Businesses start for all kinds of different reasons and in many ways. Sometimes it can be on the back of a spur of the moment conversation with a colleague or acquaintance that develops traction. Other times it can be the end product of a long period of review and planning after finding a gap in the market.
Whatever the route you’ve taken into setting up a business though, it pays to start things off on a firm footing to avoid pitfalls in the future. But when you start up a new enterprise, you won’t necessarily know what these areas are. Some things are obvious, such as setting up bank accounts and working out pricing structures. Others don’t come to mind quite as readily.
What can also happen is that we naturally tend to get drawn to deal with the more exciting parts of our businesses and leave the mundane areas for a rainy day (that may never arise). Many new businesses have innovative products, fantastic websites and brilliant social media campaigns but lack in areas of legal risk management.
A lawyer’s involvement in a fledgling business is often seen as being quite different from that of an accountant. Throughout the life of a business, the role of finance professionals helps a business grow profitably. But for most early stage businesses, a lawyer is often seen only as being needed when things go wrong, by which time it can be too late to avoid having a major impact.
So why should a business bring in legal support from the outset? As with all advisers, early engagement leads to a greater understanding of a business that can be invaluable through times of growth. Someone that knows you well and can see how you are growing is able to anticipate where the next challenge may arise.
Addressing contractual and procedural areas early on not only provides protection for when things may go wrong with clients, but also a stable platform for development. Having governance procedures in place when a business is small, means that as it grows, new employees can be are brought into a functioning system and trained rather than following the systems that they have used before or making things up as they go along. This can be as simple as identifying risks that are acceptable to a business or establishing proper sign off procedures for contracts that are not on standard terms.
It is also easier to fine tune or develop these processes as growth happens, rather than trying to implement a whole new set of procedures when a business has reached a significant size and a problem arises.
If this has raised any questions with you, get in touch with Punk Legal and find out how we can help you.
This note does not constitute legal advice and is for general information only to highlight common issues.