3 of the Biggest Mistakes Made by New Business Owners
Your business, especially a startup, is under immense pressure to get started. Commonly, rushing things or cutting corners will blind you to certain things. One of those things is a well-defined hiring strategy.
Hiring employees is, of course, critical for business. Without them, a company cannot operate. However, you also need to protect your business IP and implement a solid foundation structure before starting.
Incorrect Hiring Procedures
Hiring the right employees for the job is probably the most important thing you can do. Additionally, you need to ensure employees are handled correctly.
Most solicitor services can aid when it comes to employment law. However, when hiring an employee, you must do your due diligence. This means that in addition to checking credentials and suitability for a role, you must also check the following:
- Their legal status in your country
- Whether they have the right to work
- Criminal past (if necessary)
These are the primary legal requirements that will save you much trouble if not carried out correctly. However, there are also other tools you can use to safeguard your company. For example, in addition to a standard employment contract, you could consider:
- Non-disclosure agreements: prevents an employee from discussing specific issues.
- Noncompete contracts: prevents an employer from taking trade secrets to a competitor.
- Employee handbooks: outlines all rules and regulations and what to do in events.
When hiring an employee, no legal barrier prevents you from checking an individual’s background and legal status. If this isn’t done, you potentially put your other staff members and your business at risk. And you could be held liable if an unfortunate event were to occur.
Registration Issues
Perhaps because of naivety, laziness, or lack of time, many businesses find themselves involved in legal wrangling over registration and copyright issues. First and foremost, before you do anything, you must register your name, whether you are a sole trader or a corporation. Do this before you create any intellectual property, such as a logo or slogan. Don’t include anything on your website that isn’t registered under your company name or copyrighted.
On the issue of copyright, you must protect all intellectual property. IP refers to anything that your company has creatively created. For example, as a videogame designer, your game is your intellectual property, as are the characters and game world. In short, anything not of the physical world is considered intellectual property, such as words, music, and artwork. Copyrights, trademarks, and patents are examples of IP protection.
No Clear Strategy
Of course, you did not enter the business world with no clearly defined strategy for what you want to achieve, did you? You may or may not be aware that 90% of new businesses fail. The reasons vary, but one of the most common is not having a solid and viable business plan. It’s all too easy to have a fantastic product that you think will change the world. Yet without knowing how to attract investment, market, manufacture, and sell your product, you will fail miserably if you even launch at all.
First, you need to decide on your company structure, such as LLC, partnership, or sole trader. There are varying names for these depending on your country, but they’re all the same. The reasons you need to decide on a structure include:
- Legal issues
- Liability
- Management
- Taxes
- Role designation
When everyone knows their role and what they need to do, your company can move forward. From there on, you can put your idea into play and concentrate on developing your product or service. In contrast, management and other senior staff play their part in assisting you.
