We outline how to limit risk and keep your business running smoothly
Starting your own business is as exciting as it is hard. As an entrepreneur, you are often wearing multiple hats to make sure that your business is a success, and no matter the role you play, you are not immune from legal requirements. It is a small business owner’s responsibility to do all that you can to limit risk while still making sure that your organization still operates flawlessly. Fortunately, there are actions you can take now to protect your company for all that is ahead.
1. Know Your Basic Business Laws
It is important to keep yourself armed with at least a baseline understanding of business laws. Because these can vary depending on the type of business you are running and where it is located, start by learning from the U.S. Small Business Administration website. This includes information on financial law, employment and labor law, intellectual property and marketing and advertising law. Gaining a basic understanding of these key areas can help you better protect your business and its employees over the long term.
2. Hire an Exceptional Attorney
Having a standby legal contact is important for any new business, as it provides opportunities to seek advice should any legal action be taken. Seek an attorney that is familiar with your local laws and processes, as well as one with expertise in the subjects that matter most to your business. You may anticipate legal issues from the IRS or from your state’s department of taxation, for instance, and will require support that can address those specific challenges.
3. Get Insured
Obtaining liability insurance and errors and omissions coverage can protect your business from certain types of customer injuries or if a customer accuses you of not living up to an agreed-upon contract. Beyond obtaining the right type of insurance coverage, it is important to build protection into your contracts through noting you are not liable for incomplete work due to actions outside of your control.
4. Separate Your Personal Assets
When you are a small business owner, the lines between your work and personal life can feel blurred. When it comes to protecting your finances, however, it is important to do all that you can to safeguard your personal assets from a potential lawsuit involving your business. One way to limit the possibility of your assets becoming the target of a lawsuit: Establish a trust to own the business. This will ensure that only the assets in the trust are liable, should any legal action be taken.
5. Secure Your Work
Cybersecurity may not be the top priority for many small business owners, but no matter your size, there is a potential for significant risk. To safeguard your systems, make sure to update your software, educate your employees about potential security risks and scams, back-up your data storage in the Cloud and have a plan in place should an attack actually occur.
For more on protecting your small business, reach out to the attorneys at ALA, who are always ready to review a document and make sure you and your business are protected.