Starting out in business is fraught with challenges, and small business owners face the problem of wearing many hats. From marketing to operations, sales and finance too. The truth is, not every business area will be your forte, and when it comes to all things legal, one small error can spell disaster.
In the lead up to Small Business Week 2019, we are shining the legal spotlight on four common business mistakes we see. Whether you're new to the small business scene or a seasoned professional, the following can help you protect your business long-term and avoid *big* small business mistakes.
Contracts: The written word is king
When entering into a contract, it's worth getting it in writing. You want to set out clear terms to reduce the chances of a dispute and avoid misinterpretation. If you are drafting contracts yourself and aren't a legal expert, it pays to have a lawyer look over them. This will help ensure that important clauses are included and that contracts protect the interests of your business.
Most importantly, with business contracts, make sure you read what you are signing. If you are unsure, don't sign it until you speak with a lawyer.
Trading names: Be in the registration-know
If you trade under your own name (e.g. Sarah Smith) then you are not required to register a business name with the Australian Securities and Investments Commission (ASIC). However, if you trade under any other name (e.g. Sarah Smith Plumbing), then you must register it.
Before trading under a business name, make sure you check that it is available. More importantly, conduct a thorough brand clearance, including checking trademark registrations. Missing this step and finding out later that your business name is taken or that trademark registrations have already been granted to other parties, can be a costly mistake to make.
Business structures: Be prepared to switch it up
Your business structure should align with your short and long-term business goals. Whether you plan to operate as a sole trader, partnership or company, make sure your structure offers adequate protection. Remember, your choice will determine your legal and financial obligations.
Just because you start in business with one structure is not indicative of what structure you might need down the business track. Review your structure regularly in terms of growth. It's important to monitor your obligations, liability and protection, and this includes risks, assets and tax.
Google Lawyer: You get what you pay for
Just like Doctor Google, seeking legal advice from the Internet is no more reliable, and the truth is, any advice will not consider your situation. Whether you need a legal template like a contract, general advice or something else, seeking professional advice specific to your business will help you avoid costly mistakes and oversights.
The same goes for seeking advice from friends, family and colleagues. Although they may have first-hand business experience in *similar* situations, it is likely different from your situation. Invest in the future of your business by seeking professional legal advice and manage risk from the beginning of your business journey, rather than wait for something to go wrong.
Do you need some business *legal help*? Contact Jeremy and Noel on (07) 4632 0480.
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