Avoiding Small Business Start-Up Problems

Setting up a home-based business is not risk free, even if you are not shipping merchandise anything or directly hiring anyone. When you operate a business, you are responsible for the things you do and say and if you don’t protect yourself, you can lose everything. Here are five tips to help you start your small business and avoid legal trouble.

Being Self-Employed

If you are self-employed, set up an LLC instead of a sole proprietorship. An LLC is a Limited Liability Corporation. It essentially means that you create a corporation and are then an employee or member of that corporation. This is an important distinction.

A person can go after your business, but all of your personal assets such as your bank accounts and your home are protected. If you own and operate a sole proprietorship and something goes wrong, the person can go after everything you own.

Depending on the type of business and size of business you are opening, you may want to register it as an S Corporation or other entity. Talk to a lawyer to find the best answer.

Disclaimers

Regardless of the business you are going into, you will likely need a few disclaimers. For example, if you publish a website about how to make money online, you will want a disclaimer to let visitors know that you are not responsible for their online success or failures. The same is true if you provide a service or sell products. Talk to an attorney to have a disclaimer created for your small business.

Privacy and Security Policy

What is your privacy policy? How do you protect your customer’s information? How do you keep their email address, payment information and other information private and protected? Again, you can find basic privacy and security policies online. However, make sure that you follow up and actually take those steps that you outline in your policies.

Business Agreements

If you offer a service, you will likely want to create business agreements to solidify any arrangement you have with your customers. The same is true if you hire contractors. You will want to create a work for hire agreement that outlines the responsibilities and commitments for both parties. You can find basic work for hire agreements online or you can ask your attorney to draw one up.

Insurance

If you sell products or have customers visit you on site, you are going to want to have insurance that protects them and you. The last thing you want is to lose your entire inventory to a fire or to have someone get hurt on your property.

Take a look at your business model and goals. Talk to an attorney. Then take action to protect your business, your assets and your future. It’s not difficult and the protection is well worth the time and energy.

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Author: jm

Joan Mullally has been doing business online for more than 20 years and is a pioneer in the fields of online publishing, marketing, and ecommerce. She is the author of more than 200 guides and courses designed to help beginner and intermediate marketers make the most of the opportunities the Internet offers for running a successful business. A student and later teacher trainee of Frank McCourt’s, she has always appreciated the power of the word, and has used her knowledge for successful SEO and PPC campaigns, and powerful marketing copy. One computer science class at NYU was enough to spark her fascination with all things digital. In her spare time, she works with adult literacy, animal fostering and rescue, and teaching computer skills to women.