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Survey Reveals SMBs Worried about Legal Costs: 5 Tips to Help

The results are in!  We recently commissioned a survey that polled 1,000 small business owners to gauge key trends and predictions for 2011. More than half of small business owners (51 percent) say the main reason they would avoid seeking legal counsel is because it is too expensive; however, one in four say legal issues pose the biggest risk to their company.  See below for complete survey results, including feedback on Obama’s efforts to open up credit for SMBs and whether SMBs think the economy will be better in 2011.

To help small business owners protect themselves from legal liability, we’ve compiled these 5 tips:

  1. Put the Business in Ink. To protect your individual assets and your company as a whole, look into incorporating your business. While business incorporation offers many benefits, it is not for every situation. Take the time to do research and determine the best option for your business.
  2. Take time to Trademark. Once you’ve selected a company name, research trademark availability and make it official. It’s also important to register your company’s domain name, as well as select the name for social media channels such as a Twitter handle, Facebook page and company blogs.
  3. Proof and Protection. It’s important to document your company’s operations, as it can be critical information if your business is involved in a lawsuit. The federal, state and local agencies, such as the IRS, also require certain documentation, so take time to learn all of the records you will need to keep. In addition, if your company is based around proprietary intellectual knowledge or property, take the steps to patent your idea or invention.
  4. Get Guidelines. Many companies face employee-related lawsuits; in fact, it is the most prevalent type of litigation faced by small businesses today. That’s why it’s important that companies protect themselves by developing an employee handbook that provides a clear guideline for all important issues such as employee/employer rights, HR issues and paid time off policies. No matter the size of the company, it is critical that these details are in writing and understood by everyone.
  5. Enlist the Experts. Leverage a community of entrepreneurs and expert professionals, like lawyers and accountants, who can help guide you through the steps necessary to protecting yourself and setting your business on the path to success. There are many sites available, like www.RocketLawyer.com that can provide advice and cost-effective solutions for helping your company at all different stages.

To view the  complete survey results, go to the Rocket Lawyer Press Center.

About the Survey
Rocket Lawyer commissioned Zogby International to conduct an online survey of 1,000 small business owners from 9/21/10 to 9/22/10. A sampling of Zogby International’s online small business panel was invited to participate in the survey. The margin of error is +/- 3.2 percentage points. Margins of error are higher in sub-groups. The MOE calculation is for sampling error only. Numbers in the topline report have been rounded to the nearest percent.

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