This is the third and final article in a series designed to help you avoid making the same errors we see small business owners make time and again.
No. 9: Ignoring intellectual property issues
Even “low-tech” companies have intellectual property issues that may be important to the future success of the business. For example, do you require your employees and consultants to sign confidentiality and invention-assignment agreements? Have you registered for a trademark for an important company logo or product? Do you put copyright notices on your marketing and other written information? Are your trade secrets adequately protected?
Cutting-edge companies in the tech industry often face aggressive patent litigation. Companies may sit on their patents for years, hoping that another company inadvertently violates them, to get easy money through patent infringement lawsuits. In the product development phase at your company, make sure you research patents and copyrights related to your product, to avoid a messy legal battle should you step on a competitor’s toes. If in doubt, run any potential issues by an experienced attorney. Erring on the side of caution may help you avoid the dire consequences that can overwhelm many small business owners.
No.10: Not properly insuring your business and its owners
Having an experienced insurance advisor/ agent on your team is critical. Most problems can be insured against. Sadly, many small businesses do not conduct proper risk assessments to ensure that the business and its owners, directors and shareholders are properly protected against foreseeable risks through insurance. And the lack of adequate insurance can be used as an indication of not acting like a legal entity by protecting others against foreseeable risks.
No. 11: Not preparing for the future through Succession and Estate Planning
Every business has a lifespan. There is inception, growth and maturation, adulthood, and eventually some sort of passing. Often times the death of a business coincides with that of its owner(s). But it does not have to be that way. Whether you eventually want to sell the business or pass it on to another generation, while you enjoy your retirement, it is critical that you plan accordingly.
By doing so you help maximize the value of the business to a potential buyer, give the business the best chance of surviving after the key owners retire or pass away, and protect the wealth of owners and shareholders to enjoy the fruits of their labor during retirement.
No. 12: Not having an experienced business law attorney on your team
Every growing business faces issues that require the services of an experienced attorney. Many of the issues outlined in this avoiding common pitfalls series deserve the attention of a business lawyer experienced in representing start-up and emerging companies. Yes, attorneys cost money; but in the long run, the money you spend on experience will save you time, aggravation, and significantly more money. As the saying goes, you can pay one now, or pay one (or more) later.
Above all, make sure you are proactive in solving problems before they start. Understanding, anticipating and preparing for issues before they come up, good communication in the workplace and with customers, and a hands-on approach to management are the best deterrents to legal problems.
At McIlnay Button Law, a full-service business law firm, we are here to help you navigate through the common legal pitfalls faced by business owners and avoid the unnecessary risks and costs associated with them. Please contact us at (262) 421-8060 or via www.mcbusuinesslaw.com.