Small Business Tips 2
One of the greatest benefits of your LegalShield small business membership is having an attorney draft collection letters on behalf of your business. The process of collecting a debt begins long before the attorney drafts the letter. These tips will help decrease the need for collections and help improve the collection process should it become necessary. If you need assistance collecting a debt call your LegalShield provider law firm.
- Utilize a uniform payment policy and include the policy in your contracts and work orders. Make sure the client reads, acknowledges and signs the contract or work order containing your payment policy. Your policy should include an exact due date, name of the individual or business responsible for payment, accepted forms of payment and any potential fees or interest for delinquent payment. Contact your LegalShield provider law firm if you need assistance drafting a payment policy or wish to have your existing policy reviewed.
- Keep a detailed record of customer accounts. Your records should include up-to-date customer contact information, payment history, a copy of a signed contract or work order and any additional correspondence with the customer.
- Closely monitor your records for late payments. Designate an employee to track late payments and delinquent accounts.
- Take immediate action. If an account becomes past due place an immediate hold on the account and contact the customer. The longer a customer’s account is delinquent the more difficult collection becomes.
- Remain professional and friendly in your communication with delinquent customers. It is illegal to threaten or harass a customer who is unable to make payment.
- Document your collection effort. Your records should include letters, emails and invoices, as well as date and time of phone calls. This information will be extremely important should litigation be necessary for collections.
- Call your LegalShield provider law firm. Your LegalShield attorney will draft a collection letter on your behalf. If the letter does not resolve the matter, your provider law firm will advise you on additional legal remedies available to your business
Commercial General Liability (CGL) insurance protects your company if the actions of you or your employee causes personal injury or property damage. CGL also protects your company if someone is injured on your property. The level of coverage your business needs and the premium you will pay depends on the level of risk inherent in your industry. Have your LegalShield provider law firm review the terms of your policy before signing.
- What does CGL cover? – CGL insurance pays for your obligations, such as medical costs for personal injury or repair and replacement costs for personal property damage. In addition, CGL may cover legal fees, as well as possible compensatory and punitive damages awarded in the event of a lawsuit. Legal fees and damage awards can escalate quickly in the event of a suit or mediation.
- How much does CGL cost? – The greater your risk of liability, the higher your premium. Small business coverage can range from $500 per year to $3,000. It is important to shop around, but do not rely only on cost when selecting coverage. Carefully read the policy’s terms. Call your LegalShield provider law firm to have an attorney review the policy and the fine print before you sign.
- What coverage maximums would my business need? – Certain industries like construction, food services and auto repair tend to require higher levels of coverage. Make sure your policy’s maximum coverage limits are high enough to cover the actual cost of any potential liability. If you exceed your maximum coverage amounts your company will be responsible for the remainder. It is possible to purchase umbrella policies that will increase your coverage.
- What happens if I need to file a claim? – Notify your insurance carrier and your LegalShield provider law firm immediately. Make note of the date, time and details of the incident, as well as the names and contact information for everyone involved. Do not sign any documents or agree to a settlement without first discussing the matter with an attorney.
- Do I need any other type of insurance? – Depending on the nature of your business you may need additional insurance. If you have employees, most states require you to pay for workers’ compensation and disability coverage. If your business involves driving or deliveries you may need commercial auto insurance. Some businesses may require product liability insurance. Home-based businesses are not protected by most existing homeowner’s insurance policies. It may be necessary to purchase home-based business insurance. Professional services, such as doctors, lawyers or veterinarians, are often required to purchase errors and omissions insurance, also known as professional liability or malpractice insurance. Talk to your LegalShield provider law firm and discuss the need for other types of insurance policies to protect your business.
Leasing a retail or commercial office space is a significant financial commitment for small business owners. It is vital that you understand the terms of your lease and contact your LegalShield provider law firm before signing any commercial lease. If you have any questions about leasing commercial retail or office space, call your LegalShield provider law firm today.
- Determine a reasonable lease term. New businesses generally should stick to one or two year leases. Starting a new business is uncertain and breaking a lease is both complicated and costly. Your lease should also include an option to renew.
- Location is the most important aspect of storefront real estate. Research the area thoroughly before signing a lease for a commercial storefront. Is the location easy to find and access? Are the interior and exterior visually appealing? How close is the location to your competitors? An exclusivity clause in the lease prevents the landlord from leasing other spaces on the property to competitors.
- Know the full cost beyond rent. Commercial lease agreements may include additional expenses, including utilities, maintenance and janitorial services. Review typical utility fees for the space you are considering.
- Consider the cost and responsibility of maintenance and upkeep. Unlike residential leases, some commercial leases require the tenant to perform maintenance and cover repair costs. If you will be responsible for these costs under the terms of a lease, a thorough property inspection should be completed before you sign the lease.
- Consider the worst-case scenario. What will happen if you are unable to pay rent? It is important to understand the default process as outlined in your lease. Does the lease allow for additional negotiation with the landlord? Are there additional fees for default beyond the amount owed?
- Include the option to sublet in the lease. A sublease provision will allow you to lease the space to another business. The option to sublease will give you an alternative to default should you be unable to maintain the lease.
- Have your LegalShield provider law firm review the lease before you sign. Your attorney will explain the lease’s fine print and point out any potential problems.