How a Business Risk Assessment Can Help Avoid Legal Trouble

Obtaining a business partner can be both a blessing and a curse. Before you decide to hire a business partner, consider whether you need one. When some decisions are relatively simple, it is common for business partners to work well together early on. Choices will become more complicated as the business relationship grows, and disagreements will occur. According to statistics, 70% of business partnerships fail. As a result, even if your partner is a friend, family member, or spouse, ownership of your business should never be split equally between you and your partner(s). Friends and family members who work together frequently disregard the need for formalities, making these types of partnerships particularly risky.

The Risk Assessment can help you ensure that the business ownership structure is the best decision for the business and you before embarking on any partnership journey.

Importance of a Business Plan

A business plan is a crucial and strategic tool for business owners and entrepreneurs. A good business plan can help your business focus on the specific steps required for your ideas to succeed, but it can also help achieve short-term and long-term goals.

You might be wondering, isn’t it possible to have a business plan that remains relevant for years? That’s a valid question, but periodically updating your business plan can ensure that your business is keeping up with the demands of your customers, accommodating an ever-changing market, keeping up with — and staying ahead of — your competitors, as well as updating your technology and supplies.

Succession is unavoidable. Rather than planning every tiny detail, succession planning is about processes to prepare for and manage eventual change. Succession planning is part of an organizational strategy for business development, shared ownership, and delegation. It is not a matter of identifying and grooming a successor.

A Family Affair

Family-owned businesses account for the majority of America’s wealth. However, when family members own small businesses, it can cause complications when planning for their future. While many small business owners are hesitant to hand over control of their company, having a succession plan in place is critical to the business’s long-term success.

For whatever reason, many entrepreneurs go through life without planning for their business if something happens to them or they decide to leave. We’ve discovered that the biggest issue for our older enterprises is a lack of succession or estate plans.

Many employers claim that hiring the right person can help your small business avoid a wide range of problems in the future, but 62% of small businesses admit to making a wrong hiring decision at least once. To begin, have you calculated all of the ongoing costs of hiring? Have you done time cost-benefit analysis? Have you clearly defined the position for which you’re looking? Have you established and documented your company’s values in an employee handbook?

The long hiring checklist

Suppose you answered yes to all of those questions. Are you confident that your company has met all of the legal requirements before hiring anyone, beginning with registering with the IRS and understanding your business tax obligations? Is workers’ compensation insurance required in your state? Have you chosen a payroll service? I could keep going.

Intellectual property (IP) encompasses trade secrets, patents, trademarks, and copyrights. Your company’s intellectual property, such as the information you’ve created to make or market your products or services, the brand, and reputation, are all protectable assets. The business’ intellectual property should be evaluated and treated as a valuable business asset.

Monitor & Protect Your IP

Small businesses that rely on the fruits of their intellectual labor must take proactive steps to protect their intellectual property. You may have registered your trademark or applied for a patent, but are you systematically monitoring for trademark infringement?

Even though advertisements are everywhere, many businesses are unaware of the numerous state and federal laws and regulations governing advertising. False advertising claims may result in private lawsuits from competitors and consumers, as well as government watchdogs.

Marketing Odds & Ends

Furthermore, the methods by which your company markets itself are strictly regulated, especially regarding email, text messaging and faxing. Even your company’s website must meet specific accessibility standards and be ADA compliant.

Recently, a court ruled against the Winn-Dixie supermarket chain that it had failed to make its website accessible to people with low or impaired vision.