The Three Biggest Risks That Small Business Owners Face Today
One of the defining features of our country is its entrepreneurial spirit. Going out on a limb, taking a chance, and starting your own business is not easy and all business owners and entrepreneurs know this. Even entrepreneurs who find a niche and think to themselves “this is foolproof!” are inherently exposed to risks.
Small Business Owners, those whose livelihood and careers depend on their business thriving have a lot to worry about. So much of a business’s chances are left up to chance and factors outside of one’s control. However, there’s ways to make sure that come the unexpected, your business is protected from harm.
In this article, we’ll go over 3 risks that small businesses are exposed to today. Consider these potential threats facing your business and how you can protect yourself. We always recommend seeking the help of a business legal counsel attorney.
The first business risk you have as a small business owner is employee matters, in other words all things related to the people you hire. This can include accusations of discrimination. It can relate to the proper categorization of employees between W2 workers and independent contractors. It can also mean understanding what wage and hour violations entail.
Having the right agreements in place, so that an employee doesn’t quick and start competing against you for example, is essential. Having a solid structure in place before you go and hire someone is the key to making sure your business is protected from potential future risks.
The second source of business risk you have involves your business contracts. On one side, it’s going to involve your customer contracts in terms of making crystal clear to your customers what they’re going to receive in exchange for the money that they pay your business. This also means being clear on the ‘when’ and the ‘what.’ So, when they’re going to receive it, and in what form. These contracts exist to make sure there’s no misunderstandings between you and the customer. It can also involve your business vendor agreements. This is where you’re the customer and you need to make sure there’s no misunderstanding about what your business is going to receive when it pays money to a vendor, when it’s going to receive those, and in what form. The bottom line is you need to make sure your business contracts are rock solid.
So, the third source of business risk you’re going to have is dealing with business partners and dealing with investors. Not having the right agreements in place can definitely lead to a need for arbitration or business litigation.
There was a time when people prided themselves on conducting business on a handshake deal and a lot of people still say that out loud now. But, what we’ve found is that those are people who could tolerate a lot of ambiguity and who like to come back to you later and remind you of some promise that you made or they thought you mad. This causes a lack of clarity. So, in today’s world, just to avoid confusion, if nothing else, you want to make sure that your agreements with your business partners are rock solid. And with investors, they need to understand exactly how they’re going to receive payment for the money that they invest in your company.
There can’t be any surprises or missed expectations in this department. So if you’re like many of our clients, you deliver a great product and a great service, and you pride yourself on going above and beyond and serving your customers. With all that attention on outstanding customer service, you may not have time to watch every detail of your contracts and make sure that you’re buttoning things up to protect yourself from risk. The last thing you want is for your relationship with your business partner to deteriorate so much you want to get rid of them.
We can help you avoid business risks
We’d love to talk to you and counsel with you about how you as a business owner can continue to deliver great products, great service, and at the same time protect your business from the risks that are lurking in the background.