As a business owner, there is nothing more exciting than seeing the growth of your business and the potential opportunities and space it creates within the market.
However, it is easy to get caught up in the euphoria of success and lose sight of your business goals and assets. At this point, asset protection becomes crucial to the longevity of your business growth and provides the basis for protecting shareholder value. Below, are our top five tips for protecting your business value during a period of fast growth:
Protect your brand and ideas
Your intellectual property (brand, logo, products and services provided by your business) can be your most valuable company asset. If unregistered your IP is vulnerable to imitation or exploitation diminishing your competitive advantage in the marketplace.
It is important registered rights are registered in the name of the company and not in the name of an employee, director, or shareholder and that they are managed properly. If you have any non-registrable intellectual property, it is paramount that it is protected contractually, whether through your terms and conditions of business or service agreements or by separate agreement to ensure everything is in the right place.
Lock in your key employees
At the heart of any business is its employees. In today’s fast-moving economy, retaining talented employees is becoming increasingly difficult. The requirement to recruit new management detracts from time spent on growing your business costing you time and money.
Secure your employees by introducing tax-efficient long-term incentive plans to retain and incentivise talent. If you take care of your employees, they will take care of your business in turn!
Secure your revenue stream
At business inception, owners often fall into the trap of arranging business agreements based on strong relationships, goodwill and verbal confirmation of terms. A lack of clear terms can often lead to disputes which can be costly and erode goodwill with customers and suppliers (and even affect your brand). Ensuring your key contracts are accurately documented and provide clear terms on delivery, pricing, service level requirements, and contractual periods will help avoid disputes.
Fight off the competition
The business world is highly competitive. To minimise the effects of potential competition and to place your business in a strong commercial position, it is crucial to ensure your contracts restrict your employees, customers, suppliers, partners and shareholders from competing against the business. Any confidential information (trade secrets, customer lists, manufacturing processes, or other confidential information) should be protected with non-disclosure agreements with any third parties who have access to this information, such as employees, contractors, or investors.
Shareholder arrangements
Having a properly drafted shareholders’ agreement and articles of association ensures changes to internal business relations do not jeopardise business success. A shareholders’ agreement governs the ownership and management of the business and protects the company and its shareholders. Should a shareholder wish to leave the company, this agreement is crucial to ensuring the company value is retained.
This article was originally published by TheBusinessDesk.com.
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