5 Tips on Avoiding Litigation for Small Businesses

As a small business, the chances of getting sued may be higher than you realize.

Statistics show, 90% of businesses are dealing with a lawsuit at any given time. Not only that, up to 53% of businesses are involved in some type of litigation each year. To the small business owner, these statistics show why avoiding litigation is essential.

Depending on the situation, one litigious customer or client can wipe out your entire business. In a few months or weeks, your business can become a statistic, rather than a success.

Fortunately, protecting your business can be as simple as following a few tips. If you are a small business owner who wants to keep their business safe from litigation, here are a few tips to get you started.

     1. Register Your Business Correctly

If you want to protect your business from litigation, it’s important to register your business correctly. While it may be tempting to register your business as a DBA or skip registering it altogether, this leaves your personal finances open to all types of litigation. Add a layer of protection to your business by keeping it separate from yourself.

     2. Know the Rules

Operating as a business requires you to follow certain federal and state rules and regulations. Following these rules is a great way to avoid lawsuits or other litigation. Contact your attorney to have company policies and procedures created that are in line with the rules your business needs to follow.

     3. Practice Ethical Business

While there are frivolous lawsuits, you can avoid many litigious situations by being ethical in your business practices. Avoid cutting corners, misleading your customers, or mistreating your employees. While many of these practices are common, they often result in litigation.

     4. Provide Excellent Customer Service

Did you know unhappy customers can cause problems for your business? Even if the customer is in the wrong, poor customer service can turn a small issue into an expensive problem. To avoid this, consider providing customer service training for employees so they can de-escalate irate customers.

     5. Retain an Attorney

As a small business, hiring a business lawyer is essential. A business lawyer can help you with various business transactions, such as taxes, legal trusts, property rights, contracts, and more. Most importantly, a business lawyer can advise you on how to reduce your risk of facing litigation.

Use These Tips for Avoiding Litigation to Protect Your Business

By using these tips for avoiding litigation, you can protect your business from damaging lawsuits.

Start by registering your business so you have an added layer of protection. You should also know the rules your business needs to follow and make sure to use ethical practices. Provide excellent customer service and retain a quality attorney for your company.

Follow these tips and you can reduce your risk of litigation.

Don’t forget to browse our site for advice on business, health, fitness, and more.