#137 A Legal Health Check for your business
I often get asked by my clients as to what they need to have in place to protect their business legally, what their obligations are and where to start. Today, I take you through the annual legal health checklist that I've developed, so that you can safeguard your business and have that much-needed peace of mind.
In business, things inevitably evolve and change. Our team grows, we create new offerings or perhaps we decide to take a completely different direction. When these things happen, it’s crucial that we ensure that everything currently happening in our business is reflected in our documents, systems and processes.
So how do you know where to start? In this episode, I take you through the various areas of your business you should cast your eyes over for an effective legal health check, including:
Business structure review
Website terms and conditions
Employment and contractor agreements
Intellectual property and trademarks
Your commercial lease
Insurance
Debt management
Any outstanding Legal Disputes
Whether you’ve changed things up or your business is ticking along nicely, I encourage you to ensure you have in place what you need for the legal health of your business. This can be done at the beginning of either the calendar or financial year - whatever works for you is fine, so long as it gets done!
Remember, prevention is better than cure, and addressing legal matters proactively can save you time, money and stress in the long run.
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Tracey: [00:00:00]
Hello everyone. Welcome back to another episode of the Rise Up in Business podcast. In today's episode, I'm going to step you through how to do a quick health check for your business legally. So I'm asked a lot by clients, as you can imagine, and I share very openly here about questions that I'm asked and things that I share with clients.
I've asked a lot, Tracey, what do I need to have in place in my business to be protected? What do I need to have in place to comply with the law? What are my obligations? Where do I start? Because of all of these questions that I get asked, I have developed for you, the business owner, a checklist, a [00:01:00] legal checklist to make it really easy for you to cast your eye over it.
Ideally once a year or when something significant changes in your business so that you know that you've got everything in order and that everything is in place, everything you need is there. That you're good to go, you've got that peace of mind.
So I have a checklist for that. And today I'm going to run you through how to do a quick legal health check for your business using the checklist. So if you don't have a copy of the checklist yet, now might be a really great time to jump over to the website and download a copy for free. And I've called it the Annual Legal Checklist because as the name suggests, I really think that this is something worth casting your eye over once a year.
Or if something changes in your business, so if you've got new offerings or you're growing your team or if you're pivoting and taking a different direction in business, great time to pull out the checklist and run over everything then, but if you're not doing any of those things and your business is ticking along and doing all the right things, [00:02:00] once a year is optimal because you then get to make sure that everything's up to date, it's current, you've got things in the right place, you know where you're headed with that peace of mind.
So let's dive in and let's go through the checklist. The first thing I encourage you to look at is your business structure. This is not set and forget. So despite what you might think, we don't just set our business up in a structure and think she'll be right, on your way, you go. Great start, but you do need to come back and revisit it to make sure it's still the right fit for you and to make sure it still fits your circumstances because things change.
So your business structure most commonly will be a sole trader or a company structure. Sometimes you might even end up setting up a trust. But if you start as a sole trader and things are ticking along really well, there's likely to be a point that you reach at some point where you need to think about whether a company structure is going to suit you better. And your needs change, your goals change. Business structure is something that you need to consider.[00:03:00]
Whatever you do in business may determine what you call it. But this is the document that you use to engage with your clients. You need to make sure it's up to date, it's current, it's accurate, it's doing all the things. Check in on it, make sure it's doing what it needs to.
Then we go to the website. What are you doing on your website? Do your website terms and conditions adequately reflect what you're doing on your website? Let's think about freebie downloads. Let's think about things you might be selling, eBooks or products. How about programs or memberships or subscriptions?
Whatever you're doing on your website needs to be accurately reflected in your website terms and conditions because we need to make sure you're protected. Then there is your privacy policy. Again, this is something that will be accessible to the public via your website. Have you got one? Is it up to date?
Is it current? The next set of documents we look at in your business are your employment agreements and your contractor [00:04:00] agreements. Has your team grown? Do you have current up to date documents in place for your team? Have there been promotions? Has someone moved from casual to part time? Or has someone taken on a full time role?
These are the things that you need to consider to make sure that everything that is currently happening in your business with your team is reflected properly in your documents. If you've brought on contractors, make sure that they all have current contractor agreements. It's all reflective of their pay rates.
It's all reflective of the arrangements you have for distributing work or then providing the services to you. So your employment agreements and your contractor agreements need to be up to date. Just on that, we also need to make sure that we've kept a lookout throughout the year for any changes to awards that might come up.
And there's been a few this year, particularly around Christmas and end of year shutdown periods. Some awards have changed some of the ways employers can approach those shutdowns [00:05:00] with their team. So we need to be sure we're across those things. And with your contractors, make sure when you're doing this review, this health check, that your contractors are actually genuine contractors. As the relationships grown, things have developed. It's a great working relationship. Hey, love what you're doing. Come and do more work for me. Things can change in terms of how the law will view those relationships. So what may have started out at one point as a genuine contractor arrangement, it may have shifted and that person may now actually be deemed to be a genuine employee under the law and you need to be all over this to make sure that your business is not exposed down the track. And the second thing I'll say in relation to contractors, whilst we're reviewing this, turn your mind to any potential superannuation obligations that you may have on your contractors.
