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How to Protect Your Small Business
Words Dorothy Adu-Mfum
ShutterstockThink of your business like your most delicate and most valuable possession. Without protection, it is susceptible to breaking down. Unfortunately, in the rush of launching a business, many business owners neglect to put various protections in place. Founder of Law City, Dorothy Adu-Mfum discusses steps you should take to protect your small business.
Hire a lawyer
First things first, find a lawyer and find one quickly. Hiring a lawyer may seem expensive, however a good lawyer who is experienced in your industry, can save you a lot of money by helping you mitigate risks. Also, they will be able to provide vital market insight that will help you progress as a small business quicker. To find a lawyer within your industry, you can use the free “Find a Solicitor” service by The Law Society, which allows you to find tailored legal services in England & Wales that are regulated by the SRA. Also, utilise your network and ask other entrepreneurs, and friends for commercial lawyer recommendations. Take your time to speak to a range of lawyers to discuss payment options and what they can do to help your business before you hire them.
Get an accountant
Another key person you need to protect your small business is an accountant. I know; yet another expense, but it is worth it! An accountant is vital if you want to avoid liability. It is their job to know what the changes in tax law are, and how to tackle them. Even if you want to do the bookkeeping yourself, a good accountant can give valuable advice on how to expand your finances, and how much to pay your staff.
Register your business
Operating as a sole trader may be the easiest option for a small business starting with one person, however this structure may not be the best option for you as it does not protect your assets. For instance, if a client is unhappy with a service or product and they decide to sue you, your assets (savings, home, other property), are fair game. Therefore, it is important to consider the extent you want to take on personal legal liability. Other structures available are partnerships, limited liability partnerships and limited liability companies. Each structure will have varying levels of personal liability, tax implications, cost and administration requirements.
Intellectual property
The results from a great idea are likely to get copied. Whether it is a brand name, design, or your service, protect it! Ideas come in several forms, but will fit under the umbrella of intellectual property. Intellectual property includes designs (shape and configuration of objects), patents (rights granted for an invention), copyrights (applies to recorder work such as music, art, literary work, typographical arrangements and recordings) and trademarks (any physical sign or name that is capable of distinguishing goods or services). Identify what area your idea falls under, contact your layer and register it accordingly.
Insurance
Finally, get insurance. In business, things will happen that are out of your control. These things can drastically disrupt a business. A small business will survive based on how prepared it is for a crisis. Insurance is a small business’s best friend. It provides a safety net against potential risks, changes and mistakes. Insurance providers have a variety of insurance options, do the research and find out which one works best for your business model.