Business owners are faced with putting out fires each and every day. Since their time and resources are limited, they have to prioritize which ones are worth dealing with right then and there and which ones they should develop a plan or structure to put them out in the future.
Legal “fires” for business owners are no different. There are literally thousands of legal fires a business owner “could” deal with during the life of a company. But, the key to getting ahead of this is a great fire extinguisher or system for putting them out. In legal terms, ask yourself which issues have the highest likelihood of lighting “lots” of fires at your business or if they happened, which ones could engulf the business and be financially devastating to the company. Because each business is different, this list will vary considerably, but these are some legal fires to think about to begin this process:
1. If your largest customer or client breached your contract (by ending it early even though you were required to make a substantial financial investment to get the business), what legal recourse does that agreement give you?
2. What if you were in a tragic car accident and unexpectedly passed away (…who would have authority to run the business and is a likely that person would be capable and know what do to)?
3. What if your most successful salesperson abruptly left with proprietary information, took a job with your main competitor, and immediately started calling your biggest customers?
4. What if you put almost all of your profit over the years back into the business (i.e. you saved almost nothing for retirement), sold your business at 65, and only netted half of what you needed to retire on?
5. What if you had to terminate an employee, but that person filed an extremely costly and drawn out lawsuit?
Again, each business has its own set of particular legal fires. Take some time to determine what those are. Just as importantly, ask your legal adviser two questions. What steps can you take to minimize the chance they could happen. If they do occur, what can be done now to protect your business.