GET IT IN WRITING
Unless it’s in writing it doesn’t count. This is a sentence that should be at the top of your mind when you enter into any kind of an agreement. When you commit to do something in exchange for something else, there should be a written agreement detailing the responsibilities of each party.
One of the most important people that you should have on your small business team is an attorney. The “I can’t afford one” statement should be changed to “I can’t afford not to have one.”
There are so many hazards in the small business world that can cause great harm, both financially and mentally, to a small business owner. Several that I frequently hear about from clients are:
- Partnerships: A loose verbal agreement when a business is started or listed as co-owners in a business entity can cause major issues when the partners don’t agree. It’s not only about the ownership percentage but also job responsibilities as well as financial responsibilities. There should also be an exit strategy for either partner discussed at the beginning of the business formation. This is only the tip of the iceberg that you need to handle with your attorney.
- Contracts (or lack of): Clients not paying for services or not paying in a timely fashion or the scope of work to be performed is not detailed. Without these and many other factors being in place, a small business may not receive the compensation verbally agreed upon. This also holds for strategic alliances or independent contractors that you use in your business, without proper documentation IRS may consider them employees and you can become liable at a future date.
BizQuack does not provide legal advice, but from our experience and the many issues that our clients and members have shared, our highest recommendation possible is to become acquainted with an attorney and maintain an ongoing relationship.
Many attorneys function as small business owners, and they are willing to visit with you in hopes of establishing a long term relationship. Select your attorney, first by instinct; what was your impression and comfort level in the meeting? Secondly select your attorney by checking references.
Reach out to your data base for recommendations.
Tips and Advice by Nick Petra – CFP, Mentor, and Founder of StrategicDuck and BizQuack
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