Managing Risk and Change

Posted on October 5, 2014 in Planning & Advisors

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As those of us employees-turned-entrepreneurs know, life is full of risk. Yes, we could have stayed at our (theoretically) secure jobs, continued to make predictable sums of money (again, theoretically) and known what was expected of us. The risk, though, was that we would stagnate–as workers, people, souls. Or get laid off and thrown back into a predictable world.

So we took the leap of faith and started our own companies. We faced more risk–financial risks, legal risks–but we felt the trade-off was worth it. As we make changes to our business, different risks will arise. Some we can anticipate. Some we’ll evaluate as too remote to worry about. When you start to expand your business–such as with strategic alliances–new issues will arise. Can you withstand the risk?

As in the Three Little Pigs fable, you want to be sure your business has a strong legal foundation so that if a “wolf” (disgruntled customer, irate business partner) huffs and puffs, your house won’t blow in. What are some of the things that could blow your “house” in, if not handled properly?

  • Operating as sole proprietor in the face of a lawsuit
  • Not having a written agreement with your business partners–whether in your company or in an alliance
  • Doing business on a handshake
  • Inadequately protecting your company information or intellectual property
  • Insufficient insurance (especially if you have employees)

There are many areas that can leave your company vulnerable . . . many of which can be easily rectified. For more guidance on the potential risks to keep an eye on, I’ve created a handy tool, Is Your Business Legally Healthy?, available through my GreatBusinessLawResources.com site. It’s an easy-to-follow questionnaire. Because it’s self-scoring, you’ll know right away if your company is thriving or slowly succumbing to an unidentified illness.

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