Are you an entrepreneur who is stuck wondering what legal needs you have in your business?What you need to protect your business. Legally.
You aren’t alone. As a business lawyer I get questions about this all the time.
We want to make sure you not only understand legal concepts and how legal works generally, but also how it works in your business. How you can use legal to help protect you.
Everyone knows that legal has something to do with business. Most business owners have at least some knowledge about contracts, LLCs, NDAs, copyrights, intellectual property, or trademarks. But, knowledge isn’t enough – you have to know how it impacts your business. That is what this guide is for – to help you get started on that path.
It’s All About Relationships
Legal protection is about documenting relationships. You know your relationships. The next step is to make sure you know how they all work together and how to connect them all.
Legal protection in your business starts with an understanding of the relationships in your business.
After almost a decade and a half of working with small businesses, we have developed the Three Pillars of a Firm Foundation as a way to group the relationships you have in your business. Knowing those relationships can help you laserfocus on how to protect your business legally.
Foundational legal protection is for the owners of the business. It is all of the relationships that work together to limit the liability of the owner.Foundational relationships include:
- Debt Investors
- Equity Investors
- Entity Selection
- Tax Structure of Your Company
- Companies Owned By Your Company
- Joint Ventures
Think of your internal protections as those relationship that involve you paying someone for products or services. These are the relationships without which your business might fail. Now, let’s think about your relationships. Write down what you have:
- Independent Contractors
- Creative Professionals
- Graphic Designers
- Content Writers
- Software Developers
- Professional Service Providers
- Affiliate Relationships
Most liabilities in a business come from outside, so this list may be longer than the rest. Your external relationships are how the outside world views you and interacts with you. It is every aspect of your customer funnel. It is important to understand your client journey and protect it along the way:
- Web Traffic and Casual Observers
- Subscribers to Your Content
- Email Subscribers
- Social Subscribers
- Recipients of Lead Magnets or Other Free Services
- Prospective Clients
- Customers or Clients
Not all of these relationships are how you make money. Sometimes, there are other protections you need in place for the outside world. Those relationships are:
- Referral Relationships
- Intellectual Property Protection (Check out Our Guide to Intellectual Property)
Document Your Relationships
These are the relationships on which your business is built. These are the relationships you need to document in your business. As you think about legal in your business, this is how you start.
Make a list. Add to it as your business grows. You may create new relationships or change the way your business works. That will change your list.
Once you understand the relationships on which your business is built, you need to make sure you have a document for every one of these relationships. Whether or not you have written it down, you have a contract with those relationships, so the best way to protect your business is to take some control and write down what the relationship looks like and how you want it to work.
Knowing Isn’t Enough – We Teach You How to Lay Your Legal Foundation Inside
If you want to know more about the legal that impacts your business and what you can do to protect it, you should check out Startup 101. It is the foundation of the Free Legal to English Membership. This three part course will take you through the three pillars of your firm foundation and help you create a plan to protect your business as you grow it.