Cutting Corners: The Risks and Impact on New Entrepreneurs
As a former commercial and civil litigator, I've seen it all when it comes to the risks of cutting corners in business. From the hundreds of hours and tens of thousands of dollars spent on legal fees, to the emotional stress and energetic vacuum that is the essence of a lawsuit, I have seen businesses collapse, families torn apart, and people lose it all because they tried to cut corners around the legal side of their life.
As someone who cares deeply about making sure people avoid this particular brand of pain, today I'm here to shed some light on the impact cutting corners in legal can have on new entrepreneurs in particular. It’s not worth you risking everything you’ve built only to have someone screw you on a technicality you would have picked up on if you’d hired a lawyer.
So, buckle up and get ready for some real talk about the importance of legal support. I know it’s not sexy, and legal isn’t out here making you multiple 6 figures. But what it will do is save you from losing money in the long term.
This is your friendly REALITY CHECK.
- Contracts That Could Cost You:
Picture this: You're presented with a contract for a lucrative deal, and the dollar signs start flashing before your eyes. But hold on! Don't be fooled by the allure of quick success. Neglecting to have a lawyer review your contracts can lead to disastrous consequences. That seemingly harmless document may contain hidden pitfalls that could cost you thousands or even jeopardize the future of your business. Do you know what it says? What all of the implications are? I honestly would bet money that you don’t. If you want that document looked at, just book a call with me and I can take a look for you BEFORE you sign it so you know what it is you and the other party are promising when you sign.
- Protecting Your Intellectual Property:
Your brilliant ideas and innovations are the lifeblood of your business. Failing to properly protect your intellectual property can leave you vulnerable to theft or infringement. Don't risk someone swooping in and stealing your hard-earned success. Imagine, spending all your start-up money building a brand, the colours, fonts, brand recognition and success, only to have another company who’s using the same brand name already send you a cease & desist to stop using the name under threat of litigation? Or imagine you had a great idea, a secret recipe or formula that only you know about how you do something. But you want to get some help, or bring someone in to work on it with you – but ensure they don’t steal your idea. Don’t just open your business to strangers without legal protections! Consult a lawyer to safeguard your intellectual property through contracts, trademarks, copyrights, and patents BEFORE you invest your time, energy and money into building your brand or opening your business to strangers.
- Compliance Is Key:
Ignorance of legal requirements is not bliss; it's a ticking time bomb. From business registrations and licenses to industry-specific regulations, compliance is essential. Cutting corners and neglecting legal obligations can result in hefty fines, legal disputes, and damage to your reputation. The last thing you’d want is to get blacklisted by some bureaucratic institution you need a license from because you didn’t follow the right steps or file the right compliance. Do you even know all of the registrations your corporation requires to stay compliant each year? Stay on the right side of the law by seeking legal guidance and support to ensure your business remains compliant.
- Partnership Pitfalls:
Forming partnerships and business arrangements can be an exciting opportunity for growth. However, without proper legal agreements in place, you're literally setting yourself up for potential disaster. Disagreements, misaligned goals, and conflicts can arise, causing irreparable damage to both your business and personal relationships. This is the one I see all too often. Friends placing blind trust in one another when it comes to business and money. If there’s one thing you need to cover your own ass for- it’s that. If you had any shred of respect for your relationship with the person you’re partnering with, you would insist on getting the right legal documents in place to protect yourself and your relationship. You would talk about the easy AND the hard stuff, because that is what strategic business owners do. It’s not going to be rainbows and butterflies forever, so make sure you know how it’s going to go down when things go sour. Protect yourself by having a lawyer draft a comprehensive agreement that addresses potential issues and safeguards your interests.
- Employment & Contractor Matters:
Hiring employees or contractors is a significant milestone for any business, but cutting corners in employment matters can be a costly mistake. Without proper contracts, policies, and procedures in place, you risk legal disputes, labor violations, taxation issues and damage to your company culture. Whenever you are bringing outsiders into your team, either as contractors or employees, setting the terms of the arrangement up front is essential to ensuring there are no misplaced expectations and everyone is aware of the nature of the relationship. If there is any confusion between whether one is a contractor or employee, the CRA may have something to say about it, and may choose to re-assess and decide for you. Ensure you have solid employment agreements, clear policies, and legal guidance to navigate this crucial aspect of business so you don’t end up on the wrong side of your people or the CRA.
Embracing Legal Support: An Empowered Action
Contrary to popular belief, needing legal support is not a sign of weakness; it's a powerful and proactive step towards protecting your business. Investing a few hundred dollars in having a lawyer review your contracts or guide you through legal matters can save you from potential disaster down the road. Think of it as an insurance policy for your business's success.
Not only is needing legal support and reaching out to get some an empowered step, I would actually argue that, as businesses grow, their legal needs will grow too. Not because anything is inherently wrong with your business, but because “mo money, mo problems”.
Do you think the Fortune 500 companies don’t have legal support? Or that start-up founders who were able to cash out of their company IPOs didn’t have a lawyer draft their shareholders agreement? Do you think that contract you’re signing for a $20,000 package was DIY’d?
As a new entrepreneur, cutting corners may seem tempting, but the risks and impact can be far-reaching. By neglecting legal support, you're leaving your business exposed to huge potential pitfalls, disputes, and financial hardships that could literally change the course of your life.
Don't let short-term gains blind you to the crippling long-term consequences.
Remember, seeking legal guidance is not something to be ashamed of; it's a smart and empowered action you are taking to ensure your business makes it to the next level as unscathed from outside forces as possible.
Surround yourself with a team of emotionally intelligent, experienced and passionate professionals who have your back and can guide you through the legal intricacies of entrepreneurship. Together, we can build a solid foundation for your business's success and pave the way for a thriving future.
So, fellow trailblazers, let's embrace the power of legal support, break free from the temptation to cut corners, and pave the way for our businesses to reach new heights of success!