Running a small business is a dream for millions of Americans. Some are able to stake it out and open up an office or storefront to sustain their family. When facing such a decision, it is vital to learn from the experiences of other entrepreneurs. Many lessons are only obvious from failures and can be gleaned from unsuccessful ventures and their challenges.
Growing businesses have many moving parts involved, and any such organizations have potential weaknesses. To minimize the chances of such vulnerabilities, there are simple steps that any business can take to reduce liability.
Below are some helpful tips that we’ve seen in various industries and how you can protect yourself:
Technology can be a key role in your bottom line. Not only can automizing many aspects of your business reduce your expenses and maximize profit ratios, it can also act to prevent potential liability. By enabling computers to take orders, create 24-hour access on websites, and replace antiquated technology, your business can become a local leader. Many of these time and money saving measures can also prevent future lawsuits.
Instead of having to deal with employees that make mistakes or get into car accidents, a computer cannot put you in such a situation. Furthermore, there are reduced chances of issues such as theft and fraud. Besides the point, the general trend has been towards technological change and any hesitation could cause your enterprise to fall behind.
Form an LLC
It is important to reduce personal liability in your venture. Many businesses are run as individual ventures, often by people with little previous business experience. By forming a Limited Liability Corporation a sole proprietor or partners would be able to reduce their exposure to future lawsuits and bankruptcy. The act of incorporating will inoculate the owners against much risk, with little downside.
LLCs are not run the same as larger corporations. There isn’t the same regulation occurring or dealing with many corporate board members. The small size of an LLC lends to mobility and maneuverability. It allows for potential rapid growth and ability to adapt to quickly changing conditions. Many businesses are incorporated in the state of Delaware due to its business-friendly regulations. Corporation law varies by state and any decision should be made in consultation with an attorney.
Prevent the Notice of Claim
After running your business for a while, you may be served with a notice of claim stating that a part of your enterprise is not safe. Any part of your business that is open to the public must be safe. Issues such as broken stairs, dripping water, and broken or defective products can be cited for their danger to the public. A notice of claim could be the first step before a lawsuit. Reducing the factors that could compel such notices should be a no brainer.
Creating Proper Liability Waivers
By creating means to limit your liability, you will be amazed on how it affects your business operations. Creating liability waivers crafted with the help of a skilled business attorney can be a science. Forming language that will both explain the potential consequences of taking part in your business and compelling a signature is key. Such agreements aren’t always ironclad in court, but the closer they can get using precedent and knowledge of business law the better.
Many courts will look at the extent of how you attempted to reduce risk to consumers as well as your warnings. By taking the extra step, the chances of being challenged in court is significantly reduced, and customer satisfaction should increase as well.
Ultimately, these are just part of the actions a business can take in order to reduce your liability. There are always litigious people in every field and the possibility of a suit. Any actions you can take to reduce such a possibility are par for the course in the field of business.