Nailing down the legal stuff is important so you can focus on building your business instead of worrying about whether your business is at risk. Check out this post to find out what you need to protect your business.
After you’ve finished planning your business, the next thing you need to focus on is making sure it’s protected legally. I realize that this isn’t the most exciting part of building a business, but it’s necessary.
Nailing down the legal stuff is important so you can spend 100% of your energy on building your business instead of constantly worrying about whether your business is at risk.
Unless you’re a lawyer, dealing with the legal stuff can feel overwhelming. That’s why I’m sharing a simple three-step process to help you get started. If you want to go deeper, you’ll find a more in-depth legal checklist in this post.
Get Legal Basic Training
Knowledge is empowering. Before you do anything, the first step is always to learn. This applies to legal stuff, too, especially when you’re starting a business.
You can outsource certain aspects of your business because you don’t want to do it or you just don’t have the time. But with legal stuff, you can’t outsource 100% of it to a third-party company.
Why can’t you outsource 100% of your legal stuff?
As an entrepreneur, you can expect to deal with the legal stuff regularly. You can’t avoid it. Even if you don’t like to deal with it, you can’t outsource it completely. Even if you hire a team of legal experts to be on retainer, the fact remains that they won’t be by your side 24/7.
That means you’ll have to handle the legal stuff and answer legal questions on your own every now and then. Having said that, you need to be responsible enough to get the training you need so you’ll know what to do when faced with legal problems, especially when your lawyer isn’t around.
It doesn’t mean you have to be a legal guru, but you need to learn how to become an “issue spotter.” This means being able to spot a problem that needs to be addressed. Once you spot an issue, you can talk to a lawyer, or you can find a resource that can give you information about the topic involved.
I’ve created a FREE Online Legal Foundations course inside my signature program, BADA$$ Online Marketing University, that teaches online entrepreneurs the legal foundations they need for their business. Click here to get access.
Take Action To Protect Yourself
So you’ve had your basic legal training. What’s next?
Always remember that having the knowledge about legal stuff won’t do you any good if you don’t take action. You can’t just rely on theory. It also requires a practical application. You need to do something if you want to protect your business.
What are the actions you need to take?
Form an Entity
In most cases, entrepreneurs would want to form a Limited Liability Company (LLC). Why not just go with a sole proprietorship? Because it involves you doing business, and there’s no formation of a company of any kind so there’s no protection.
If you choose an LLC, your assets will be protected because it’s your company on the hook. If your company fails, they can’t go after your personal assets like your car or home if they can’t get anything out of the company. This is the benefit of choosing to form an LLC.
- How do you form an LLC?
It’s simple and you can do it yourself in most states. Visit your state’s Secretary of State website. It’ll have the information you need to file an LLC.
In terms of the cost, you’ll have to pay between $50 and $100 to form a corporation. It’s more expensive in some areas like California. Also, other states like New York have other requirements like publishing in a newspaper that you’re forming your corporation.
- What about insurance?
Many people ask about getting insurance for their business. There’s nothing wrong with buying insurance for your business, but forming an LLC should come before that. Plus, it already provides you with the ultimate insurance since it offers protection to your personal assets.
Register Your Trademark
You need to register a trademark for your business name and your signature product or service name. You automatically get limited trademark protection when you start using the name. But when you file an application to register your trademark with the United States Patent and Trademark Office, you’ll get more protection.
Registering your trademark is relatively inexpensive to do. Instead of paying someone to do it for you, you can visit legally.co to file your trademark. They charge about $165, plus government fees. You’ll pay around $400 to register your trademark.
Get Everything in Writing
Written agreements are the most powerful tool you can use to protect your business. You should have written agreements in place for all your partners, including your vendors, virtual assistants, designers, and everyone you work with or works for you.
Written agreements will help you avoid and resolve disputes. It’ll force you to make sure that you’re on the same page with the person you’re doing business with. It also allows you to address any concerns that may arise when you’re first coming to an agreement.
Not only that, written agreements are more reliable than human memories. You don’t have to depend on what you remember because you can just check the agreement.
Find a Community Where You Can Get Answers
You’ll have some questions along the way, and you need to have a place where you can find answers and get additional information. You should find a community where you can ask questions and talk to people who may be experiencing the same situation that you’re going through.
It’s great to be part of a group that’s composed of like-minded people who are dealing with or have dealt with problems similar to yours. They won’t just provide you with answers but also support you in your endeavor. Having a place to turn to if you have questions gives you peace of mind. One great place to find this kind of community is in my free Facebook Group.
Get the Legal Stuff Out of the Way
So that’s the three-step process you need to take if you want to have legal peace of mind. You can get the legal stuff out of the way and just focus on running and growing your business.
If you want to learn more about online marketing and how to build a business the right way, you should join my completely FREE signature program, BADA$$ Online Marketing University.