When you’re starting a new business, you’re often juggling more balls than you ever thought possible! The idea may have seemed clear on paper, but suddenly you’re facing a world of hiring, marketing, equipment rentals, vendor negotiations, and everything else that comes with business ownership. It can be both financially and personally rewarding, but it’s not always easy!
While you may have stellar instincts to work with, the pieces of your business that you don’t know may end up leading to the most significant headaches. Issues with your lease or contracts full of loopholes may be hard to spot with an untrained eye, but could lead to significant headaches if they are later challenged in court.
Here are 5 things you may miss if you start your business without working with a business lawyer:
Employment Contracts
If you’re hiring as a new entrepreneur, there’s a great chance that you’re doing so in a rush! Your business has grown quicker than you were expecting, you’re burning out from working all hours, and you really need help so that you can continue to grow without being unable to meet demand.
It’s a great problem to have, BUT employment contracts can help save the day. Employment contracts are meant to provide certainty in the working relationship - both for you and for your employees. Along with workplace policies, they lay out exactly what is expected on both sides of that relationship, and what your responsibilities may be if you need to end that relationship.
Hiring the right people may be a learning curve, but good contracts can help protect the business that you have worked so hard to build. If you do need to let someone go, it’s a well-written employment contract that can help significantly limit your payout obligations. Drafts that you find online or borrow off of industry friends are not tailored to your business, and a badly written contract can mean the difference between paying someone out for a number of weeks, or potentially a number of years.
Vendor Agreements
If your business involves selling a product, the goal is usually to bring in vendors to sell it well beyond your own reach - whether online or on store shelves. Even if you’re selling a service, most business owners dream of expanding and having third-parties help grow their network and ultimately grow the business.
Good vendor agreements are what ensures those third-parties stay third-parties. They can put in protections that not only protect the business, but that limit any claim to ownership those vendors might try and make. Vendor agreements explain to vendors very clearly what their responsibilities are, what their limitations are, and where any potential liability ultimately falls.
Commercial Leases
If you’re renting any sort of premises to run your business, whether it’s an office or a warehouse, the prospect is definitely exciting. However, the document that comes with it can be dozens of pages, and difficult to read and understand if you don’t have a background in commercial leasing. Instead, make sure you’re partnering with a lawyer who does.
Your lease spells out some of the key terms of that space, including ways that you can and cannot use it, rules on signage, rules on who can be in the space (subletting, etc.), and how it will work if one party needs to end the agreement. When it comes to commercial leases, the devil truly is in the details. A lawyer will help point out what you need to know, and can advocate on your behalf if you wish to negotiate the terms.
Equipment Leases
If you are dealing in any sort of product, then equipment leases may come up quite quickly in the earliest days of your business. Perhaps you need to rent commercial kitchen equipment, which will allow you to prepare food items for sale at a scale greater than your home kitchen. Perhaps it’s packaging equipment, or labelling equipment, or anything else that helps you to work faster.
Since this equipment is usually expensive, you’ll generally start by renting it. Those rental agreements spell out your responsibilities for the equipment, the condition that it needs to be in, who is responsible for any repairs, how payments will be made for the lease, etc. A commercial lawyer can review and negotiate these agreements on your behalf, and can help ensure that you’re under more favourable terms that don’t punish you as you grow.
Website Policies
Your company’s website may start as a basic venture, but if you grow at all then your website will quickly become a valuable tool. Perhaps you’re collecting contact information from interested potential customers and clients for marketing purposes. Perhaps you’re collecting financial information in order to take online payments. Even the most basic websites collect some level of visitor data, and that data needs to be handled carefully!
There are varying pieces of legislation in Canada, the United States, and in Europe and other places as to how online customer data must be monitored and protected. Accessibility laws can also dictate what needs to be on your website so that your business can be equally accessible to people with various disabilities. Without great policies, your business may be vulnerable to a lawsuit that you never expected!
Do not assume that these policies exist by default, or that your internet provider has all your bases covered. Your legal risks lie in places you might not have imagined (someone you’ve never met claiming your website is inaccessible, for example) so having a keen set of eyes crafting your policies and procedures can make for smoother sailing.
Final Thoughts
If you’re trying to save money in the early days, you may bristle at the thought of working with a lawyer so early on. Worry not. Not only are most of these reviews affordable on early budgets, but doing things right at the start can save on significant legal expenses down the line when you’re least prepared for them.
Our team of lawyers has worked with businesses of all sizes throughout Durham Region and we know what it takes to start a business off right. We can see the issues that you might miss, and we’ll point out the things that you can do to make sure that you’re properly protected. Contact our office today.
