While there are no guarantees in life, you can prepare your startup for potential bumps in the road by being aware of how these situations arise and mitigating potential risk. Here are some common unexpected situations your startup might face:
1. Intellectual property disputes
Intellectual property consists of intangible property like ideas, designs, songs, and writings. Whether you choose to file the paperwork or not, your intellectual property is automatically copyrighted and subject to the laws governing copyrighted material.
You need to be prepared for two possibilities: that someone else might unlawfully use your intellectual property, and that you might be unlawfully using someone else’s intellectual property.
With the exception of what falls under “Fair Use”, nobody can use intellectual property without permission from the author. This includes reprinting passages from books, using songs as background music, and even posting commonly found images and graphics to a website.
Know what “Fair Use” is
Many people mistakenly believe they can use copyrighted material as long as they’re not making money from its use, but that’s one of the fastest ways to wind up in court.
While most non-commercial use falls under the “Fair Use” rule, many people unrealistically designate their use as “non-commercial” when it’s not, and end up being sued for copyright infringement.
Google is not a source for free images
Many people believe that when something is posted to the internet, it’s free to use. Unfortunately, that’s not true. While it’s easy to find any image you want on Google, those images aren’t up for grabs. The copyright belongs to someone, but because copyright violation is expensive to pursue, most businesses let it slide unless it becomes a huge issue.
Also read: Free stock photo startups are finding their place among giants, and complementary nature of services means that consumers win
Get permission in writing
If you find materials from outside sources that you want to use for your business, you should always get permission in writing from the creator to avoid any issues.
Remember that copyright violation can go both ways and you need to prepare for being on both sides of the situation. In addition to familiarizing yourself with how to pursue a copyright claim against another party, you should have a policy that requires your staff to get permission to use all images and content they source, even when all they’re doing is posting it across social media. It’s not worth the risk.
2. Injury claims
Whether your startup consists of a small office or a full-scale retail location, you’re always at risk for a potential injury claim, not just by your patrons but by employees as well. That’s why it’s imperative to follow every safety standard and regulation for your industry without cutting corners.
In 2015, more than 4,800 workers were killed on the job by falling, being struck by an object, electrocution, or being caught in between equipment or materials. Additionally, tens of thousands of workers are injured every year on the job in accidents that could have been prevented if more safety precautions had been followed.
Personal injury claims aren’t cheap, and if you’re not prepared, you could get blindsided by multiple expenses, including medical bills that could last years.
It’s advisable to have an adequate amount of liability insurance no matter what kind of business you run, but your first priority should be to do everything you can to ensure the safety of your employees and your patrons.
3. Labor law disputes
A labor law dispute is often just around the corner for every company at some point in time. You might think you’re doing everything by the book, but labor law isn’t always easy to understand. For example, in California, an employee can voluntarily waive their unpaid 30-minute meal break if they do so in writing, but only for shifts of 6 hours or less, and only if the nature of the job prohibits the employer from providing a bona fide meal break. Very few businesses actually meet this requirement, yet many businesses continue to have employees sign a meal waiver as a condition of employment and end up in court over it.
Here are ten ways to keep your startup compliant with local, state, and Federal labor laws.
Don’t interpret labor law without a lawyer
Depending on your state, penalties for break violations can add up on a daily basis. Since labor law disputes are one of the most common issues to arise in any business, always consult a lawyer about your policies, especially the way you distribute breaks.
4. Employee theft
At some point or another, you’ll probably have to deal with an employee theft situation. Whether it’s money, goods, or equipment from the back office, you need a way to crack down on this before it becomes a problem.
It never hurts to have cameras in your office, or in rooms where expensive equipment or proprietary information is stored. It’s also a good idea to let your employees know the cameras are there so that anyone considering theft will think twice.
If this situation does occur, have a plan for how you’ll handle it. Depending on the severity of what’s been stolen, you may want to talk to the person before you have them arrested. You don’t have to keep them as an employee, but pressing charges against someone for stealing a box of paperclips might not be worth your time. As a side note, if you do catch someone stealing paperclips, don’t just dismiss it. The fact that they’re stealing anything should be a red flag.
As a startup, these are just some of the challenges you may face, and the more prepared you are, the better. Being prepared takes away the anxiety and stress that comes from the unexpected.
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