Many small business owners make errors that could potentially lead to the failure of their businesses and significant personal liability for business debts. It is important for small business owners to be aware of the common errors they might make in order to take steps to avoid them.
When a business has employees, the business should make sure they have human resource materials that outline the employees’ responsibilities, work practices and expectations. Some businesses fail after employees bring lawsuits, and having human resource materials can help prevent such actions if an employee is terminated. Businesses should also consider blocking employee access to certain websites to prevent them from the personal use of any computers at work. If they have sensitive customer information on their work computers, they should have safeguards in place to protect the information from hackers.
Some small business owners do not understand the need to choose a legal structure under which their business will operate. Failing to organize the business in this manner can expose the owner to personal liability for the business’s debts. They may also lose their personal assets in the event they are sued. Finally, businesses that have employees need to make certain they submit all of the required employment taxes to the state and federal governments. If they fail to do so, they risk significant penalties as well as the closure of their business.
People should not just jump into a new business without going through a careful business formation and planning process. Through taking organized steps to analyze the prospective business, people might be more likely to be ultimately successful with the venture. Those who are interested in starting a business may benefit by seeking the help of a business and commercial law attorney. An attorney may help their clients with the entire planning process.