In our very first episode of Talking Law, we discuss why being on top of legal issues is so important, and we do a quick run through of the top 6 legal considerations for a business.
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Hi everybody, welcome to the very first episode. I’m Joanna Oakey – I own a commercial legal practice, and have spent decades working in law and in business – I’ve worked with some of Australia’s largest organisations, right through to some of Australia’s smallest – so I have a unique perspective in understanding exactly where things can go wrong legally, and the massive ramifications this can cause a business – which I want to share with you – so you can avoid pointless loss.
Before we get into the first episode, I just want to tell you what you can expect from our future
We are going to be talking about all legal areas that growing businesses need to understand, to help you avoid the many legal landmines along the way – and to help you use legal knowledge to gain commercial advantage, and to grow a business that has the right elements in place for a successful exit – if that's one of your aims.
One comment I’ve heard time and time again from business owners is that what scares them most is the unknown risks – the fear that they just don't know what they don't know, and they aren’t sure how to properly protect themselves.
So in this podcast series, I’m going to spend a lot of time talking about the legal issues you need to know about so you can work to prevent problems before they even appear.
It just pains me to see some of the issues that come into our legal firm. Business owners that have poured their heart and sole into their businesses, only to find that they have tripped on an unexpected legal landmine, which is now blowing up in their face. I’ve seen businesses that have been growing like crazy one minute, that hit the wall the next and come tumbling down.
I’ve seen countless businesses in liquidation, and stressed owners facing bankruptcy.
The risks are real, but they are usually avoidable
So each week I will be talking about areas I see regular legal risk in, and answer questions that I hear most often, and questions that you the listener are facing. So if you have anything you want me to cover – check out the show notes for how to send your questions in.
Our usual format for this podcast will be to go through a different topic each week that I have seen impacts businesses, and I will then provide actionable tips for you to avoid that risk, or to use that legal area to your advantage
So in today’s episode I just want to provide a bit of an overview of the general areas of legal risk that you should be thinking about covering off first, and areas that over coming episodes we will start to go through in more depth.
So here is a checklist of the areas for you to have a bit of knowledge in, where I have seen businesses most spectacularly blow up:
- Business structure
Make sure you have the right structure in place – suitable for where you are right now, and where you are going in the future.
having the wrong business structure in place can at worst mean your personal assets are exposed, or you are leaking money where its not necessary. On the flip side, getting this right can mean big financial gains, and easier business exit. This is a really poorly understood area – people often don't understand the options available to them, and the consequences of the type of structure they have chosen
- Identify and protect your brand and other intellectual property
This area is immense, I can’t tell you the number of times we have had client suddenly facing issues protecting their brand because they just haven’t understood how to protect their IP, or why they would want to. This is an area of law that can provide so much value when done well, and so much risk when done poorly.
The nuances of the legal environment relating to dealing with employees and contractors are really complicated. But theres lots of simple steps you can take to protect your business in this area – for example things like avoiding unfair dismissal claims, or protecting your business against employees taking clients or IP with them are all a matter of just having the right understanding, and then putting the right systems in place.
- General business contracts
From client contracts, to supplier contracts and everything in between – your business needs to have a good template library of documents to use to protect it against risk. And it needs to have the right clauses in place to provide proper protection.
having a baseline understanding of what you need in each situation, and why, is critical for a business owner. And often interconnects with our number 5
- Dealing with disputes
Too often businesses go to their lawyers to help with disputes way too late – and in the meantime they have gotten themselves into a much bigger, expensive and time consuming battle than was needed. In this part of the checklist, you should be asking yourself what resources you have in place to quickly and efficiently deal with disputes when they appear. In future episodes we will go through some big do-s and don’ts when disputes raise their head.
- Keeping on top of cashflow by developing the right internal systems
As they say, cashflow is king. The biggest problem affecting many small businesses in Australia is cashflow. Without proper cashflow, the lifeblood of any company, even a profitable organisation can put itself out of business. The worst part is, many of those organisations that failed due to insufficient cashflow could have succeeded simply by having rigorous debt collection systems in place, by making simple changes to the way they engage with their customers, and by understanding the warning signs of customers that might be about to face solvency issues (so that you can act quickly before you become stuck in a list of unpaid creditors). Setting up these systems before problems appear is key to ensuring the success of your business.
If you want to avoid a painful downfall and watch your empire crumble, the best thing to do is avoid these 6 common traps in the first place. Be proactive instead of reactive and start minimizing your risks now before they get out of control. It's easy to get excited about your growing business, but don't let busyness blind you to the risks you face as you continue to grow.
In future articles, you'll take a deep dive into each of these 6 categories specifically and discover some tools, tips, and tricks to help your organisation avoid becoming just another statistic in the graveyard of failed businesses.
But until then, here's a few quick takeaway tips you can put into action right now to reduce your risk:
- Assess your business now and at least once every year to ensure you understand what risks you are currently exposed to and at what level. Write it in your calendar now so you don't forget!
- Review your key business agreements (including client agreements, employment & contractor agreements, supplier agreements & business partner agreements) and ensure that they are using the right approaches to protect your business against litigation, and against loss – and to ensure they are staying current with the changing legislation and regulatory environment. As your business grows, the approaches in all of these key agreements will need to change to ensure they are adequately protecting your business and not leaving you exposed.
- Measure key areas like your debtor levels (and whether the financial failure of any of your debtors would impact your business) and the value of (and protection of) your intellectual property in order to know where your business stands and how well protected you really are.
Not sure where to start with your assessment in these areas? No worries. I've created a free online assessment that you can use as a basis for undertaking your annual review, or if you want an expert review, then we also have a legal health check product available, where we can review the risk and potential areas of opportunity sitting in your business.
If you would like to do a free assessment of your business, click here
Or if you would like to book in for a healthcheck review with our legal team, click here
And tune in next time, as we start to go through each of these areas in more detail, to provide you with the basic understanding you need, and actionable tips on how to protect your business
If you enjoyed what you heard today, please pop over to itunes and leave us a review.
I'd also like to find out what you are interested in hearing about, so if you have any questions leave us a message via our podcast website at talkinglaw.com.au – Ill be answering listener questions in future episodes.
Thanks again for listening in - See you next time