By Juan P. Camacho, Esq. Director of Business Law Services

It is fairly common knowledge that owning a small business is very difficult. One in five businesses fail the first year and nearly half fail within five years.

That is truly unfortunate as small businesses are what built this country. Small businesses innovate, strengthen and improve our communities.

I have dedicated my career to helping small- and medium-sized businesses succeed by avoiding some of the most common pitfalls that undermine success. Too often we see small businesses fail because of something that could have been resolved before it was too late.­

That is why I recently joined The Orlando Law Group, which is filled not only with attorneys who specialize in business law but attorneys who also own businesses. It gives our firm a unique perspective of understanding what business owners have been through.

My hope is I’ll be able to give you tips toward success and that you will consider The Orlando Law Group as a resource for you and for any of your legal needs.  

This month, let’s talk about three basic business needs that are often overlooked for small businesses, particularly those businesses just starting out:

  • • Your business structure,
  • • Your employee manual, and
  • • Your document retention policy

Is your business properly structured?

When you started your business, did you closely examine the type of business structure you wanted for tax and financial implications?

The most common type of business structure in the United States is a sole proprietorship. It is easy to become a sole proprietor, but if there is any thought of expanding the business with financing, employees and more, you need to re-think your structure. Growth cannot occur without a proper structure.

Plus, if the worst happens and you get sued or run into financial issues, both your business and your personal assets would be in danger as a sole proprietor.

If you want more than a sole proprietorship, there are many types of businesses that you can operate, from a limited liability company to a benefit corporation and everything in between.

There are plenty of resources that discuss all the pros and cons of these types of business structures, but the reality is every business is different, with different goals and challenges.

If you have the wrong business structure, you could waste significant amounts of time, and money and you could be personally liable for damages from lawsuits. If your business is not properly structured, it is not that difficult to change, you just want to make sure you make the right decision for your specific business.

Do you have an employee manual?

If you plan to have employees, they often become the No. 1 concern in your business. One key to reducing disputes with employees is having a comprehensive employee manual.

Many small business owners work very closely with their employees and develop close relationships with those employees. They trust the employee and don’t believe anything can go wrong.

Hopefully, they never do, but when dealing with employees, it is important to understand employees will have bad days. Employees will be tempted to look at other jobs. They are human and can make mistakes. And what happens if you get into an argument with the employee, as can happen between adults?

While no one likes to think of the worst-case scenario, an employee manual can help provide stability and solutions before major issues arise.

Indeed has a great resource about employee manuals here, but I want to point out two areas where they say an employee manual can help from a legal standpoint: enforcement and compliance.

As to enforcement, having an employee manual sets expectations. With it, the employee and the business owner know the lead-up to and the consequences of any adverse action. Referring to an employee manual, that the employee acknowledged receipt and that the company adhered to, is a great defense.

As to compliance, having an employee manual can be essential if a disgruntled employee files a claim of discrimination or something else to a government agency, like the Equal Employment Opportunity Commission. By having procedures outlined in an employee manual, it is a great resource to show you followed them, not taking individual and/or discriminatory actions.

Do you have a document retention policy?

Nearly everyone has heard the saying that a coverup is often worse than the crime. With a standard document retention policy followed by the entire company, your business may be protected in future litigation without looking like you were covering up your actions by deleting documents.

For instance, an employee files a lawsuit against your company claiming they were sexually harassed by another employee. The lawsuit requested all emails between the two employees, but they were deleted, leading to another accusation of the company trying to cover up the harassment.

With a document retention policy, you can legitimately say “Per our policy, all emails are automatically deleted from the server after 90 days” as a defense to show the accusations of a cover-up are false.

Of course, it is more than just having a retention policy, you have to follow it; but, by having the document retention policy, you can produce documents quickly when needed. It is great for operational needs too!

Bottom line – if it’s not in writing, it did not happen.

What to do now?

If you have any questions about these subjects and more with your business, I am ready to help you, along with the entire team at The Orlando Law Group. We all understand that every business is different, and every legal issue is unique, that’s why we focus on listening to our clients and partnering with our clients for their success.

Simply email me and let us have a conversation about your business and how I can help you ensure your business is properly structured, has a comprehensive employee manual and a working document retention plan.

The attorneys at The Orlando Law Group can help business owners in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article, or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12200 West Colonial Drive, Ste. 100, Winter Garden, FL 34787, as well as offices in Seminole, Osceola and East Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.