The Legal Low Down on How to Protect Your Online Biz
As a mom AND an entrepreneur, there is no doubt that your business and life ‘plates’ are very full. But just like you will do everything to protect your family, your business deserves love and care too – and online business legal protection!
At the foundation of any smart business is a strong legal foundation that will protect you, your business, and your income.
So today I’m going to give you the legal low down on how to protect your online business. As a coach or service-based entrepreneur, there are a few key pieces that you need in place to #protectyourpassion (and your income!) so grab a comfy chair and read on.
A solid 1:1 client agreement
This is THE most important document you need in your business to lay your legal foundation and ideally, you should have this in place before you collect your first dollar. A custom contract outlines the details of your package, what you are providing (and NOT providing) and the policies you have in place.
For example, what happens if your client comes to you after 3 sessions and wants a refund after she has paid in full? Will you give it to her? Will you hold back a percentage as a service fee? What are you legally obligated to do?
One of the other important parts of a contract is having the proper disclaimers in place. A disclaimer, which is really a limitation of liability clause, protects you from legal claims and is basically saying that you will not be held responsible for anything that may happen to your client through the course of your work together.
This is super critical for coaches because of the personal interaction taking place. If you are health coach, it’s vital that your client understands that you are not a doctor giving medical advice. What happens if you offer a smoothie recipe and she ends up in the hospital with an allergic reaction? For business coaches the liability comes more from the financial side and having it be clear in your contract that you are not responsible for ANY financial gains or losses that may occur.
Finally, your contract should include things like: the terms of the package you are offering, protection for your intellectual property, confidentiality, and more! Getting this piece in place is uber important to protect your biz and income.
One of the other key parts of protecting your online biz…is protecting your online home! This is your website. It needs love and legal protections too – plus there are some policies that are legally required to be on there.
The website protections you need can really be broken down into 2 parts:
It is basically a disclosure document, the main purpose of which is to inform (and therefore protect) consumers. Anyone with a website collecting any email or contact information has to have one. Because of California law, if you don’t have one, you can get fined $2500. No thanks. And no, it doesn’t matter where you are, because your website shows up in Cali!
SO PICTURE THIS: You are just starting out and bootstrapping (we’ve all been there) but decide to spend your money elsewhere instead of investing in getting the legal side of your biz setup.
Best Case Scenario: Your website is off the radar and doesn’t get noticed. Worst Case Scenario: You site ends up on the radar and you get a whooping fine – that could range from $2500 to millions (since every hit of your website in Cali is potentially $2500).
This isn’t a complicated policy but one that needs to be there.
Terms of Service + Disclaimers – These documents are about protecting your business and content.
The disclaimers, similar to those in your contract, protect you from liability (that means losing dollars!) should anyone go off the rails and misuse the information you put out there and end up physically or mentally injured.
SO PICTURE THIS: You post a fabulous blog on How to Make Sales Using Facebook Ads. Then comes along Not-So-Smart-Susie. Susie dives into it and spends $950 dollars in 24 hours and blames you.
Best Case Scenario: You lose a reader, customer, potential client. Worst Case Scenario: You get sued for injury or negligence and end up in a lawsuit costing you lots ‘o TIME & MONEY. (But in this case, having the right disclaimers in place can go a LONG way to protecting you)
Of course, there are other important legal pieces to consider in your biz, such as incorporating as an LLC and having the proper Terms of Purchase in place for group programs and live events, but those above are your basics.
You can learn more on my blog over at sarahkornblet.com where I provide you with lots of legal tips, as well as a free guide that will ensure you protect your passion and income. This *legal stuff* doesn’t have to be so scary and once you have everything in place, you will (at least I hear this from all my clients) be sleeping better at night. With your 1:1 contract and website protected you are building your online biz on a strong legal foundation and can feel confident moving forward and doing what you do best – helping your clients!
Note: The information above is education and is not legal advice.
About the Author
Sarah Kornblet, JD, is an attorney for online entrepreneurs. After several years at a law firm and a few career jumps, she ended up falling in love with online business and loves helping entrepreneurs achieve their dreams in a smart and protected way. She is also an adventurer, traveler, runner, and foodie-wine lover. When not at her computer, she loves traveling around the globe and connecting with other online business owners.