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Small Business Saturday: The Legal Advice SMEs Should Read

On the eve of Small Business Saturday, it's easy to get carried away with a sales and forget important details. Here, with a timely legal intervention, we address some of the big areas start-ups often fall down.

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On the eve of Small Business Saturday, it's easy to get carried away with a sales and forget important details. Here, with a timely legal intervention, we address some of the big areas start-ups often fall down.

People

Small Business Saturday: The Legal Advice SMEs Should Read

On the eve of Small Business Saturday, it's easy to get carried away with a sales and forget important details. Here, with a timely legal intervention, we address some of the big areas start-ups often fall down.

Share this article

Small Business Saturday is upon us with the aim of supporting SMEs in their communities and highlighting their success. It’s a non-commercial national campaign with the day itself taking place on the first shopping Saturday in December each year. The honourable overall aim is to have a lasting impact on small businesses, helping them to flourish in the future.

Each year in the UK, around half a million people make the decision to start up their own business. From working very closely with many start-ups, we know that setting sail on your own is a relentless and highly demanding challenge. Yet, with the correct help from the outset, you’re hard work can pay off tremendously in the success of your business long-term.

For this reason, here are our top three legal tips to ensure that your new business gets off the best start possible. Ensuring that your legal affairs are in order from the beginning is integral to avoid unnecessary hassle and complications further down the line as your business grows.

1)      Shareholder Agreement

If you are going into business with a co-partner, co-shareholder, or a number of them, it’s vital to get the contractual documentation drawn up that will govern your relationship going forward. Drawing up and agreeing terms at the beginning will make sure you are protected should a doomsday type scenario occur in the future.

"Getting your legal affairs in order now will give your business the best possible start"

There is a whole host of possible unforeseen scenarios, such as the death of a shareholder/partner, one becoming seriously ill or a falling out between them, to name just a few.

For these reasons, the best way to ensure you are protected is to outline and agree arrangements that you can fall back on at the start of a venture when the business has minimal value behind it and all key parties are positive, keen and willing to make a success. The longer you leave drawing up this documentation, the more likely issues are to rise as people become more dogged and unwilling to negotiate.

At Gorvins, I’ve seen this situation arise countless times - partners/shareholders have fallen out but haven’t outlined their relationship with the business from the outset. Not only can resolving such situations be messy and time-consuming, they can become extremely costly.

shareholder

Make your terms clear from the start, or you might upset partners and stakeholders

2)      Terms of Business

Sorting out your Terms of Business from the word go is a key step in the road to SME success. It is especially important if you are a business that trades to a consumer market, which can be a complex legal landscape. The area surrounding consumer rights has also been tightened up recently in favour of the consumer with the new Consumer Rights Act 2015.

The new streamlined Act makes it much easier for consumers to understand their rights and challenge bad practice, which means SMEs need to be fully aware of their obligations and Terms of Business.

If you are a business-to-business trading firm, it’s still highly important that you draw up watertight Terms of Business. Although this area isn’t as regulated as the business-to-consumer arena, there are still plenty of regulations to watch out for. Getting such documentation in order will protect your company’s position and limit potential exposure.

customer

Customers know how to complain like never before

3)      Communicate!

Communication is a lynchpin for any SME to succeed. There are several areas where communication can be utilised for your business’ benefit. Perhaps the most important, and obvious, area where communication is vital is with your partner/shareholder, but it is amazing how often this gets neglected, which can quickly lead to the downfall of a start-up.

A line of communication you should certainly utilise is that of experienced business owners and network groups. Such sessions and conversations can be extremely useful when it comes to sharing ideas and good practice amongst your peers. Picking the brains of a fellow business owner and developing an almost mentor-like relationship can be invaluable; best of all, it is free!

It’s also a wise move to communicate with trusted professionals who can help steer your business in the right direction from a more formal point of view. Professionals such as; accountants, financial advisors and solicitors, can often provide that much needed guidance your SME is crying out for and may be the difference when it comes to your business sailing or sinking.

A relatively small investment in professional fees at the start of your venture can be a drop in the ocean in comparison to the costs involved if something goes wrong.

Getting your legal affairs in order now will give your business the best possible start, our advice is to act whilst everything is positive, that way everyone will know where they stand and feel confident should anything unexpected happen, leaving the business in the best possible position to prosper.

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Small Business Saturday: The Legal Advice SMEs Should Read

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