Christmas and the New Year are nearly upon us. For businesses, as with people, the ending of one year and the starting of another is a good opportunity to reassess their position and plan for the coming year (and longer). Here are our top tips for New Year resolutions for your business.
Think about your exit
Most business owners spend their entire time frantically spinning plates and do not devote any time to thinking about their end game.
You should be planning your exit from your business at least five years in advance, to give you time to restructure if necessary.
For most businesses, their exit will either be a handover to family or a sale to a third party or to employees.
Putting your business in the right state for sale will maximise your price and make the sale process as easy as possible.
This could include choosing the right corporate structure for your business or ensuring that your contracts are up to date and appropriate for your business.
Plan for the unexpected
Your business can run when you are there, but what if you were not? How would your business cope?
Put contingency plans in place to ensure that everything goes as smoothly as possible. You may also want to think about insurance policies to give your business some cash to get it over any initial bad patch (whether just for cashflow or to recruit a new person to manage the business in the interim).
If you operate as a partnership or have a number of shareholders, you should put in place or review your partnership or shareholders’ agreement. This will cover both voluntary and emergency exits and can often help clarify things during an extremely stressful period.
Update your contracts
Neither your business nor the law stands still for very long.
Contracts and terms of business and employment are living documents which need review on a regular basis, to ensure that they comply with the current legal position and also reflect how your business runs. You should also ensure that your contract formation process with customers and suppliers works with your terms of business.
Recent case law has indicated how not to do it, when two companies found themselves involved in a contract where neither party’s terms and conditions were incorporated.
If your terms and conditions are not effectively incorporated into the contract, then they (and the protection they give you) are completely worthless.
Getting IP right
Most businesses have considerably more intellectual property than they think.
Even businesses which are not reliant on IP normally have a website, marketing copy and trade marks. They may also have paid for bespoke software, which is integral to their business.
Some types of intellectual property, like trade marks, designs and patents, can be registered in order to give the greatest degree of protection.
Some other forms, such as copyright, do not require registration, but you may need to ensure that you have evidence of how they were created, when and by whom, to make enforcing them as straightforward as possible.
You should conduct an IP audit into your business, listing out all the intellectual property you own.
Once you know what you have, you can work out whether anything needs registration in order to maximise its value and protection.
Following these four steps will ensure that your business is in good health for next year.
By Emma Ladd, senior associate in the corporate and commercial team at Gardner Leader LLP, in Newbury, Thatcham and Maidenhead. Tel: (01635) 508080, www.gardner-leader.co.uk or follow us @GardnerLeader