Easy Ways To Protect Your Assets As A Business Owner
Wanting to be your own boss and own your own business is a common dream for many people. Unfortunately, after putting forth the time, money, and effort to achieve this goal, unexpected problems can arise that jeopardize all your hard work. Asset protection strategies help to prevent this from happening and are relatively easy to implement.
How To Protect Yourself And Your Business
Operating a successful business takes creativity and determination. It also requires being able to foresee potential future problems and prevent them from happening. Not taking certain precautions increases the odds that your business will fail. According to the U.S. Bureau of Labor Statistics, more than 20 percent of new businesses close their doors each year while less than 50 percent remain in business at the five year mark.
Downturns in the economy and unexpected events can put a dent in your profits, jeopardizing both your business and your personal finances. The following are steps you can take now to prevent this from happening:
Make sure you are adequately insured: General liability insurance can prevent you from paying out large amounts in legal judgments if professional disputes arise. Property owners insurance can protect your inventory and reduce out of pocket costs in the event acts of vandalism, extreme weather, or personal injuries on your property happen.
Select the right type of business entity: Even with insurance in place, you could still be held liable for damages, taxes, and financial losses due to downturns in business. Review the various types of business structures in New York State and select the one that provides the best protection and is best suited for your particular situation.
Keep your personal and business accounts separate: If you own a small business, it is very easy to end up paying business expenses out of personal accounts. Be vigilant in avoiding this, as it can make you both personally and professionally liable for unexpected costs or if the business fails.
Be vigilant in terms of contracts and business procedures: Sloppy bookkeeping and neglecting to use formal contracts in dealing with suppliers or clients puts you at risk in terms of business losses and professional liability.
Have the appropriate estate planning documents in place: In addition to a will, trusts, and other estate planning documents that address business succession in the event something happens to you, be sure and name someone to act as your power of attorney. Provide clear instructions on how your business should be managed in the event an accident or illness leaves you temporarily incapacitated.
Contact Us Today for Help
At Cavallo & Cavallo, we provide the professional legal representation business owners need and can advise you on ways to reduce your personal liability. To speak with our experienced Bronx & Westchester estate planning attorneys, call or contact us online and request a consultation in our office today.