Most small business owners and operators will one day run up against a legal dispute. Many have already done so. Oftentimes, these entrepreneurs respond by making sacrifices, one study found. That included voluntarily reducing pending invoices or providing extra services at no cost as a way to remain on good terms.
A legal dispute, while sometimes necessary, can be financially and emotionally draining. So how can a small business leader take steps to prepare and protect the enterprise?
Taking a proactive approach
In the Small Business Administration study mentioned above, researchers surveyed a collection of small business owners who had recently been involved in actual or potential lawsuits. As part of the project, these individuals were asked what they learned from the experience. Their answers provide good insight.
For example, keeping records of everything – big or small – can help ensure you and your business remain safeguarded in any disputes. A higher level of scrutiny when dealing with third parties can also provide a layer of protection, as can keeping tight control of the business’ assets and daily operations.
One businessperson, writing for Entrepreneur, offered five concrete steps business owners should consider implementing:
- Be cautious about what you say, so it does not get misinterpreted
- If you have any doubts about the legality of a certain action – even small doubts – err on the side of caution
- Consider purchasing insurance that can help protect your business during litigation
- Do not skimp on an attorney – it can result in more expensive problems down the line
- Take steps to limit your personal liability by protecting your assets
Litigation is sometimes unavoidable
You can be the most cautious, deliberate business owner out there and still face the prospect of litigation. In some disputes, it is simply unavoidable and the only way to resolve the issue in a fair, timely manner. In these cases, it is vital to have an experienced law firm on your side.
By taking these types of steps now, you can put yourself in a better position to handle any legal situation that does come your way, while increasing your chances of emerging no worse for the wear.