With internet connectivity percolating into business at a very fast pace, entry barriers to a business becoming lesser by the day, and easy availability of capital to aspiring entrepreneurs, it has become imperative for a business to move very fast to avoid being outclassed by the competition. However, even with the environment being so dynamic, there are certain obstacles that every business needs to recognize and tackle because there is no way that any business can operate outside the legal framework that binds the industry. The reputation and profitability of your business depend on the extent of your devoting enough time and resources that are necessary, especially at the very early stages of the existence of the business. Some important tips necessary for developing a suitable legal strategy for your business:
Allow For More Legal Expenses That You Think You Require
The first mistake that most small businesses make is to grossly underestimate legal expenses that are required to be made, especially in the initial stages of formation of the business. The extent of legal costs that need to be incurred also depends on the sector you are operating in and the inclination of your customers and competition to institute lawsuits for errors of commission and omission. While it is a very good idea to consult other entrepreneurs regarding their experience of legal expenses, you should treat the indications as being conservative and keep aside a larger budget that will not prevent you from aggressively defending your business from damage or divert funds that you have allocated to operations. Be sure to consult an experienced law firm regarding the applicable license fees, filing fees, fees for trademark search, etc. that you may require.
Allow For Twice As Much Time than Anticipated
When a business idea strikes you and you see that the market niche has lots of potential, it is very natural for you to kick off operations as fast as possible to prevent others from exploiting the opportunity. However, for a business to start operating you need to have all the legal approvals, licenses, and permits that may be applicable, else you would end up violating the laws and even be forced to shut shop. It is extremely important to know what licenses and permits are required as these differ from sector to sector and from state to state.
Hire the Right Lawyer for the Task
It can be very tempting to hire a lawyer who does not have a specialization because you can get a broad spectrum of advice from him and that too at a lesser cost. However, you need to appreciate that quite like medicine, law too has a number of specializations that need experts to analyze and interpret the legal framework for best resolution. When you have a problem with your intellectual property, you should make it a point to consult an attorney who specializes in that domain. Similarly, if you have a labor law issue, you need to refer the problem to someone who is an expert in labor law. It can be worthwhile to hire a multi-specialty law firm that will be able to dedicate appropriate legal resources depending on the nature of your problem rather than try to hire individual lawyers who may end up working at cross-purposes with each other.
Ensure You Are Not Violating the Law
While the need for entrepreneurs to swing into action immediately can be very important, it is also vital that this enthusiasm does not end up in your operating outside the boundaries of the law. The consequences of doing that can be extremely prohibitive both in terms of penalties and loss of reputation with your target audience. The business can be forced to shut down and the principal officers may also find themselves behind the bars if the nature of the violation is serious enough.
As far as legal matters go, prudence and caution need to go hand in hand to enable the business to make the right start. It is not a good idea to cut corners but to allow adequate time and the budget for legal expenses so that you are always covered to the extent desirable.
Author bio: David Wicks is a senior consulting lawyer associated with Coronado Business Law Group (http://www.coronadolawyer.org/), a reputed multi-specialty business law firm. Adam is a popular speaker on legal matters and also writes extensively on small business law.