But really, that’s not the first place you should start.
Here are 14 do-it-yourself steps to reduce the risks of owning a business . . . and most of them don’t require hiring an attorney.
- Written contracts for all business transactions.
- Employment handbook that you create, implement, and follow.
- Monthly bookkeeping and tracking of funds, including debts, budgeting of costs, and cash flow planning.
- Weekly Money Meetings, to track the metrics that help you grow your business, and to strategize ways to meet challenges.
- Quarterly meetings with an accountant, tax advisor, or self to determine tax liabilities (especially if business is growing and changing).
- Policies on who can bind the company to contracts, debts, and obligations.
- Written agreements with your co-owners, partners, and investors.
- On-site and off-site computer backups of all files, and testing of backups to make sure they work.
- Backup of website and website database (not just depending upon server).
- Backup (or download) of email list and other client/customer databases.
- Record of all passwords and login information for files, social media, website, banking, and other software/sites.
- Emergency plan in case of weather problems, fire/flood, or other types of disasters. Includes information with respect to passwords/logins, off-site backups, and plans for how to access the internet if there is no local connectivity.
- Personal emergency plan, including personal supplies for at least three days for you, your staff, and your family.
- Succession plans, in case you or your co-owners or ranking staff are incapacitated, or decide to leave the business. You will need to plan for both the logistics, such as contact information, procedures that only the person in question knows in detail, and password/login information, as well as have a plan for the relevant financial issues (such as how to buy out the departing partner). Financial issues may be dealt with via insurance and a succession plan, or via buyout agreements.
Maybe you would like an LLC in addition to the steps above? Or you have other small business legal questions? Let’s chat!