Starting a small business is equal parts exciting and terrifying. There is so much to learn, do and celebrate. Getting advice is part of the process; you should get it from the right people at the right time. Yes, Aunt Flora likely has opinions about how you should set up your business. But, unless Aunt Flora is a small business lawyer or accountant, this is a time when referring to the experts makes sense.
Engaging a lawyer for a start-up
I suggest you engage a lawyer early in your small business set-up process before you have clients or products to sell. Working with someone specialising in small business law can give you confidence that they will better understand the nuances of a small business.
At the start-up stage, how do you know whether you need to register a business name? Start a company? Transform an idea from side hustle to a fully-fledged organisation? Do you know how to protect your ideas, so they don’t get stolen?
Engaging a small business lawyer at the start-up stage can help with Non-Disclosure Agreements (they aren’t just for famous people) and work with you to arrange the foundations of your business structures.
Setting your small business up for success also means understanding the appropriate business structure. Personal and tax liabilities must be understood, along with succession planning for your business, including if you were to die or sell the business.
The ATO has some valuable resources for small business structures; however, talking it through with a professional makes a significant difference.
As a start-up, you will likely need to invest in website terms, privacy policies, refund policies, client agreements and other terms and conditions relevant to your business. These legal agreements can all be provided via an experienced small business lawyer. The start-up stage is NOT the time to borrow’ documents from a friend’s or competitor’s websites.
Although cash flow might feel tight early on, investing in these documents protects your business more effectively and sets you up for success. Throughout your business lifecycle, you will want your ideal clients to Know, Like and Trust you. It is much easier to build trust through properly prepared contracts and policies that reflect the true terms of working with you.
Engaging a lawyer as the business grows
As your business grows, there are new scenarios you may need to engage a lawyer for. Contract reviews are essential during this time, as additional scope, services or products are often added to a business as it grows, and the contracts often don’t keep up.
You may start implementing payment plans, addressing issues with late payments, or refunds and returns more regularly due to a higher volume of orders. As you expand your budget for business promotion, you may start hosting webinars or online courses, where you may need new terms to reflect these additional services, for example.
When you engage your first employee or contractor, hiring a small business lawyer will help confidently provide them with the contracts, policies, and procedures to protect them and your business. With every new team member, speaking to your small business lawyer can help identify any changes that need to be made to existing contracts before the new team member starts work.
You might negotiate with landlords, manufacturers, and suppliers during the growth phase. When contracts need to be signed, you should seek legal advice before making a long-term commitment.
During the growth phase, engaging a small business lawyer for legal coaching can be an excellent opportunity to connect with a legal professional. You may identify issues before they arise, find opportunities for improvement and increase your professionalism at all levels of business.
When it is time to leave your business
There comes a time in every business when the founder moves on; the business is either sold, shut down or merged. This is when you need a lawyer and where the investment you have made in small business legals throughout the lifespan of your business may pay off.
No matter which stage of your business life cycle, there are obvious times when you should engage a small business lawyer. If you don’t have a lawyer in your corner whom you can call on as the need arises, I would love to hear from you. You can work with me in several ways, including through Legal Templates, Legal Coaching and Custom-Drafted Contracts. If you aren’t sure what legal solutions you need at this stage of your business, I invite you to book a 10-minute complimentary chat to discuss your legal opportunities.