by Lucy Wheeler, Lawyer and Founder of Lucy Legal Limited
Starting out in business can feel daunting. There is a lot of financial pressure and there isn’t always the surety when you start out that you will be able to create regular recurring income. One element that can put people off starting a business is that they simply don’t feel like they know how to do so without breaking the law. The idea of running a legally compliant business stops budding entrepreneurs from ever starting out.
The good news is, legally protecting your business doesn’t have to be complicated. It also doesn’t have to be expensive, which can be another perceived barrier. It is not a legal requirement that you use a lawyer to draft your terms and conditions or contracts. It certainly can help to consult a lawyer to ensure that you are protected but it isn’t a prerequisite to starting your business. One way to get started is by using legal templates.
Today I’m sharing with you a simple approach to legally protecting a new business, covering the things you need to be considering to get started and how to ensure you remain legally compliant.
Where to begin?
Firstly, it may be helpful to know that you don’t need to have every legal document at the start. To begin with, consider putting in place the core legal foundational documents and then build as you go.
In the UK there are certain legal documents which are mandatory. For example, as soon as you are handling client data it is a requirement that you not only have a privacy policy in place but that you make it available to your clients and tell them how you will be handling and safely storing their data.
What comes next?
Next consider sales terms. You will need to provide clients with clear information about the way in which you will provide a product or service. What can they expect to receive and when? Are there any extra costs that the client needs to be aware of and importantly, if there is anything which they may assume is included but that you don’t offer, be sure to highlight that (think “Batteries not included”). Ensure that you cover all of the scenarios in your terms including how someone could return a product or request a refund for a product or service. Different refund rights apply depending on whether someone is purchasing as a consumer or a business, whether they purchase online or in-person and whether they are purchasing a standard product, something customised or something digital.
Before launching any new business, or even any product or service within a business it is important to consider whether anyone else is already using that name or one similar. If someone already operates using a name and they have obtained a trademark to protect them then you must ensure that you do not infringe on their rights and you may need to select something else.
In addition to legal documents, you may also need to register or notify certain government bodies such as the Information Commissioner’s Office for data privacy and your local council in respect of health and safety. Each industry has specific requirements and regulations and there may be a regulatory body who can support you to ensure that you have everything in place from a compliance perspective. Some industries will also require that you have adequate insurance in place before you start trading.
Other considerations:
Once you have the basics you can begin to strategically map out what you plan to offer over the next three months and then obtain the necessary legal documents as you introduce your new offers. For example, if you are launching a new product you will need to create product terms including product specifications, returns, and delivery details but you won’t need those on day one if you begin by offering services only and no physical products.
When you have mapped out one quarter you can repeat the same process every quarter. Start the quarter by reviewing what previous elements of legal protection you have in place, consider what’s working and what isn’t, think about any gaps that have arisen – do you need to obtain a trademark now? – and then consider what else you need to add. If there are any specific projects where you need to collaborate, bring in employees or contractors then you need to consider the legal documentation for that. This approach allows you to plan for future legal costs and set aside budget in advance. Breaking legal down into smaller chunks makes it much more accessible and affordable.
For more information on how to legally protect your business, follow Lucy on Instagram @lucy_legal or visit www.lucylegal.co.uk
This is so useful! I always found this part of business intimidating and therefore didn’t bother!