We’re going to talk about protecting yourself and your business today. This is just so important that you learn how to do that.
The big three that I believe are non-negotiable when protecting yourself and your business:
Incorporating Your Business
I know that’s very basic, but it shocked how many people go, “Well, when should I incorporate? Should I just kind of see if I can make money first?”
No. Incorporate before you open up your business. This is very, very simple. At the very least set up an LLC, but you may want to talk to an accountant and see if an S-corporation will better serve your needs. But please, you need to incorporate your business. It’s kind of like putting on your big boy pants.
Licensing Requirements
I was going to start a business and I didn’t realize all the licensing that was required. When I found out, it was overwhelming. It wasn’t a business I went in on, but I was so close to being me deep in it without having the right licenses. Make sure that you have all the necessary licenses required for the business that you want to enter into.
Partnership Agreement
Listen to me, this is huge. These are the things I’m trying to tell you you need before you start your business. These are the big three before you launch. You want to incorporate, all the licensing requirements, and partnership agreements. It’s amazing how people will launch a business with their buddy and then they want to do a post-nuptial agreement. It’s a lot harder to do it after you’re married. It’s after you start making money, and then you gotta kind of argue over who gets what, who does what. I’m telling you to do a partnership agreement. It’s really, really simple. You can get it notarized, you can use an attorney, that’s fine. But at the very least, type up what the responsibilities are. Johnny’s doing this and Mary is doing that. What happens if Johnny and Mary don’t do their responsibilities? Well, Johnny’s gotta pay somebody to do Mary’s responsibilities. It comes out of their profit. You kind of get a general idea but list out the responsibilities. List out who’s getting paid. What’s the percentage split and then how do you divorce? What type of buy-out is it? Maybe the person leaves in the first 10 years and you don’t have to give them anything!
I’ve messed up before. I had to buy a person out literally overnight for more than what they were worth. That’s why I learned this. Now I don’t buy anybody out in the first 10 years. Join me in business and I will tell you that.
Let me jump into the next big three.
Payroll Service
I have lots of employees and companies and I don’t want to get that little IRS bill that says that I did something wrong. I have a payroll service handle all my payroll. I do not play games with that, and I just encourage you to have a payroll service.
Insurance
There are two things that really can put you out of business quickly: a legal battle and a massive insurance claim. They can put you out of business, so you need to have insurance for everything that you could possibly be exposed to. I know it’s tough when you start out, but I remember when I had a magazine, I had errors in omission insurance. Why? Because if I ran an ad that was incorrect, I talked to my insurance person. I want to know anything that I could be exposed to.
You have to have general liability, workers compensation, an umbrella policy, a personal umbrella policy. You can’t afford no to, because if you have something happen, I’m telling you, you’re done.
What if one of your people, drives a company vehicle and runs into somebody? You need to have the necessary insurances.
Trademarks, Patents, & Service Marks
Protect your intellectual property. Protect the company’s name and its image. It’s not that hard. You can send it right in through the government through the US Patent and Trademark Office and you can file your own. You don’t even need an attorney. One thing about our country, they allow you to do incorporation and trademark by yourself. You may need it to get it revised later with an attorney, but at the very beginning, make sure you’re doing your trademarking and your patents.
Bonuses
These are the two professionals that you’ve gotta have hired to protect you.
You need to have a real accountant. Yes, a real CPA that works with small businesses. Not your aunt. Not a friend’s friend. Hire a real accountant who’s handled business audits and telling you how to protect yourself. I have three I have one work in my office, Monday through Friday. I have one that comes in two days a week. She watches my mone and makes sure there are no shenanigans. She also sends me an email every morning between 4:30 am and 4:45 am, literally. She’s like a rooster. She gets up so stinking early, she used to text them to me and my wife used to get upset, so now she sends him to me an email, but it basically goes through all my accounts.
The point is, is I get a report every day of my accounts, and if anything doesn’t look right.
The next thing is a lawyer. If you have a legal issue, hire an attorney who their letterhead alone puts fear in the other person. I’m not saying you have to have one from day one, but if you have a legal issue, hire a great attorney. Don’t use a low-end attorney, a general attorney. That’s like hiring a general practitioner to handle cancer.
I hired a great attorney and the problem went away in 30 days.
