I don’t need to tell you that a growing lawsuit epidemic is going on and it only appears to be getting worse. Statistics reveal that 1000’s of lawsuits are being filed each week and small business owners are prime targets. It may be a disgruntled former employee . . . a customer . . . a business competitor . . . a total stranger . . . some government agency . . . the list goes on.
One expert said your chances of being sued are higher than your chances of going to the hospital this year. I think that may be a bit of an exaggeration . . . but I do know that more lawsuits are being filed all the time . . . and starting a business only increases your risk.
With that said, I want you to know that I am an advocate for small business people. They are great . . . they provide support for many people and help make dreams come true. Small businesses including home-based businesses are the operates of our society and one of the main supports of our national economy. I grew up with parents involved in a small business. I believe wholeheartedly in small businesses.
But, small business owners need to protect themselves. The most important step you can make to protect yourself is to operate your business activities through a properly formed and maintained entity like an LLC. If you do nothing, then by default you are considered a sole proprietor which means your personal assets are at risk if there is a lawsuit.
With our don’t society, the number of LLCs being formed has grown by over 90% in the past few years. The main reason is protection.
Through intelligent business planning, small business owners can reduce the risks. Please don’t make that mistake. I’ve seen it happen. Once a lawsuit is filed, its usually too late to start thinking about forming an LLC . . . because liability starts when the injury occurs and forming an LLC is not retroactive. It’s like having insurance.
When wholeheartedly a business, its crucial that you take the necessary steps to protect yourself right up front or as soon as possible. If you believe done it yet, don’t delay or procrastinate.
Wise business planning includes the formation of the proper business entity or structure and the purchase of liability or business risk insurance when available. You can learn more about LLCs, liability protection, the best place to set up an LLC, the 4 essential steps to set up an LLC, and much more by getting your free copy of The LLC Guide for Business Owners described below.