Small business owners have a lot to think about when they’re starting a company. Each decision they make during this time can have a significant impact on their business and their personal life.
Because of the risks that come with owning a business, it’s critical that you evaluate some options that can protect both your company and yourself. These three ideas can benefit many new entrepreneurs.
Choose the right business structure
The business structure you choose for your company can have a major impact on the protections for the company and your personal assets. A sole proprietorship is the easiest and least expensive option, but it doesn’t provide any protections for the company or your personal assets.
Another option is establishing the company as a limited liability company, which creates a dividing line between the company and your personal assets. Corporations are another option, but these are more complex to establish and maintain.
Obtain proper insurance
The type of insurance you need depends on the type of business you’re establishing. It’s a good idea to have at least a liability policy. Errors and omissions insurance is critical for some industries. Business interruption insurance may be beneficial if the company is affected by a natural disaster.
Have all contracts reviews
Having contracts reviewed by someone familiar with contract law and your business can help you understand the terms and resolution methods. Even if a contract seems to be standard, it’s still a good idea to have it reviewed. You may also find out about updates or modifications that are needed during the review process.