According to recent statistics, small businesses make up 99.7% of the workforce in the U.S. Small businesses are important to the economy and we need you to be successful in running your business. Small businesses are also prone to common and avoidable legal mistakes. The two primary reasons why small businesses end up in court is from problems with either contracts or employees. Here are measures you can take to protect your business:
- Avoid the use of online form templates. With quick information and forms on the internet, it’s easy to think we can handle any legal issue ourselves. Stop yourself before you make a mess of your business. As a business owner, it’s essential to understand that there are some legal issues that absolutely require the assistance of an attorney. An experienced attorney can keep you from getting into trouble in the first place.
- Address complaints timely. Timeliness is a secret weapon to avoid small complaints from turning into full-blown lawsuits. Don’t ignore complaints from customers, employees, or anyone else, hoping the issues will go away or work themselves out.
- Protect your personal assets. Business owners often choose to form a corporation or a limited liability company to avoid personal obligation for business debts and liabilities. But sometimes the courts hold the owners personally liable. However, courts are less likely to hold you personally liable if you properly maintain and operate the entity. The biggest mistake you can make is comingling business and personal funds or assets!
- Be careful with employee compliance. You must also comply with a host of laws that define your relationship with your employees. This includes, hiring, on-boarding, performance, termination, training, payroll record keeping, anti-discrimination, along with wage and hour.
- Document everything. Document conversations by sending a follow up email. Emails provide a time stamp, gives the other party an opportunity to clear up any misunderstanding, and puts it in writing. Save these emails in a place where there’s no chance of data getting lost, in case you might need them. Having a stack of emails to support your version of events will go a long way to get you out of a legal mess.
- Seek legal advice early. If you wait for a crisis before talking to an attorney, it might be too late, an annual check-up with your small business attorney is a great way to prevent this. Doing so can reveal traps and provide tips to keep you in business for the long haul.
Don’t end up in court
How would your business survive a lawsuit costing $150k+ and lasting 2-3 years? You can’t control that one person who wants to sue you, but you can make it very difficult for any legal action to be successful. It’s up to you on how prepared you are. Small businesses deserve all the encouragement they can get, however, 20% of small businesses close down in the first four years of business. Sad, right? This could be avoided, at least, as a small business attorney I believe so. Litigation causes more damage than good. Even if you do have enough insurance to cover the costs involved in a litigation suit, there are many other factors that money cannot help. These include:
- The emotional cost
- The cost of time away from running the business
- The cost of lost reputation
- Loss of staff
Lawsuits can take a toll, it is distracting and can put you out of business. Albeit, there is a remedy; lawsuits can be avoided through the proper guidance of a small business attorney. Get in touch with Dana today and save your business the setback a lawsuit poses.
How healthy is your small business?
Today, we live in an era of economic and financial volatility where small businesses have their work cut out for them. It’s a daily challenge to keep your small business competitive while hitting sales and generating profits. In a bid to stay in business, it is vital to carry out routine checks on your business. These regular checks help in ascertaining the profitability of your business by:
- Organizing a board of directors which should comprise people from other professions such as lawyer, banker, accountant and an insurance advisor.
- Ensuring that your business plan still suits your business type as your business advances and grows. This should include updating your employee handbook and operating policies and procedures.
- Conducting scheduled training for employees to help them understand their roles and responsibilities. This will help in enhancing their technical know-how.
On completion of this routine checkup, the challenges and problems the business is facing should be identified. The next step is to lay out strategic plans that will help put the business in order. An attorney should be your first point of call for this exercise.
We have made the whole process of “getting a lawyer” not only easy, but affordable for small businesses. We offer practical advice that you can implement directly into your business’s day-to-day operations. Realize that no one is immune to a lawsuit so you must be as careful as possible.