10 Legal Mistakes You’re Probably Making In Your Business (But Can Easily Fix!)

By Sam Vander Wielen

You’re cozied up on the couch, favorite mug in hand, MacBook open and working away on your business. You’ve built a gorgeous website, you’re working on marketing strategy, and you’re trying to figure out how to stand out on social media. And you’ve heard a thing or two about legal — but that seemed serious and overwhelming, so you closed out a few of those tabs in your browser and went back to doing something more important.

“That can wait… right?”, you’re thinking as you find more Instagram photos for content.

I get it! Because so many of my clients felt that way once, too.

In case we don’t know each other already, I’m Sam! An attorney-turned-entrepreneur who helps women grow legally legit businesses (as I call it!) through my DIY legal contract templates and course, Fearlessly Legal™.

I started my business helping women learn and implement the legal side of business because of what I saw and heard online. I saw women working without contracts, saying things they shouldn’t say and unknowingly exposing themselves and their businesses while promoting their companies. But there’s a lot we can learn from those mistakes!

Here are the top 10 legal mistakes I see in most businesses (and a bit about how you can turn it around):

  1. Your Business Isn’t Registered

The most common mistake I see is not actually having a “legit” business to start with.

In America, business registration is done in the state where you live and work. You choose an entity type (i.e., sole proprietor, LLC, corporation, etc.) and then register your business.

Depending on the entity type you choose, not registering your business could leave you (personally) exposed, in the legal sense.

  1. You Didn’t Complete Registration

Even if you had a registered business, you might not have completed all the follow-up steps.

The steps are different for everyone depending on what type of entity you chose and where you live, but generally speaking you want to make sure you have:

  • EIN number
  • Business bank account
  • Business insurance (more on that later!)
  • Payment portals
  • Contracts and policies in place after you register your business.

 

  1. You Don’t Have a Legit Privacy Policy

If your website doesn’t have a privacy policy at all, or you “borrowed” one from online, you could seriously be exposing your business.

Nowadays, thanks to a whole bunch of boring privacy laws (both U.S. and international), we’re required to have a privacy policy on our website that tells people what info we collect about them, what we do with it, how it’s stored, how they can change or delete it, etc.

You’ll hear me say this a lot but it doesn’t just matter that you HAVE a privacy policy. It matters you have one that’s 100% true and applies to you and how you do business. So, borrowing one from someone else does you no good.

  1. You’re Missing Website Policies

There are three major website policies 99% of websites need: privacy policy (covered that in #3!), website disclaimer, and terms & conditions.

A website disclaimer is especially important if you’re a coach, consultant, or online creative. A disclaimer tells people who you are and what you do. That way, they can take your advice and do with it what they want, based on understanding your qualifications.

Terms & Conditions are the rules and regulations of your site and business. It sets out your return, chargeback, payment, refund, scheduling, and sharing policies (and so many more!) so you can confidently say you provided each policy in advance, in writing.

  1. You’ve Got to Watch What You Say (Plus How You Say It!)

If you’re a coach or consultant, you need to learn your scope of practice and familiarize yourself with “safer” words or terms in your industry.

One of the biggest mistakes I see online is people offering services, or using language, that they’re not allowed to. They’re seriously risking getting sued.

Even if you’re another type of entrepreneur or creative, we still need to watch what we say.  That’s why it’s so important that people understand who you are and what you do. They can do with your services or info what they want, as long as they understand who you are.

  1. You’re Not Using Contracts

It’s a huge mistake to not use legit, written contracts between you and your clients (or anyone else you’re exchanging money with).

Not using written contracts means that you have no way to enforce what you agreed to.

If someone stops paying you, you won’t be able to recover that money. If someone steals your content or inappropriately shares their login to your online course, then you have no policy set out to remove or penalize them.

  1. You’re Using Borrowed or DIY Docs

If you’re using contracts that you didn’t customize or have prepared for you, you run the risk of those contracts not actually covering you.

The freebies you find online, or the ones you borrow from a friend, probably aren’t specific enough for you and what you do.

You don’t just want to be able to customize them to fit your needs, you also want to be able to understand your legal docs. That way, you can both enforce them (if needed!) and explain them to clients if they have questions.

  1. You’re Listening to Friends

Running your own business is so overwhelming. It’s only natural that we turn to friends and Facebook groups to ask for direction occasionally. But as someone who’s in those very same groups and conversations online, I can tell you how much of the legal info shared amongst friends is flat-out wrong.

It’s just one of those things that keeps getting shared and re-shared, over and over — even though it’s all wrong. It’s hard to watch!

Need tax advice? Talk to your accountant. Legal advice? Lawyer. And so on, and so forth. This stuff isn’t worth messing up, so make sure you connect with the right people who can actually help you.

  1. You Don’t Have Business Insurance

So many women come to me who have so many of these legal pieces in place — except this one! To me, this is one of the most important.

Basically, professional liability (aka. E&O) business insurance provides you with an attorney (which insurance pays for) and pays out any judgment (an award from a lawsuit) on your company’s behalf, as long as whatever you’re sued for is covered by your business insurance policy.

There are other types of business insurance you may need, like commercial general liability, so it’s important to find an insurance agent who will take the time to listen to what you do and find the policy that best fits your needs.

  1. You’re Not Empowering Yourself The Way You Could

The final mistake I see is the one I hope to help women with the most. A lot of you ignore legal because it’s expensive, confusing, and — let’s face it — boring.

But by ignoring legal, you’re actually missing out on a huge opportunity to empower yourself and fully step into your boss babe CEO-role.

To me, this is a necessary and important part of running your own business. Spending a little bit of time now can you save you a world of headaches down the line. The more you know, the better you do.

If you have any questions at all, you can always get in touch with me over at samvanderwielen.com. That’s also where you can head to learn more about my DIY legal templates, my course Fearlessly Legal (that teaches you how to tackle ALL of the things in this article!), and The Ultimate Bundle, which includes both Fearlessly Legal AND 10 of my DIY legal templates.

**PS. Please note that the information in this article is for informational purposes only. It is not intended to be used as legal advice. You should work with a local attorney who can get to know you and your business before you make or implement any legal decisions or changes. Sam is a licensed attorney, but not your attorney : ) **

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