I encourage companies to find someone who has previously been successful so that rather than repeating their mistakes, they can learn from them and see possibilities for improvement. When we strengthen weak areas of historically successful models, this allows us to no longer follow the leader, but to become the leader.

MO: What are some great resources and tools for entrepreneurs that you feel are underused, misunderstood or not well publicized?

Houston: I think right now is as exciting a time as there has ever been for starting a business. There are so many resources for entrepreneurs, including organizations set up explicitly to help entrepreneurs. Additionally, there are so many people who want to help startups, some because it is their passion and some because they realize that joining up with a startup may pay off financially in the future. To these ends, wherever you live, connect with your entrepreneurial community. Not only will there be valuable resources, but entrepreneurs are a really fun bunch to hang out with.

The other thing I would mention is good, old-fashioned books. We spend so much time on the internet, sometimes forgetting that some of what is up there could have been posted without much thought. Books usually have been put together over a greater amount of time and with greater thought and scrutiny, and I find that your return on investment from reading a book is much higher than anything you can get online. There are great books on entrepreneurship, but if I were telling someone where to start, I would tell them to read a few books on sales. When you start a business, no matter what field you are in and whether you realize it or not, you are about to become a salesman. Sales knowledge is timeless. For example, I am currently reading a book on sales published in 1988, and in my opinion, the information inside is more relevant than 95 percent of what has been published in the last year.

MO: What advice would you give to someone who is considering purchasing a franchise?

Houston: I tell anyone I know who is interested in purchasing a franchise to talk to other franchise owners of the brand. Unless you are the first one to buy a particular franchise, there are going to be many owners of the same franchise that you can reach out to. In my experience, you will likely talk with some people that think the franchise is the greatest franchise ever, and you will likely talk to some owners who think it is the worst. People have different opinions based on their different experiences. If possible, find out all you can about what influenced their views and feelings. This will help you determine if a particular franchise will be a good fit for you and your business goals.

When looking at a franchise, the parent company is required to give you a Franchise Disclosure Document (FDD). This document can give you great basic information, but you should never let this document be the end point of your investigation. I recommend having a lawyer experienced in franchises look over your FDD since he or she will know the red flags to look for.

Finally, expect to hear some variation of this line from the franchise parent company when they give you the FDD and the contract: “This is our standard contract, which all of our franchisees sign. Take a look and let us know if you want to move forward. There is nothing in here that we have the power to negotiate.” The truth is that while that probably is their standard contract, there are things that not only can, but should be negotiated in every franchise contract.


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