BE PREPARED WITH BUSINESS LAW IN 2012
By Thomas R. Reich
1) Lack of or Poor Organizational Documents! A good understanding of small business law will tell you that you must create and maintain the right organizational documents, to prepare your small business for interaction with the real world. You must first determine what type of structure you want your small business to operate under. Small Business Law dictates that it does not stop there; there are annual filing requirements and documents that must be maintained. Don’t be a casualty, do your paperwork, it is even more important with Small Business Law!
2) Lack of Proper Corporate Records! If you say “we are a small business, Ill remember the records and do them later” you will fail. Keeping up with records is a must to be prepared in Smal Business law and takes little time if you make it an ongoing process!
3) Accepting Money from Investors Without Understanding Securities Business Laws! There are ways to accept investment, into your new small business, that are legal and this is the only way they should be accepted. Consult a lawyer first if you are unsure of Small Business Law. This is the rule of thumb; make sure you and your investors are protected before you get yourself in hot water.
4) Failing to have Founders and Employees Non-Compete Agreements! If you or your new employees have come from a similar business and are now competing with an old employer, make sure there is not aNon-Compete agreement enforce. By the same token protect yourself under small business law if what you are doing is of a unique nature.
5) Weak or Non-Existent Vendor/Client Written Agreements. If you go into your new business on a handshake agreement to provide services or products to a friend or acquaintance, this is very risky. Having a simple contract, one with terms and a time period assures that your demand will still be there when you take the plunge and open your doors. Without a written agreement, one using Small Business Law, you may find the promised small business does not materialize and you have no legal recourse.
6) Litigation! Pure and simple, many new small business owners feel they are in the cat bird seat now and they “Aren’t going to take this anymore!” You must avoid all litigation if possible, work out problems without filing suit. Litigation is very expensive and at the small business law level, it can bankrupt a company from the preparation of just one law suit, this is Small Business Law fact!. Collections are another matter, but there are professionals for that,STAY AWAY FROM LITIGATION IF YOU POSSIBLY CAN!
7) Collections! Collections can be a problem in many small businesses, and it is tempting to take things personally. First; work directly with the customer, sometimes a personal call and request for payment of promised funds from the CEO does the trick. Second; never threaten or harass the customer quoting small business law, you could cross a line that puts them in the driver’s seat legally. When the account can’t be salvaged with sugar, find good collections groups that work on a percentage and let them sow the vinegar, they are much more likely to be an expert in Small Business Law, and much more likely to collect!
8) Non-Performance Alleged Against Your Business! It is most advisable that you do your level best to go overboard and fix non-performance allegations against you. As a new business, you do not want negative statements on services like “Rip off Report” or the BBB. Offer a refund or the bend over backwards to fix the problem. Defending against a law suit is both unproductive and expensive, avoid if you can, this is the case with all Small Business Law, avoid litigation if you can.
9) Non-Performance of Other Service Providers to Your Small Business! Same rules apply; avoid Litigation if you possibly can. A call from your CEO or Director may do the trick, be cool calm and consolatory. Remember they do not want negative reports on “Rip off Report” or the BBB either. Again, Litigation when dealing with small business law is very expensive, so do you level best to work out difference civilly, but calmly and reserve the right to do what is necessary to receive services or products you have paid for. Remember how you handled the other side of this issue, and use that experience to look at the other company’s point of view. Never loose site of your rights under Small Business Law, but keep your eyes clearly on Public Relations and you image in the community!.
10) No Internal Controls, Guidelines, Manuals, etc! It is important to have written rules and regulations to govern your business on a daily basis. Internal Controls, Guidelines and Manuals are welcome by your employees, it lets them know exactly where they stand. You will find that if rules are in place, you employees will not only follow what is expected of them but be thankful for knowing how to operate within guidelines. You will be secure in the knowledge that you have done what you can to prepare your company under Small Business Law.