Entrepreneurs have it rough when it comes to getting a business off the ground. There are numerous factors to consider, and one mistake is all it can take to result in a lawsuit down the road.
Small business owners who are in the early stages of building a company should keep some common mistakes in mind in order to prevent costly legal repercussions.
Not keeping thorough documentation
Many small businesses have an informal atmosphere when they begin. Even simple ventures that are co-owned by intimate friends and family members should be strict and consistent with maintaining proper documentation. Contracts, agreements and company policies should be put on record and kept close at hand.
Not investing in the necessary insurance
It might feel as though there is not much at stake when a company is still very small. However, businesses at any stage of development have customers and possibly a few employees. Each individual a company interacts with is a point of exposure that could become a legal liability. General liability insurance is the bare minimum protection that every enterprise needs.
Not consulting with a lawyer early enough
Networking with a reliable lawyer can have far-reaching benefits for a growing business. A professional who is familiar with the law can help iron out contracts and settle potential legal issues before they get out of hand.
Building a successful company requires a huge commitment of time and effort. One of the biggest mistakes an entrepreneur can make is to let their company fall apart in a lawsuit due to a lack of preparation.