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4 Common Legal Mistakes That Cost Small Business Owners Thousands of Dollars

May 22, 2023

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As a business owner, you wear a LOT of hats and you have to learn to juggle many different aspects of business. 

From creating and selling your products and services, to providing customer service, to creating binge-worthy content, it’s a tough job. 

But what makes it even more tough is when you make certain legal mistakes that can cost you big time. 

These mistakes can be sneaky (and sometimes aren’t even well known), which is why as your lawyer bestie I’m here to make sure you know exactly what’s legal… and what’s not.

I ultimately want you to protect yourself and your business so you can keep more money in your bank account and out of the government’s hands!

As a lawyer, I see 4 common mistakes that end up costing small business owners THOUSANDS and in this blog post I’m diving into each so YOU can avoid them.

4 Common Legal Mistakes That Small Business Owners Make

  1. Not Disclaiming Paid Promotions on Social Media

As a business owner, there’s a chance that you receive access to some pretty sweet stuff, such as gifted collabs, brand deals, affiliate codes, etc. 

And while all of this is truly amazing and such a great opportunity (trust me, I’m all for some free swag and an affiliate partnership!), if you don’t tell your audience that it’s a paid promotion, it could backfire. 

We all know what it’s like to watch an influencer on Instagram stories talk about her favorite new hair product that’s just so incredible and act like she bought the product herself…

And then give out her code for 15% off.

Which usuallyyyyy (not always, but usually) means that the company sent her the product she’s using AND she’s making commission on the sales that use her code. 

This scenario is common and I am 100% fine with people making commision (heck, I even make commission on various products and services as an affiliate), but what’s not fine is when they do not disclaim this information. 

As a business owner, you could potentially face an enforcement action (aka get sued) under the Federal Trade Commission for failing to disclose gifted, paid or sponsored collaborations with brands or influencers. 

I am a huge supporter of affiliate marketing and I encourage you to pursue opportunities like this, but make sure you’re backing yourself up legally before doing so!

  1. Not doing a trademark search before filing

As a lawyer, one of the biggest things that I work with people on are trademarks!

Trademarks are huge because as a business owner, you want to make sure that no one can steal your business name, logo, website URL and other brand assets.

Trademarking is an important step of the branding process, but where things tend to go wrong is when you fail to do a trademark search BEFORE creating your branding.

Failing to do this is a surefire way to pay for your branding twice… and I know that you probably aren’t willing to foot that bill again, right?

Well, that’s exactly what can happen if you don’t conduct a comprehensive trademark search before filing for yours. In the case that you do file for a trademark before completing a search, someone could already have it and you’ll be forced to start from scratch. 

So, save yourself from the headache and heartache by conducting your search HERE before you begin your business branding process. 

  1. Signing on behalf of yourself instead of your business

As a business owner, you probably purchase various things that require some sort of signed contract. Whether it be working with another service provider or third party entity, contracts are typically a normal part of the process. 

Where business owners go wrong without even realizing it is signing as YOURSELF instead of as your business. 

When you sign on the dotted line as yourself, you could potentially bring your personal assets into play in the instance of a lawsuit. 

This is one of the most common mistakes that can EASILY be fixed – simply enter into an agreement as your business and sign on behalf of your business, not as yourself! ✍🏼

  1. Not having a privacy policy on your website

Did you know that if your website is missing a privacy policy you could potentially be fined up to $2,500+ per visitor to your site?!

Like I said earlier, my goal is for you to keep more of your money in YOUR bank account and out of the hands of the government and one mega way to do that is to make sure your website is legally legit.

A privacy policy is simply a detailed notice that is published on a website, typically found in the footer, that outlines how that specific website collects, uses and manages a user’s personal information.

This policy has one job: to inform your website users of what to expect so THEY are protected and so are YOU!

When the talk of policies like this comes up, business owners tend to freak out a little because sometimes it feels confusing and out of reach, but have no fear – I’ve made this one super simple for you.

If you don’t already have a privacy policy on your website, click here to grab the customizable Website Privacy Policy Template for under $50. 

And if you’re interested in learning more about privacy policies and other legal agreements, click here to read the post that defines the ins and outs.

Overall, you can enjoy the wild ride of business ownership WITHOUT making legal mistakes like this and it all starts by being aware of the laws and making sure you’re protected in every way. 

If you want that but have no freaking clue how to make it happen, you know I’ve got you.

To help you operate on a solid legal footing and feel fully confident in your business, the Business to Brand Membership has your name written all over it.

This legal membership is for creative entrepreneurs looking to secure their brands from the ground up without the staggering cost of hiring an attorney for every move their business makes.

For only $29 /month, you’ll receive:

  • 14+ hours of trainings 💻 
  • legal support on demand 📞 
  • monthly office hours with an attorney 🤳 
  • members-only discounts on TBL legal contracts and courses 🏷️ 

Click here to learn more!

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