Small businesses have enough to do just to succeed. The last thing you want to worry about is a lawsuit. If you are a business owner follow these tips to start, and contact us for individual advice suited to your situation. This is not formal legal advice, simply thoughts from your years of experience.
1. Keep it structured
Choose the business format that offers you the most protection against personal losses and financial liabilities. A sole proprietorship may be the easiest but it also leaves business owners open to the large legal risks. Consult your attorney to find out if an LLC or PLLC would keep your personal assets safer.
2. Keep it in writing
Put every business transaction you can into writing. This includes agreements, contracts, orders, and of course all financial transactions. Don’t count only on forms you find online. While these can be a good start, you must ensure the forms suit your particular business and are in agreement with your state laws. Have your attorney review all legal documents, even order forms and invoices.
3. Keep it simple
Keep the language on your printed forms simple. Jargon and confusing legalese don’t protect your small business any better than plain English does. In reality, using documents that the average person can’t understand can actually cause you more trouble in the long run. If you have to consult an encyclopedia to understand your business documents, ask your attorney to simplify the forms.
4. Keep them informed
Make sure your key policies are easy to find and easy to read. This includes disclaimers and return policies, as well as others. If the information is hidden, hard to understand, or simply too long, it’s not helping your business reputation. If you want happy customers, make sure it’s easy for them to understand your policies right up front.
5. Keep good records
Make sure your business accounts and other records are accurate and complete. You don’t want to be questioned by legal authorities, audited by the state or the IRS, or questioned in court by forensic accountants. Ask around for references, hire a good accountant and hire an independent auditor every few years.
6. Keep it insured
Don’t skimp on business liability insurance! And don’t procrastinate: The longer you wait to apply for insurance, the harder it will be to get it. But if you don’t have adequate business insurance, you’re exposing your business and possibly your personal finances to maximum risk. Insurance can protect your business if you’re sued as long as you have not broken the law.
7. Keep it legal
Keep on top of making sure you’ve got all the required licenses, permits and registrations. File taxes and all other required financial and legal documents on time. File renewals of all these documents on time. With all the calendar software packages available today, it should be easy to set up a reminder system.
8. Keep them happy
Work to resolve customer, employee and other business complaints as quickly as possible. Don’t ignore them and hope they go away. It’s easier than ever for customers and competitors to make allegations, and even to file complaints or small claims court suits. Don’t fail to take prompt action or you’ll make the situation even worse.
9. Keep it honest
Never, ever assume you can “get away with it” if you’re tempted to skirt a rule or bend a guideline. Find out the law and the ethical guidelines for your industry. Then stick to them. If you’re ever sued or if someone files a complaint, you’ll be glad you didn’t cut corners.
10. Keep it legal
It goes without saying: don’t do anything illegal or unethical. If you don’t know the local, state and federal laws that govern your business and your industry, you could easily break the law and not know it. As lawyers are fond of reminding, “ignorance of the law is no defense.” Again, ask for references and hire a good business attorney.
These tips should keep you and your business on the right side of the law, ethical codes and help you keep your customers happy. If you need more information or have questions about your particular business, contact us at FowlerStClair.com or 480-788-9911.