As the owner of a business, you may have heard this, or a variation of this, from your friends, family, or even customers. When many people think of business owners, images of wealthy CEOs come to mind. They may picture you relaxing on your yacht while your many employees toil away, making millions for you. The reality, of course, is much different. You actually work long after everyone else has gone home, worrying about how to pay the bills. Your work week is not 40 hours; it is 60 or 80. As a Suffolk county locksmith, you may be called at any time, day, or night, and be expected to drop everything and help a customer. If you don’t, you may get a bad review, and that customer surely will not refer his friends. If an employee doesn’t make it to work, you have to cover for them. If you own a restaurant, you are the cook, waiter, janitor, and bartender. Most business owners love what they do, but it is still hard work.
How can these misconceptions hurt you? Unfortunately, the mistaken belief that you are independently wealthy can lead some people to try to take advantage of you. When setting up your business, make sure to take the steps necessary to protect yourself from lawsuits. Talk to a business attorney about setting up a business entity that will provide a layer of protection between your personal assets and your business. Manufacturers like Lee Spring or Pico electronics usually choose to incorporate, while owners of small, service-based businesses may choose to form an LLC or partnership. A local attorney and/or accountant can advise you on the best type of entity for you.
Business insurance, of course, is essential, even if you are running your business from your home. The misconception that all business owners are wealthy can cause opportunists to initiate lawsuits in the hopes of getting a large payoff. Do not assume that your homeowner’s insurance will cover you for business-related claims. Policies typically exclude property used in a business, so your inventory, supplies, and business machines may not be covered if they are stolen or damaged. Those assets may also be vulnerable if you are sued.
Business insurance is also necessary to protect yourself against liability for injuries. Normally, injuries to guests who visit your home are covered by homeowner’s insurance, but when you are running a business from your home is it important to check with your insurance company before assuming that your policy covers injuries to customers or clients on your property. The time to find out is before an incident happens.
Most people are not looking to take advantage of you, of course. Most of the time, you can correct misconceptions about your status as a member of the one percent, and maybe educate your friends about what owning your own business is really like. For the few who do want to take advantage of you, some simple precautions will protect both your business and your personal assets.