Busted! Legal Mistakes Small Businesses Need To Avoid

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When you’re taking those first big steps with your start-up, there are going to be all kinds of exciting, creative things on the horizon that you’ll want to think about. One of the last things on your mind is going to be the legal issues that come with running a new business. If your small business is starting to gain traction, here are a few common legal mistakes new entrepreneurs make, and what you can do to avoid them.

 

 

Failing to Incorporate

 

Way too many entrepreneurs begin to grow their businesses without establishing the right kind of legal structure for them. This may not have much of an impact right now, but if you want to attract investors, give yourself founder’s leave, or fight a lawsuit in the future, it can have a big impact on how easy this is. Not having the right legal structure will open up your personal liability, and generally make life more difficult for you. Determine what the best legal structure for your company is, and then go through the proper registration process.

 

Not Running Background Checks

 

Everyone wants to be able to trust the candidates they’re bringing in for a job, and no entrepreneur likes the idea of their employees having any major skeletons in their closet. While it’s pretty unlikely that you’ll hire the employee from hell, background checks are an important legal measure for a lot of companies. Whether you do it through your own resources or outsource it to a firm such as Ten Intelligence, running background checks on employees is a smart pre-emptive measure. This will open your eyes to criminal backgrounds or histories of substance abuse problems, allowing you to make the smartest possible decision for your company.

 

A Lack of HR Guidelines

 

When the business is just you and a couple of close friends, HR isn’t generally a big deal, and it doesn’t need to be. However, as you take on more staff, you’ll need to make sure you’re running your HR professionally. It’s pretty common for small companies to land themselves in hot water simply for not having employee handbooks, which are used to put standards of conduct in writing. Either seek out an HR consultancy to help you out with this, or do some extensive research and draft your own handbook.

 

Failing to Protect Customer Data

 

A lot of people aren’t aware of it, but small businesses stand more risk of getting hacked than a lot of larger corporations. This is partially due to how blasé the owners are known to be about online security! Your website going down is bad enough, but what’s even worse is the loss of sensitive customer data. Just one of these breaches can land you in some seriously hot water with the law, ruin your professional reputation, and ultimately destroy your business. Protecting your customer data, even if you only have a handful of customers, is non-negotiable. Start looking into some security services like AVG Business, which will ensure your important data is always hard to access for hackers.

Beth Mahoney

Hi! I'm Beth Mahoney, a beauty and lifestyle blogger from Honiton in Devon.

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