There’s nothing more painful than having your passion project nipped in the bud. All your effort, money, and time – compromised because of a legal technicality. You need to be aware of the common legal problems that tend to crop up around startup companies!
Industry Regulations
This is an issue that especially comes up with brand-new entrepreneurs in a brand-new market. Because they aren’t familiar with the typical standards of the industry, and because they haven’t made a startup before, it is inevitable that rookie mistakes are made. While honest mistakes are understandable, you could get shut down pretty early on if it clashes with government regulations. Make sure to do thorough research from trusted sources into your industry regulations. Check from every possible legal angle – health, customer policy, insurance, hiring and employment practices… the list goes on. Privacy and data regulations are especially a big worry nowadays.
Intellectual Property
This problem is double-sided; Intellectual property is a valuable asset your business needs to protect, but you also need to ensure that you do not accidentally encroach on another company’s legally protected ideas, concepts, logos, etc. As you go about creating your brand and refining your process of exchange with the consumer, make sure to jump through the required legal hoops in order to protect your business. Failure to do so can result in intellectual thievery. Conversely, before your startup even begins, check thoroughly that you aren’t taking ideas or concepts that are legally protected.
Litigation and Liability
Lawsuits will cripple your startup in the beginning – and not simply over copyright. You’re going to need specific kinds of insurance – depending on your market, your business practices, and your commercial property. One kind of liability insurance, for example, can cover you if a customer sues after falling over in your store. Another can cover minor damages done by an employee while on call inside a customer’s home for installation. The insurance necessary for your company is consequential and expensive enough that you ideally should have it figured out long before your startup opens.
Honestly, when it comes to legal issues and your startup, research and preparation will be your greatest ally. Going into an industry blind to your legal needs is a recipe for financial disaster. Instead, talk to veterans and other contacts within the industry in order to plan ahead. Have the money required for patents, copyrights, and insurance set aside long before opening day, and your business will thrive!
Check out this article on how your business can minimize lawsuits!
