As an entrepreneur, your goal is to help your company grow and successfully overcome all the obstacles that will get in the way. Even more, you want to make sure that you avoid the mistakes others have been making and do everything better. However, this can be sometimes easy to say and hard to achieve.
When you’re just getting started there are lot of unknown variables and things can get blurry: where do you start? What’s most important? What name should you have? What do you do about all the bills and accounting? What about hiring people? And what about everything related to the legal part?
Regardless of your niche, the most important thing is to make sure your business is legally sound and secure. It does not matter what you’re doing as long as it is 100% safe and protected.
So, how do you make sure you avoid all the legal mistakes? There are a few mistakes that most startup entrepreneurs make and that you can easily avoid!
Underestimating good counsel
Did you know that almost half of small businesses have never consulted with a lawyer? This may not sound necessary at first, but it is. Good legal counsel is essential and will be a competitive advantage for business owners who manage both risks and opportunities.
There will be numerous scenarios in which you won’t know how to proceed from a legal point of view, and this is exactly where a counsel comes in. Having someone to ask important questions in key moments of your business is very, very valuable and important.
With strong legal representation you will have the power to fortify your business and brand, and scale your numbers to the sky.
Not protecting their intellectual property
Coming up with the “next big thing” is amazing but it will only matter as long as you protect it. If you don’t have control over its ownership, other people will have the freedom to simply take your idea and use it as their own. Not only will it be tremendously frustrating, but this happens more often than you can imagine and it is a missed shot at something you could have easily kept.
Getting started is easy: you do a little research, brainstorm ideas, use a free business name generator and come up with an amazing brand name. You create a visual identity, an amazing online website and feel proud of your work. However, to truly secure the business you need to protect the intellectual property that you’ve just created.
There are four types of intellectual property:
- Trademarks: a symbol that distinguishes and identifies your product and services
- Patents: you must apply for it and the process may take several years to complete; however, you can generally notate “patent pending” to communicate the fact that a patent has been applied for
- Trade secrets: they are your business’s proprietary practices and/or knowledge and they can be very valuable (ex: Coca Cola’s secret formula)
- Copyrights: they protect written work and apply without registration; simply mark your written works with a copyright symbol or take things to the next level and register your copyright with the USPTO
So, regardless of your area of activity, making sure you protect your work is highly important for the future health of your company.
Not getting agreements in writing
When you’re the owner of a business and you start working with other individuals or companies, getting everything signed on paper is a must, even when those you’re working with are trustworthy. It is highly important to make sure that you protect your work, time, effort, and money as well as you can.
While creating a contract does not take much time or effort, skipping this step can have significant, even painful consequences. Any kind of agreement should be written down on paper and signed by both parts. This will protect both parties and in the unfortunate case that something goes wrong, it will be far easier for you to prove your case in court.
When you’re just getting started with your business, you will have the tendency to say that you will get to this part at some point; however, this is one of the things you need to sort out from the beginning so that you keep yourself safe from unpleasant situations that can also cost you a lot of money.
Having a strong legal foundation as you’re getting started with your business is extremely important. It will allow you to scale your activity and protect your business from possible threats. Being smart from the beginning will increase your chances of making it into this very competitive market and it will show that you not only have a good business knowledge and foundation, but it will also prove that you are trustworthy and serious.