Small business owners deal with many challenges. They work tirelessly to grow their companies while fending off potential threats. However, many neglect to take the steps to protect their businesses before they take off.
Small Business Threats
While there are several factors that could hurt your company, there are some that are the most commonly-neglected. This post will give you three of the most frequent threats that entrepreneurs deal with, and how to mitigate the impact of these threats.
Warding Off Lawsuits
Lawsuits are one of the most dangerous threats that a small business can face. Even if you do nothing wrong, your company can be vulnerable to legal action from another party. For this reason, it’s important to insulate your business from lawsuits as much as possible. Moreover, you must make sure that you are protecting your personal life from the impact of a potential lawsuit as well.
One of the first steps you should take when you start a business is to consider separating the legal structure of your business. Separating your personal interests from that of the company’s is In some cases, it might make sense to operate your company as a sole proprietorship. It’s easier to file and there are fewer regulations with which you must comply.How is
But the main drawback of this type of legal structure is that you are not legally separated from your business. This means that if someone were to file a lawsuit against your company, the plaintiff could potentially come after your personal assets, which can include your home, car, and other possessions. The way to avoid this is to form your business as a limited liability company (LLC), or a corporation. These business structures provide separation between you and your business, so if someone were to file a lawsuit against the company, they would only be able to come after the assets owned by the business, not your personal assets.
Avoiding lawsuits also means being careful about what your company says and does. You want to make sure that you avoid the appearance of impropriety in your business dealings. There are individuals who will pounce on any misstep and use it as an excuse to sue your company. It might seem difficult to make sure that you’re dotting your I’s and crossing your T’s, but it can be done with the help of an experienced corporate attorney.
Protecting Your Data
Every business — whether large or small — has to protect their data. In this day and age, every successful business relies on technology and certain types of software to conduct their operations. While this has helped companies streamline their activities, it has also made many of them susceptible to cyber attacks.
If you’re running a business, you are likely storing data that could harm your customers and employees if it was taken by a hacker. This could open you up to legal action and cause your company to run afoul of the law. For this reason, you must make sure that you are keeping your data safe.
It is a common misconception that hackers usually target large corporations. However, the opposite is true. Bad actors tend to focus on small businesses because they are easier to victimize. These smaller enterprises are typically are not able to afford the type of protection that larger businesses enjoy. But knowing the potential cyber threats that could harm your company will help you ward off the most common cyber attacks.
Most entrepreneurs are not geniuses when it comes to technology. Unless you happen to understand the world of cyberspace, it’s probably best to hire someone who can implement safeguards that will safeguard your data.
Protecting Your Intellectual Property
Intellectual property is one of the most critical factors that most entrepreneurs don’t think about until it’s too late. Protecting your brand, content, and products are essential if you want to make sure that nobody else is able to profit from your hard work.
Many small business owners do not bother to protect their intellectual property because it is expensive to do so, and they don’t want to risk money investing in it if the business might fail. However, failing to protect your intellectual property can cause more headaches if your business takes off.
If someone happens to register a copyright, trademark, or patent that resembles your intellectual property before you do, it could result in costly court proceedings. What would happen if a larger corporation with more financial capital decides to infringe on your intellectual property? Most likely, they would win because they have the funds to fight a battle in court. This is why it’s important to file the appropriate paperwork with the United States Patent and Trademark Office and the Library of Congress before your business starts gaining traction.
The three types of intellectual property protection include:
- Trademark — Protects business names, logos, or catchphrases that are designed to brand your business.
- Patent — Protects the invention of a new product or service.
- Copyright — Protects original works of authorship, including video, audio, written word and more.
Making sure that nobody steals your intellectual property is critical in the success of your business. There are many predators in the corporate world who have no problem with stealing intellectual property to further their agenda. If you take the right steps, you can avoid many of the problems other entrepreneurs have dealt with.
Keeping Your Business Safe
Starting a business is one of the most challenging things you can do. There are many different factors that could damage your company beyond the point of repair. Taking the right steps towards shielding your business from harm will make it easier to build a successful business.