As I say, things change. That's why we do [00:06:00] these health checks. That's why we go through this checklist once a year, but make sure you're covering off any potential superannuation obligations. And if you're not sure, reach out to your accountant or your fabulous and approachable business lawyer and ask the question.
You've got to get this stuff right so that you've got peace of mind and you're not exposed later. The next thing that I suggest you look at as a business owner is your intellectual property. Make sure you've got all the IP protections in all of your documents where they need to be And if you're thinking about exclusivity for a name of something that you've launched this past year or recently, think podcasts, courses, programs, if that needs to be protected, then we need to think about a trademark. Last year when you did the health check, or you went through this process, it may not have even come up.
But since then, things change, something new's happened, a tagline or a name of something, it might be really important to you to think about trademarking because you need that exclusive use of that name or tagline. [00:07:00] The last one in our business documents category is your leases. So if you have a bricks and mortar business, or if you are using a coworking space or some other space arrangement, are your commercial leases up to date? Do you have a license agreement for the use of the room? When are the expiries? What are the terms?
What are your obligations? Check expiry dates, check option to renew dates, make sure you're crystal clear on those dates so you don't miss anything and you don't miss out on any opportunities. That's what I wanted to touch on when it comes to your business documents. The next thing we want to look at is the third arm in your risk mitigation strategy in business. If you've been listening to the podcast for a while, you'll know that your risk mitigation strategy for a small business owner comprises your business structure, your legal documents, and your insurance.
So now we're going to talk about insurance. It's a really great idea, once a year at least, to sit down and have a look at your insurance cover and make sure you're covered for all the things you're doing and to make sure the cover's adequate. [00:08:00] This is the time, my friends, to reach out and have a chat to your broker if things have changed or if you're just not sure about the amount of cover you've got and to have the conversation to see whether you need to increase the amount of your cover, or if you need to expand your insurance policies. Something that's coming up a lot at the moment is cyber insurance. It's a question that's being fielded a lot by me, and I'm sending everyone on to a fabulous insurance broker. But things like that are things that change. Turn your mind to your insurance, know what you've got in place, know what you're covered for. Big tick.
Let's look at debt management next as part of your health check. Have a look at where your debtors are sitting. Have a look at what it is that you should be doing to follow that up, to bring things into line with healthy cash flow. This really shouldn't be a problem if your business documents reflect how you do business, as in they're tailored for your business and you've been following what you [00:09:00] say you will do in those business documents.
So if you've got a client service agreement, you set out for your clients what your payment schedule is. When you're going to issue invoices, you make sure that you're getting those invoices paid before you continue to provide services. That really means that this debt management is very much tick-a-box and you keep moving because you've been doing things consistent with your business terms and conditions the whole way through.
If though something's fallen through the cracks and you realise when you do this analysis, holy moly, I didn't realise I had this many invoices outstanding, now's the time to dive in and get a plan in place to follow them up and get those paid.
And the very last item on the checklist as part of your health check is your legal disputes. Sit down and go through, have a look, do you have any outstanding disputes? Do you have any clients waiting for responses from you? Are there any outstanding negotiations that need to be wrapped up? The longer you leave these things, often the harder they are to resolve. [00:10:00] So if you've got a few loose ends and you've got some contracts that you're trying to finish up, or you've got some contracts you wanted to terminate, or if you've got an arrangement that you're unhappy with or a disgruntled client, perhaps has emailed you wanting to resolve something, now's a great time to sit down as part of this process and list out what they are and put a plan in place to deal with them. Trust me when I say, prevention is better than cure. We don't even want to get to this point. And we won't get to this point if we have properly tailored business documents, your client service agreement, your website terms, if you have all of those in place, they're all tailored for your business, your processes and systems support those documents and everyone in your team knows what they're doing, we won't have anything to list in the legals dispute category. But I accept we don't live in a perfect world and sometimes things happen if that's the case and we've got some loose ends, even though you don't really want to deal with them It feels really awkward, feels a bit uncomfortable and you're trying to just [00:11:00] palm it to the side hoping it'll go away, chances are it won't go away. List it, plan it, deal with it. Then you've got that peace of mind. That's what this is all about.
So there you go. That's what I wanted to share with you today and walk you through the checklist so you knew exactly how to use it and exactly how to do a quick health check for your business. And as I say, ideally, do this once a year or when things change in your business.
Most of my clients like to do this either at the beginning of a calendar year or at the beginning of a new financial year. It doesn't matter. Whatever works for you is fine so long as you're casting your eye over this, you're turning your mind to all of the things that you need to have in place, and you can tick it off confidently knowing you've got in place what you need and Hey, you've got that peace of mind. And that's what I'm all about. Thank you so much for listening to this episode. I appreciate your time so much. If you know of a business friend or colleague or bestie that would benefit from listening to this [00:12:00] episode, please forward it on.
I would love to get your help to get this podcast into the ears of even more business owners. That is what I'm here for. Thanks so much for listening. I'll catch you next time.
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