By Ritika Puri
Gaining customers. Producing a quality product. Finding new markets. These are the things that small business owners focus on when starting their latest venture. But while entrepreneurs are busy planning for the future, many fail to prepare for the worst.
Businesses large and small are loaded with risk. Liability is—or should be—a chief concern. Too many entrepreneurs, however, overlook the need to plan for and manage risk when launching their businesses. That’s why working with an attorney during the planning stages of your venture is crucial.
Beyond drafting contracts and assisting with paperwork, a lawyer can help you understand the most common risks in your industry. He or she can help your team preempt problems and minimize exposure to potential liabilities. And if disaster strikes in the future, you’ll benefit from having a relationship with an attorney who is familiar with your organization.
Start the conversation by asking the following questions:
1. What’s lurking in my blind spots?
You already know what you know. A lawyer can help you prepare for situations that you never would have expected.
“One of the greatest things that I can do for my business clients is not simply advise them on the issues they affirmatively present to me, but to ask them questions about potential issues that they have never considered,” said Clark Watson, partner at the Birmingham office of Balch and Bingham LLP.
While his or her primary objective is to help you achieve your goals, the right attorney for your business is one who ensures that your approach is realistic.
“When people start a new business, they are generally optimistic about their success and see their future through rose-colored glasses,” Watson said. “It is good for them to be enthusiastic, and the lawyer should now pour proverbial cold water on that zeal.”
2. What is your method for managing an unforeseen risk?
Business owners are often faced with challenging scenarios that their lawyer may not readily know how to navigate. After all, the law is a complex and sprawling discipline, and no one attorney can be expected to have mastered it all. That’s why small business owners should seek out lawyers who are comfortable with ambiguity.
“An attorney is a member of your team and someone who will tend to legal matters so you can focus on what you do best: growing your business,” explained Nina B. Ries, principal at Santa Monica, California’s Ries Law Group.
Small business owners should understand that lawyers cannot be one-size-fits-all experts and will frequently need to rely on expertise from their peers.
“Since no single attorney can be an expert in every area of the law, it helps if your attorney has a strong network of talented professionals in a variety of other specialties you may need to draw upon,” Ries noted.
3. What do I need to get started?
Starting a new business is a logistical tangle. Details slip through the cracks for even the most careful entrepreneur—and then return in the form of unforeseen liabilities. Your lawyer should guide you through a checklist of legal documentation designed to protect your business from a range of liabilities.
“This covers incorporation or organization, the drafting of any formation documents, obtaining any relevant permits or licenses, renting space, confirming intellectual property rights, preparing agreements, and preparing for operations,” Ries said.
Good legal representation is an integral part of the rock-solid foundation that small businesses need in order to grow and thrive. With it, your company can avoid the liabilities that derail so many unprepared ventures.
“Good advice can help you avoid costly mistakes and steer you in the direction of success,” said Ries.
Ritika Puri specializes in business, marketing, entrepreneurship and tech. She writes for American Express OPEN Forum, Forbes, Investopedia, Business Insider, CMO, the SAP Innovation Blog and others.