This article originally appeared at American Express OpenForumCharley Moore knows startups and small business.
As a San Francisco Bay Area lawyer, he built a career representing businesses, including Yahoo! And WebTV networks (acquired by Microsoft), in their early stages. But as his career at Venture Law group progressed, he saw a need that begged to be filled.
And with his experience helping to set small, new businesses and small law firms on the right legal path, he figured he could be the guy that offered what was lacking: an affordable, accessible legal resource for small- and medium-size companies.
So he started Rocket Lawyer, a California-based firm that provides those kinds of companies templates for legal documents, legal plans to show business owners what to do in certain situations and an army of lawyers standing by to give advice. Many of the resources are free for the taking, though prices for the ones that cost businesses (like on-call legal advisers) fall far below standard rates.
“Having a lawyer on retainer in the past was something only big companies and the rich could do,” Moore says. “But not anymore.”
However, there are steps small business owners should take to avoid having to call on legal help. Each should take a few fundamental steps to deflect and deal with legal troubles. Here’s what Moore says are the basic building blocks of any successful small business’s legal strategy.
1. Think about what you’re doing
You should start considering all aspects of your business, particularly whether you carry any chance of putting your customers at risk. Think about whether anyone could be hurt, or whether property could be damaged. It’s also important to factor this in as you develop and launch new services and products. Always ask yourself, “Will this put customers at risk?”
2. Choose the right form for your company
Consider your risk-factor self-assessment. Remember that even if you think the potential for harm is far-fetched or very unlikely, it can still happen—and with disastrous consequences. If your business is set up as a sole proprietorship, for example, you are personally liable for anything that goes wrong. That could mean losing your business, your savings, or even your home, Moore says. Instead, you should choose a different route for your business—for example, by incorporating it or filing to be an LLC.
3. Protect your ideas
What happens if you launch your venture, start advertising and building a reputation under someone else’s name? It could be disastrous for a budding business, Moore says. But it’s an easy fix. Be sure to do a trademark search early on (or, if you’re already established, now) to make sure you’re not infringing. Additionally, trademark any original names you plan to use. Perhaps more obvious, you should also patent new ideas if your company is one that deals in product innovation. Protecting your intellectual property is a necessary guard against other businesses snatching your ideas and products. It’s an easy, forthright way for you to ensure you’ll retain control of your business.
4. Put things in writing
It’s hard to foresee a situation where you’ll have to prove or disprove an accusation or a discrepancy between what you thought you agreed to, and what your client did. But the fact is, these things happen all the time. That’s why you need to be prepared, and stem any of these kinds of troubles before they spin out of control. The easy way to do that? Put everything in writing and keep it organised, Moore says. Make sure you’ve got formal, documented agreements with your clients (that means contracts, payment agreements, and whatever else might be relevant to your work) and that they’re always available to you. Moore suggests embracing the cloud; doing document dealings electronically helps keep things centralized, it saves space and guarantees you won’t lose important items. Plus, if you’re dealing with the worst-case scenario, it makes it easier to find the important records you need if you’re being audited or sued.
5. Know when to ask for help
If you’re in over your head, stop trying to climb out of a legal mess on your own, Moore says. You simply might not have the expertise to recover. Instead, contact a lawyer when things get to that point. It could save you a lot of time, money and energy in the long run, especially when services like Rocket Lawyer offer discounted legal services for small business owners.
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