Part 3: Protecting Your Business
In this 4-part series, we will walk you through our roadmap for successfully starting and operating a business from a legal perspective. This segment focuses on steps you can take to protect your business, both in terms of lessening liability and preventing business disputes. You can see our first segment, which discussed the different steps needed to formally organize and set up your business in Florida, here, and our second segment on getting ready for opening day, here.
This 4-part series is a collaboration between Robert N. Pelier, P.A. and Aymee C. Gonzalez, P.A.; Coral Gables business attorneys dedicated to serving business owners and entrepreneurs in every step of their journey.
From a legal perspective, one of the most important and valuable steps you can take when opening a new business is to take a step back and really analyze your business and look for potential sources of liability or conflict. Even if you have a great idea for a business, a great business model, an admirable work ethic and the perfect product, a business dispute or an unexpected lawsuit can easily derail your plans and even close your business before it even gets off the ground. Anticipating potential sources of liability and business disputes now can protect your business from the start. Here are a few key points you should consider:
- Consider non-compete agreements
Non-compete agreements are essentially contracts which limit an individual’s ability to work in the same industry or otherwise compete against a business. Before starting your own business be sure that doing so would not constitute a violation of any non-compete agreement that you may have previously entered into with a past employer or a company you were once associated with. Violating a non-compete agreement can create a serious legal headache and at best would be a huge legal set-back in getting your business off the ground. Although non-compete agreements do have their limitations, they need to be taken very seriously. If you want to start a business but think that a non-compete agreement may stand in your way, your best bet is to reach out to a local business attorney to help you navigate this tricky situation.
On the other hand, depending on the nature of your business you should consider requiring your employees, partners or associates to sign non-compete agreements to protect your business. If your business is highly specialized, niche, or involves proprietary practices, techniques, services or products, you may benefit from non-compete agreements. In these situations, a non-compete will give you peace of mind, knowing that employees, partners or others who are integral to the functioning of your business cannot undermine your hard work by opening a competing business. Like anything in law, non-compete agreements are not absolute and are subject to geographic and time limitations, and should be drafted by a knowledgeable business attorney.
- Implement some sort of business management system
In our years of experience, we have seen time and time again how failure to implement a business management system has led to costly and unexpected litigation. We use the term “business management system” to describe any sort of electronic organizational program that keeps track of your products/services, and business finances. The type of system you will need will depend on your business. For example, a business which sells products will need an inventory management system, which keeps track of inventory received and sold, whereas a business which offers services and not goods will need a system which organizes client information, keeps track of services provided and sold and time expended. Essentially, you need something, that clearly and precisely allows you to keep track the goods and services sold, client lists and information, and business finances.
This may seem rather basic; however, many new business owners overlook the risks associated failing to adopt a comprehensive with business management system. We have seen many cases in which clients choose a “go with the flow” approach which ultimately resulted in business disputes or even costly and years-long litigation. When it comes to both avoiding disputes and litigation and prevailing should disputes lawsuits ensue, keeping a comprehensive and organized business management system will be hugely beneficial.
- If it’s Important to your business, put it in writing
This cannot be emphasized enough; whether it be an agreement with a vendor or a business partner – if something is important to the functioning and future of your business, it should be formally written. Memorializing agreements in writing will give you peace of mind when it comes to the security and future of your business, can prevent disputes and increase the likelihood of you and your business prevailing, should disputes arise. But be mindful, it is not enough to simply have agreements in writing, certain important provisions and details should be included in every contract. For example, clear and definitive terms regarding the parties subject to the contract, the term of the contract and the obligations of each party is very important. Similarly, it is important to draft a contract with an eye toward giving yourself the best advantage possible should a dispute arise, clauses that deal with attorney fees, proper venue and jurisdiction will give you a leg up should disputes arise.
- Maintain a safe premises
When you start a business, especially one with a physical location, you need to consider the safety of customers and other visitors when they are in or around your store or business. A huge source of unexpected liability for business owners are accidents or even criminal acts that occur at or near your business or due to actions of your business or employees. If someone slips and falls in your store, you may be liable. If someone is mugged in the parking lot of your office, you may be liable. If your delivery vehicle hits another car, you may be liable. Taking time to critically analyze any safety concerns or risks with regard to your business can prevent costly litigation in the future.
Maintaining a safe premises also means ensuring that your virtual business is secure from cyber threats. This means ensuring that your work files, data, website, payment acceptance portals etc. are fully secure, and that no client information is at risk. Analyzing your business’ cyber security now is a great way to proactively protect your business.
Starting a successful business means continuously looking toward the future and adapting and preparing your business for anything that may come. Take the time to critically analyze and anticipate potential sources of liability and business disputes now so that you can work to minimize any risk to your new business. The Law Office of Robert N. Pelier, P.A. has experience handling a wide variety of business-related matters. We serve all business types, from small to large, we serve international clients, and our South Florida local community alike. We are located in Coral Gables, the heart of the greater Miami area, and are dedicated to serving our community. We can help you set up your business the right way, and be in your corner ready to help in every step of staring and operating your business.