If one of your clients was livid about something you did and then sued you, what kind of security do you have against that attack? If another business deliberately set out to destroy you, how long could you last?
We all know we should have some sort of protection when it comes to our business but many of us, especially start-ups, don’t worry about having any sort of protection should the sky come raining down on us – at least initially. Do you think you could afford a brute-force attack from another person or business without protection?
The most important thing you can do for your business should someone or some entity try and put you out of your misery, is have a plan. Insurance usually plays a large part in a business plan in case of an emergency. However, you also need a plan to get your contracts finished if you should happen to become seriously ill. Depending on where you live, you might need a plan for weather disruptions that delay suppliers and contractors.
I cannot give you a tailored plan because everyone’s design business is different. However I can give you a generalized rule-set to follow, but know you need to seek counsel on your own. Following are a few ideas of what should be considered when formulating your plan.
This is my number one. The reason being is that I want to make sure that a lawsuit is not going to affect any other client of mine. If for any reason it does, we could be looking at more than one lawsuit. Not to mention that being bonded/insured is usually a requirement in most fields, or at least required if you want to become a reputable, trusted business.
This encompasses everything that keeps your business running. Some of the things to consider are your office, computers, printers, bank accounts, anything that you use on a daily basis to run your business. Again, most companies get insurance for these types of situations. Make sure to consult a professional before you make any decision though
For personal protection we are going to focus on protecting our family and ourselves. Should something happen to your business, we absolutely do not want hellfire to roll down hill to your personal life. We want to make sure that if, at the very worst, you go out of business, your family will be okay. I personally keep family first so this idea is very important to me. Many people create LLC’s and other corporate entities for this very reason.
This one is kind of balanced of business and personal protection. Asset protection can mean real estate, bonds, stock, trusts, or anything else that has been invested in. It would be foolish to leave these things in the open where they can be exploited during a lawsuit. This is another area that could be shielded with an entity.
Keep this list, but remember…
There is no excuse not to seek legal council. Talk to your attorneys, CPA’s, Accountants, and any other professional that can help you. I am not one of those professionals so don’t take this advice as the gospel. This information is merely intended for you to take into consideration that bad things do happen. We would much rather be prepared and have a backup plan when things go wrong.
Protect your business, family, and yourself!
Category: Project Funding