binding-contract-948442_1280.jpgWhile many businesses start as solo ventures, at a certain point you have to rely on others in order to have success and grow. Whether it’s people working for you or with you, the odds are you’re going to need help at some point. And that is probably a good thing; while solo work allows you to pursue a singular vision without having to compromise, coworkers and collaborators bring new ideas and new skills that you previously didn’t possess.  But working with others isn’t always easy, and adding people to your business brings about complications that need to be addressed before they turn into serious issues.

Before you start adding people to your team, you want to think about having agreements in place for all of your employees and contractors. Good employment agreements clearly define the rules and parameters of their employment, including ownership of work created for you as well as work done outside of office hours, should you so choose.  You might assume that you would automatically own any work created by those in your employ, the laws aren’t quite so straightforward in the absence of a written agreement. And while you likely have trustworthy employees who wouldn’t create such an issue if they left, it’s best not to leave such matters to handshakes and trust.

In the hectic day-to-day world of running a business and managing those who work for you, you may not give much thought to the differences between an employee and contractor. But treating both groups as though they are the same could possibly land you in hot water. It may seem like an arbitrary distinction in some, but there are distinctions between the two within the letter of the law. Employees are obviously entitled to certain benefits that you aren’t required to give to employees. And your agreements with employees might have different provisions than what you lay out in those with contractors. When dealing with those you have working with you, be sure that you are not treating contractors as you would employees.

Of course, not all businesses are solitary projects. Many entrepreneurs decide to go into business with one or more co-founders. And while it can be great to have someone else to help shoulder the burden and commiserate on the difficulties of startup life, you can’t be sure that your business partnership will always be smooth sailing. It can be difficult to contemplate the idea of a business divorce as you and your co-founders are still in the thrall of your business honeymoon, but it is a conversation worth having before your professional lives become increasingly more entangled. Taking the time to sit down and hammer out a co-founders agreement will help protect both your professional futures as well as the future of your company. There are far too many examples of startups that have hit it big only to be beset by ownership disputes after one founder exits. Having things like ownership and stock options spelled out on paper in clear, unambiguous terms may serve as a stark reminder of the ugliness of business splits during the good days, but it is invaluable to have in preparation for the bad ones.

Join for Free Business Risk Assessment