If you own a business, then you have to do everything you can to protect that asset. Many small business owners and leaders tend to overlook this aspect of their business.
As far as they are concerned, they feel that, as long as they have the business and are running it, securing their business from “sharks” is not something that should happen. Yet time and again, we’ve seen co-founders, VCs, and boards take over a startup just because the founder or owner didn’t do the necessary.
In fact, it happened to the late Steve Jobs who was forced out of his own company in 1985 by the board. So whatever you do in business, don’t assume anything. Secure your rights and ownership from the beginning. This way, you won’t be blindsided if there’s ever an attempt at a hostile takeover.
Have an Attorney Draw Up a Thorough Agreement
If you’re going into business with other people –doesn’t matter if they’re siblings, family members, friends, or total strangers- always have a contract drawn out that covers every detail addressed in the agreement.
Talk to your lawyer about covering everything from trademark infringement to intellectual property to something as basic as share transfer. This is particularly crucial if you anticipate that your business will someday, be a very big deal. Smart and savvy business leaders don’t make business decisions based on emotions, trust, and feelings.
We’ve seen any potentially great startups ruined by that. If you don’t want to end up working as an employee or worse, fired from the company you built, be proactive about these contracts and agreements. They could potentially save from a major legal debacle in the future.
Have Professionals on Retainers
Even if you’re a sole proprietor, it is important to have professionals like accountants track your finances and manage your books –this will save you a ton of headaches come tax season.
You’ll also need a lawyer to represent you in case of any issues or to just draw up legal agreements whenever you need them. A knowledgeable attorney can also provide legal advice about business issues if you ever need it.
And before you start worrying about the cost implications, know that most professional service providers have affordable price options for even the most mundane of tasks.
Get the Right Business Insurance
There are various insurance coverages and products for different business types. Depending on your business type, you may need general liability insurance, Errors and Omissions insurance policy, workers’ compensation, cyber insurance, business interruption insurance, life insurance for you and the workers.
These are just a few that you’ll require. However, depending on your type of business, you won’t need to have everything. If you’re in doubt, speak to an informed insurance agent about this or talk to other entrepreneurs about the insurance policies they took out to protect their business. You can also ask your lawyer about this.
Finally, make sure that you provide a safe working environment for your workers. This will potentially protect you from being the subject of serious lawsuits that could bankrupt your small business.