2004 Fall/Winter Volume No. 4
What Happens to your Business if You Face the Dreaded…
“You never know when your luck is going to run out.”
What would happen to your business if you should die, get divorced, face bankruptcy, wind up in a nasty lawsuit, or fill-in the blank________________—any other of the worst case scenarios you can imagine?
There are numerous dangers that could destroy your family business. While you may hope none of these things ever happen, the simple truth is you never know when your luck might run out.
So how do you protect what you have for your family today, and pave the way for other family members to continue the business when you are gone? The answers are two-fold: 1. Carry adequate business insurance, and 2. Legally structure your business to minimize business liabilities.
While you may think that insurance alone is enough, there are numerous risks where insurance alone can’t help. In most cases insurance won’t help if you are clearly at fault. It won’t protect you from a disagreement with your business partners or family members, and it won’t protect you from the IRS or other creditors. Protection from these dangers can only be found in your company’s legal structure.
The benefits of a well-conceived legal structure could be to shelter your personal assets from lawsuits, to protect your savings from bankruptcy, and to preserve your business for future generations.
Your legal structure may be the most important thing you do to minimize risk, perhaps even more important than insurance! And yet, few small businesses take advantage of partnership and corporation laws. This common oversight could mean losing your business if you bump into the worst-case scenario.
Most small businesses run as sole proprietorships or general partnerships, because they are easier and less expensive to set up.
Many people believe that a sole proprietorship is all they need when starting out, because their risks and assets are minimal at first. This assumption could be a big mistake for a portable sanitation operator. As soon as your trucks go out on the road and your restroom units are placed into service, your liability becomes a very serious issue.
Click here for a listing of companies offering Trucks & Accessories, Decals, Financing, Restroom Trailers, Trade Publications, Marketing, Restroom Manufacturing/Sales, Billing/Routing Systems and Insurance.
Click here for more information on effectively marketing your business to special event coordinators, and construction and agricultural businesses.
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