In this week's Freedom Friday blog and email newsletter, I want to talk about an important topic that comes up with some of my clients, and many prospective clients, and that is “How can I keep my small business out of financial trouble?” In other words, how can I avoid having my business (or even myself) being sued over money that my small business owes vendors or other third parties. Many small businesses get sued over debts or other obligations, and their owners also get sued. There are ways to prevent this from happening, and that's the topic in today's blog and email newsletter.
There are three different keys to keeping your small business out of financial trouble and lawsuits concerning debts and other obligations:
1. Review Written Contracts
The first key to keep your small business out of financial trouble is to make sure you review written contracts. Before you sign any contract or document on behalf of your small business, you need to understand it as a small business owner. Many contracts and leases will require you to sign the contract or lease as an individual, providing a personal guaranty. A personal guaranty means you can be held personally responsible if your small business defaults on the contract or lease (or other obligation). Before you sign any contract, lease, or document, make sure you understand your obligations. If you have any questions about the document, its best to consult with an attorney who can review it for you and explain your obligations to you.
2. Manage Debts Wisely
The second key to keeping your small business out of financial trouble is to manage your small business's debts wisely. If you have taken out an EIDL loan from the Small Business Administration or received a PPP loan to help pay your employees or other business expenses, you need to manage the debts of your small business. Also, many small business owners take out loans or credit cards on behalf of their small businesses. These loans and/or credit cards also need to be managed wisely and taken care of by you as the small business owner. It should be a priority to pay off these debts and avoid collection activity or litigation filed against your small business.
3. Get Help When Needed
Lastly, the third key to keeping your small business out of financial trouble is to get help when needed. If you're having trouble paying your debts and obligations, then you should consider hiring an attorney who can help your small business establish a repayment plan with your creditors. Also, if your small business and/or yourself does get sued over nonpayment of a contract, loan, or lease, it is important to hire an attorney to file a response to the lawsuit as time is of the essence.
If you are interested in starting a small business anywhere in Oklahoma, or you are interested in taking your small business to the next level, please contact me at [email protected] to schedule a FREE strategy session.
For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/