It’s totally acceptable, and understandably common, for small businesses to make mistakes from time to time. There are some mistakes, however, which could constitute business law violations and result in hefty penalties.
The best way to avoid these sort of costly mistakes is to know what to look for. Below, we’ve summarized some of the most common holes small business owners sometimes dig themselves into.
5 Common Mistakes Made by Business Owners
- Vague Employment Handbook and Policies – Your employee handbook and all company policies should be made very clear from the very beginning. In every business there will come a day when you upset a former employee and they go looking for loopholes in your company policy to use against you in court. Make sure your policies are clear and comprehensive in order to avoid employment law
- Poor Recordkeeping – Losing a document in your personal life can be a huge inconvenience, but losing an important document in your business can be catastrophic. Make sure that you stay well organized from the day you open, and don’t throw important forms and documents into a box, and into a closet. If you don’t want to do it personally, hire somebody to completely organize/reorganize your records. That way, you can be ready in case of an audit, or some other problem.
- Get It in Writing – Verbal agreements are good between you and your friends when deciding who’s going to bring ice to the party, but not so good in business. Written agreements are much more binding and carry a lot of weight if you run into trouble down the road. No matter who it is you are reaching an agreement with, if it has to do with your business, get it in writing.
- Partnership Troubles – You may start a business with a best friend, but I assure you, nothing is harder on a friendship than starting a business together. Even if you are BFFs in the beginning, you should create a limited partnership to protect yourself just in case something goes awry down the line. A general partnership can leave you open to all sorts of problems.
- Not Lawyering Up – You may think, “Nothing is wrong, so I don’t need a business lawyer.” Well, it’s better to have one and not need them than to need a lawyer and not have one. Whatever problems come up, you’ll want to get ahead of them as soon as possible. Having a business lawyer on hand will help you resolve issues as they come. Even better, if you get hire a business lawyer before things go wrong, they may be able to help you avoid any trouble in the first place.
The Monmouth County business attorneys at Garland & Mason, L.L.C are dedicated to helping businesses achieve success and avoid potentially damaging business law violations.