With 2018 coming to a close and 2019 quickly approaching, it’s high time to update your business strategy and goals in for the new year. If you don’t have a business plan or goals, it is never too late to start.
While you may want to increase profitability or your business’s reach, there are several legal issues that could arise while you foster your business growth. While it may seem easier to deal with these issues as they arise, proactively planning with an eye towards these issues will save you time, and money, when compared to reactively resolving them because they can quickly get out of hand.
1. Updating important business policies
When planning for business growth, business owners should also plan for the growing responsibilities that come with it. One of these responsibilities that can provide legal protections (or legal ramifications if ignored) is the various policies that protect different aspects of a business, the owner, and the people within it.
- Company handbook and company policies
Companies pursuing growth strategies should continually review and update employment policies and a Company handbook to reflect compliance with current laws, namely those dealing with employment matters or compliance issues. If you do have a handbook or policy in place, that’s a great start, just remember that having an effective policy is more than just documenting it on paper – you also need to actually implement and follow the policy.
Businesses, growing or not, should follow through with the implementation of these policies to ensure that both the company and its employees are following them. There are several scenarios in which a business not following its own policies can prove to be a larger liability than not having a policy at all. Ignoring your anti-harassment policy is much more problematic than not having one, to begin with.
- Updating insurance policies
As your business grows, your insurance policy will likely need to grow with it. Reviewing, and expanding your insurance coverage, will allow your business to ensure proper coverage for additional assets such as new equipment, moving into a different office space, or adding more employees. For example, if you’re moving your business to a larger space, you might outgrow your current general liability insurance policy. Another example includes updating your worker’s compensation policy to include new staff. Keeping your coverage up to speed with your business’s changes can keep it protected from potential pitfalls while managing new levels of growth.
2. Providing employee benefits
If you’re planning a hiring surge or expect to reach certain employee thresholds, chances are you’ll be required to provide employee benefits. If not, you may want to consider adding employee benefits such as health insurance, paid time off, or retirement plans, to remain competitive from a human resource competent thereby allowing you to continue your business’s growth. Providing good employee benefits are a staple to reducing turnover and building a culture that makes employees happy, healthy, and, in turn, moves the business forward in a positive direction.
While a number of small businesses may never reach the 50 full-time employee threshold for providing FMLA or mandatory health insurance benefits, that does not mean you cannot provide such benefits. Furthermore, there are ways for you to help employees plan for their retirement without having to create a 401K plan.
If your business lends itself to providing telecommuting, or remote working, that is one way to keep employees happy. However, be aware of the potential pitfalls with such arrangements, especially when it comes to overtime compensation.
3. Adequately protect business relationships and property before growing
Before stepping forward into a new phase of your business’s growth or scale, make sure that you protect some of the things your business already has. This can include protecting your business’s physical or intellectual property, as well as relationships with employees, clients, and vendors. Below are a few common workplace agreements to have in place before growing or scaling your business.
- Independent Contractor Agreement
Accelerated growth might lead your business to utilize external resources – such as independent contractors – to provide services. While this is oftentimes cost-effective and efficient for growing businesses, you’ll need the right business agreements to properly document pertinent aspects of the relationship. Having this agreement in place can help protect your business from the costly mistake of misclassification, as well as allowing you to protect your most important asset – your customer base.
- Employment Agreements
In some scenarios, it is argued that prevention is significantly cheaper than the cure. One such area in business involves employment agreements. Such an agreement defines the relationship between a business and its employees. An agreement with clear and concise language can prevent any miscommunication mishaps, and preserve the nature of the relationship down the road – especially if that road leads to a courtroom. When drafting an employment agreement, several things can – and should – be addressed, including responsibilities, wages, benefits, and the assignment of intellectual property, to name just a few. Employment agreements can also outline and define important aspects that should be documented – such as disciplinary action, grounds for termination, and whether or not non-monetary relief, such as an injunction, can be obtained.
- Intellectual Property Ownership Agreements
Some business owners may shrug off the idea of protecting ideas or products created by an employee, a contractor, or a consultant while working for their business. By creating such document, a business can protect the work created for them and protect itself from a costly negotiation or litigation battle over logos, websites, products and anything that an individual is paid to create for the company.
Planning for growth can be an exciting, yet stressful time for many business owners. Don’t take one step toward growth and two steps back by not examining the potential legal issues and loopholes that can arise from rapid growth.