Countless stores have had to declare bankruptcy after being named in lawsuits. If you want to protect your same business from the same fate, then make sure you avoid these common mistakes that new business owners often make as they're setting up their companies.
Not having enough liability insurance.
As the owner of a store, you need general liability insurance to protect you if someone were to become injured in your business. Without this insurance, you would be faced with a lawsuit if someone were to become injured in your shop. Make sure your policy offers substantial enough coverage, too. How much coverage you'll need will depend on many circumstances, including the size of your shop, the nature of the items you sell, and the affluence of your area. Insurance consultants or the best lawyers in your area can advise you as to how much liability insurance coverage is necessary for your circumstances.
Not following proper interviewing procedures.
If you're new to the idea of hiring employees, then you might not know that there are certain questions you should not ask in a job interview. These include questions about the interviewee's religion, pregnancy status, political preferences, race, age, disabilities, marriage status, plans to have children, debt situation, and drinking habits. While asking these questions is not technically illegal, it does suggest discriminatory intentions. It's best to avoid asking them. You never know when someone you interview might become offended and bring a discrimination lawsuit against you.
Not fully screening your employees.
If your employees cause trouble on the job, chances are you, as the business owner, will have to carry some sort of legal responsibility for that. You'll save yourself from a lot of legal issues down the road if you're more careful about who you hire. Run full background checks on potential employees. Take the time to call their references. Say "no" to anyone who has a history of drug abuse, violence, or harassment. Similarly, if an employee starts causing trouble on the job, let them go promptly rather than hoping they turn around.
Not having an accountant do your taxes.
You may not intend to file your taxes incorrectly, but if you make the wrong mistakes, the IRS could end up knocking on your door and suing you. As a new business owner, you have so many different hats to wear. It's best to leave the taxes to a professional accountant who can ensure they're done right. Paying an accountant up front is cheaper than paying a tax attorney down the road when you end up in a legal battle with the IRS.