
We recently investigated the knowledge gap that exists around legal issues with UK small businesses through research into 250 start-up business owners. Our ‘Tech and the Beanstalk’ report found that almost a third of UK business start-up owners (28 per cent) are unaware of the legal, IP, data protection, regulatory and compliance issues that might impact their companies. Because of this, small business owners are failing to protect themselves, leaving them exposed to an average loss of revenue of up to £10,000 a year in unexpected legal costs and fines.
Avoid becoming unstuck
For many small businesses, the fear of running up hefty bills for legal services is a common concern. It can take some time before even successful, fast-growing ventures can justify the expense of building an in-house legal team. Yet professional legal advice on a raft of issues such as HR, health & safety and data protection requirements is essential if a business is to avoid coming unstuck as it grows. Legal issues can quickly come under the spotlight, and things which didn’t seem important in the early days can take on a big significance. So how can firms avoid falling down this rabbit hole of unforeseen legal issues?1. Lay down the building blocks early
2. Protect your ideas
Safeguarding ownership of your work product is crucial for most companies and intellectual property can form some of a business’ most valuable assets. It is therefore essential to ensure you own or have a licence to what you use, sell, distribute or licence. This means you need to be able to identify the intellectual property rights you have, make sure you truly do own them and understand how to protect and exploit them. Alongside this, it’s important to make sure that none of this infringes on anyone else’s rights. Getting this right at the beginning will save you money and time in the long run.3. And safeguard your staff
Taking on employees is a vital step in growing a business. But to do this, it’s important to understand what the legal obligations during the recruitment process and throughout employment are. Written contracts, work permits and holiday entitlement are all key areas that need to be covered off correctly from the off-set. Getting the legal formalities right at the outset and getting into good habits of administration can prevent difficult questions arising later on.4. Avoid feeling taxed by taxations
5. Don’t let data protection derail you
As they should, many new businesses see a lot of potential in new media for marketing their products, however it’s important to be aware of the complex legislation designed to protect customers’ confidentiality. Make sure you’re fully compliant with the Privacy and Electronic Communications Regulations, which cover host digital technologies to protect the confidentiality of communications – for example ensuring that your customers are able to refuse cookies. Remember that unsolicited direct marketing emails and similar e-communications which are sent to individual subscribers are now regulated. Make sure to only send these to those that have given expressed consent to receive such materials, otherwise you may be liable. Paul Callaghan is partner at international law firm Taylor Wessing. Image sourceShare this story