diego-salinas-345402-unsplashThe early days of a business are a hectic time for any entrepreneur. Almost all of your time and energy is spent trying to get your business off the ground, often by yourself. Your worries tend towards the basics of keeping the lights on as well as figuring out how to grow. But as your business starts to develop and move beyond these early stages, you will start to run into new challenges and new areas of concern. As new opportunities present themselves, so will new risks that need to be mitigated. Taking the proper precautions to address that risk can help you feel secure in the future of your company while you continue to grow.

After spending so much time and effort handling every aspect of your business yourself, it can be tempting to ask new employees or contractors to dive right in to help handle the workload. But throwing your new hires in right away can be a risky move. Even though you’ve aimed to hire the best and brightest and hopefully most trustworthy, you want to make sure that you’ve handled the important administrative tasks that can keep your business protected. Even if you’re not alone in starting your business and are working with a co-founder you trust, you still have to make sure that your own future and the future of the company is safe.

Employee and contractor agreements

When you bring in someone to work for your company, it’s a logical assumption to think that any work that person creates while in your employ belongs to you. But the laws regarding this aren’t quite so straightforward. Without a written agreement between you and your employee or contractor, there is a risk that you don’t have ownership of the work they created for you should they leave your employ.

Before you put your new employees or contractors to work, make sure that they have signed a written agreement that assigns the rights to their work to the company. More than an option or something to worry about at a later date, it is a necessity for every business, so make sure that everyone who works for you has signed a written agreement.

How strict you want to make your agreement is something that you have to try and figure out. Some employee agreements stipulate that the company owns work that their employees create even in their off hours (which can cause an issue for startup founders who work a day job.) While you don’t necessarily have to be that strict, it is important to be deliberate and precise with what you put in your agreements. To that end, you don’t want to use a generic template that you find online. Spend the money to have an attorney review your agreement to make sure you’re covered for all contingencies and that it meets your state’s employment laws.

You can read part two next week.

 Join for Free Business Risk Assessment