Discover why it can be dangerous to start your business before you’ve got all the legal stuff figured out.
Hey there, talented reader. I bet you’re really excited to start your business. Have you designed your logo? Dreamed up the perfect name? Maybe you’re past that and already have your website designed.
You might be thinking, I might as well just start with the basics, start making a name for myself and earning some money, and worry about the “tough” stuff later. No biggie.
So, you’re ready to go, right?
No way! This is a biggie! Tough stuff—legal stuff—is so important, especially if you’re just starting out. Keep reading to find out what legal stuff you should be dealing with right off the bat and what happens if you don’t (yikes!).
Getting the legal stuff down, like contracts, website terms and conditions, privacy policies, and intellectual property (trademark, copyright, etc.) can save your business from going under.
Let’s break these down one by one so you can see why they’re important.
Do I Need a Contract?
If you do any kind of freelance work that you want to get paid for, you need to have a contract in place with your clients.
Whether you’re a web designer, graphic designer, coach of any kind, or copywriter (the list goes on!), having a contract in place, even for very small projects, protects both you and your clients.
A contract sets out what is expected of all parties (you, your client, and anyone else involved in the project), including prices and fees, who owns the work once it’s done (called copyright, a part of intellectual property), and what happens if someone doesn’t hold up their end of the contract.
Having a go-to contract can ward off potentially shady clients. It can also save you from headaches and legal troubles down the road. If something goes wrong and your client tries to sue you (it happens!), a contract can back you up.
If you haven’t already, check out the blog post Avoid Nightmare Clients with a Contract, which can tell you in more detail the benefits of having a contract, what can happen if you don’t, and how to start using one right away.
If you need a contract template that’s been professionally drafted by a lawyer, have a look at our collection of templates. We’ve got some for freelancers, coaches, and more to get you started right away.
Do I Really Need Website Terms and Conditions?
YES yes yes yes please, for the love of all that is good in this world, put some terms and conditions on your website!
For example, your website’s terms and conditions could (and should) say what visitors can do with the information they find on the site (can they copy and paste it somewhere else? Take photos and use them in their own work?). They should also detail what happens with any of the user information your site collects, and what happens if a user breaks the rules (which state/court will you go to?).
It’s also a really good idea when you set up your terms and conditions to have a double-confirmation (sometimes this is called clickwrap) where the website user has to check a box and then click “Accept” saying they agree to your terms and conditions. A high-profile court case involved this very thing.
In 2007, Lawrence E. Feldman & Associates bought advertising from Google through the “AdWords” program. Feldman, as part of the program, would pay for each click by website visitors on the ads.
Feldman stated he was a victim of “click fraud”, which is where someone (without real interest in what is being advertised), repeatedly clicks on ads, which drives up the cost of advertising.
The main issue in this case was not whether Feldman would be required to pay, but where the dispute would be resolved (that is, what state). Google asserted that it would take place at the location set out in the agreement, but Feldman said they’d never seen any such agreement.
The court held that, since Feldman clicked the checkbox that stated “Yes, I agree to the above terms and conditions” before they could click another button to move on to the next step when signing up for the program, that was confirmation of viewing the terms and conditions of the site and program and was a legally binding agreement.
Having a similar setup, knowing the law is behind you, can save you from serious legal troubles in the future.
Privacy policies may not be legally required, but they can save. your. butt. For real.
Not properly protecting your website visitors’ data can open you up to huge penalties. EU countries have imposed more than $175 million in fines against US companies for violations of the GDPR, the EU’s privacy law.
Protect your intellectual property, a.k.a content & brand
This may be last, but it is certainly not least.
A trademark is something that identifies and distinguishes your brand from someone else’s, like a symbol, design, word, or phrase (for example, a logo).
Copyright is a form of protection that “protects original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture”.
If you have a logo, business name, or anything you don’t want stolen, it’s a good idea to trademark it right away. Trademarking these things can also make sure you’re not infringing on someone else’s trademark and can prevent you from getting a dreaded cease and desist letter.
At the very least, stop what you’re doing right now and go Google your business name. If someone else has the same name in the same market, it’s a good idea to pick a new one before you invest tons of time and money into your branding just to redo it all later.
And if you plan to put out any kind of creative work, like a course, novel, song, design, etc., you need to know about copyright and how to protect that work.
Let’s Bust the Myth of “Start Before You’re Ready”
The “Start Before You’re Ready” philosophy might work in some areas of life, like… going back to school or getting into public speaking. But it doesn’t work in business.
The thought behind starting before you’re ready—starting, even if you’re scared to take the first step—is a good one, but it shouldn’t be taken literally. Start your business even if you’re scared, but don’t leave the tough stuff ‘til later. It’s not a question of if the legal stuff will come back to bite you later, it’s when.
So why not start when you’ve got it all together?
The How to Legally Protect Your Money program can help you start on the right foot and make sure you have all of this tough stuff (and more!) dealt with in the right way so that you protect your business and save your hard-earned money.
Want more ways to protect your business? Download the 9-Step Checklist to Legally Protect Your Business.