Did you know that the average U.S. small business owner is 60 years old? If you are like many business owners, you are nearing retirement age and starting to think about your future. You may be thinking about selling your business sooner rather than later because you have concerns about the effects of COVID-19 or because you simply do not want to continue investing so much time and energy into the business. Whatever your reason, choosing to sell your business and retire is a major decision. It is important to define clear objectives, properly prepare for the sale, and take steps to avoid mistakes that could delay your retirement.   

Preparing Your Business for Sale

As the old saying goes, failing to prepare is preparing to fail. Although you may be eager to sell your business so that you can pursue your retirement dreams, it is important not to rush this important transition. One of the most essential steps you will need to take is to secure an accurate business valuation. Properly valuing your business may be complicated – especially if the business’s revenue is down because of COVID lockdowns. A qualified business valuation professional will help you determine how to put an appropriate price on the business. You have probably poured a tremendous amount of your time and energy into growing your business. You deserve to get the best price possible.

One of the most important decisions you will ever make as a new business owner is choosing a business entity or business structure. Although making this decision may not be as enjoyable as choosing a business name or making decisions about products and services, it is an absolutely crucial aspect of starting a new business. Many new business owners find themselves in deep legal and financial trouble after choosing a business structure that does not fit their ambitions and needs. This is why it is essential to make an educated decision when choosing how to structure your business.  

Types of Business Structures

The type of business structure you choose will have a major impact on how the Internal Revenue Service (IRS) taxes your business revenue. Your business structure will also determine your level of personal liability for business losses. The most common types of business structures include:

Effectively using business contracts is an essential part of growing a successful small business. A non-disclosure agreement (NDA), also called a confidential disclosure agreement or confidentiality agreement is a contract that prohibits the participating parties from sharing sensitive information. Business owners may use NDAs when disclosing confidential information to employees and consultants, during business sales or purchases, and when meeting with potential investors. However, a non-disclosure agreement is only beneficial when it is executed accurately and does not contain major mistakes. This is why it is best to work with an experienced business lawyer when drafting non-disclosure agreements and other types of business contracts.  

The Basics of Non-Disclosure Agreements

In an ideal world, a business owner would be able to simply ask an individual not to share the sensitive business information to which he or she is privy. Unfortunately, this is not how business dealings work in the real world. The best way to prevent confidential information from being used against a business is to have the party receiving the information to sign a legally binding confidentiality agreement. A business owner may use an NDA to protect:

If you are a Connecticut business owner or soon will be, you may have countless tasks and obligations on your mind. You may be developing a business plan, working on marketing strategies, researching your competition, meeting with investors, drafting contracts, and more. However, one issue you may not have yet considered is how you will protect your intellectual property. You have probably spent a great deal of time and energy developing your business ideas, marketing slogans, website design, logos, and other business material. Protecting these types of intellectual property is a crucial step in forming a successful business.

Understanding Trademarks

The three main legal tools for legally protecting intellectual property are trademarks, patents, and copyrights. A trademark provides protection against other parties’ use of certain symbols, words, phrases, or designs that identify your products or services. You may want to trademark your company’s name, the brand names of products and services, the business’s logo, marketing slogans, and other brand-specific intellectual property. Because you will likely need to register each of your trademarks separately, securing trademark protection can sometimes be a challenging task. An experienced business attorney can help you understand what types of material you should trademark and how to accomplish this important legal process.

Well-written business contracts are essential to a company’s success. Although business transactions would likely be much simpler if parties could simply be trusted to keep their word, this is unfortunately not how the business world actually works. Entering into major business agreements without a legally binding contract can be disastrous. Business contracts are used to formalize employer-employee relationships, purchase agreements, loans, and for a wide range of other purposes. When a party violates the terms of a valid business contract, the injured party may file a breach of contract claim. There are several remedies to a breach of contract claim that the injured party may be entitled to, depending on the circumstances.

Collecting Damages or Restitution Through a Breach of Contract Claim

The main remedies for breach of contract include monetary damages, restitution, specific performance, rescission, and reformation. Damages refer to the compensation that an injured party may recover through a breach of contract claim. When a contract is completely breached, the injured party, or plaintiff, may receive damages equal to the value he or she would have received if the defendant had honored the contract. If the contract was partially breached, the injured party may be awarded partial damages. Restitution is another remedy that intends to restore the injured party to the condition he or she was in before the contract was signed. Instead of being compensated for lost earnings, the goal of restitution is for money or property that was given to the defendant to be returned to the plaintiff.

If you are a business owner, you know the vital importance of setting clear expectations for your employees. When a business is in its infancy and only has a small number of employees, you may be able to get away with verbally expressing rules and expectations to your workers. If you are heavily involved in the day-to-day operations of your business, it is easy to keep a watchful eye on employees to ensure that they are not exposing you to any liabilities. However, as your business grows and develops, the need for a written set of guidelines and expectations becomes critical. Creating an employee handbook that states employment policies, company rules, and how workers are expected to behave at work will help prevent employee-related disputes in the future.

Why You Need An Employee Manual or Handbook

An employee handbook contains a company’s practices, policies, and the legal rights and obligations of employees and their employer. Not only can this type of handbook protect you as a business owner legally, but it can also significantly improve the work environment. Many of us have had jobs where we were unsure of our role in the company or what was expected of us. It can be confusing and disheartening to be an employee and not feel like part of the team if other employees are not on the same page as you. An employee handbook can go a long way in establishing a culture of teamwork and professionalism at your company.

Business dealings often involve the exchange of highly confidential information. A non-disclosure agreement (NDA) is an effective way for business owners and entrepreneurs to protect sensitive information from being shared or misused. An NDA is a legally enforceable contract that establishes a private relationship between two or more parties. The involved parties agree not to share or profit from confidential information to which they are made privy. NDAs, also called confidentiality agreements, are a valuable tool for businesses.

Non-Disclosure Agreements For Business Negotiations

Non-disclosure agreements can be used to protect sensitive information that is shared during business transactions, such as the buying or selling of a company. For example, if a business owner is interested in selling his or her company, he or she will almost certainly meet with potential buyers to discuss the business in detail. A potential buyer may have access to proprietary information, product designs, marketing strategies, trade secrets, business practices, and other information that could be used as leverage in other business dealings. Asking a potential buyer to sign an NDA prevents the buyer from misusing sensitive business information or sharing that information with others. If a party signs a confidentiality agreement and then violates the terms of that contract, the injured party has the right to seek financial compensation for breach of contract.

The two most common types of NDAs are unilateral NDAs and mutual NDAs. A unilateral NDA is a contract where only one party agrees not to disclose sensitive information. In a mutual NDA, all of the parties involved agree not to share certain confidential information.