Small business owners have a lot of things to worry about, but losing their assets should not be one of them. Protecting themselves from liability is a big part of making sure that a small business owner's personal and business assets are not at risk. There are several things that small business owners can do to protect themselves and their assets from the financial ruin associated with a liability lawsuit.

The list of things that can affect a small business owner and their assets is endless. Here are just a few of the more common challenges that may threaten their stability and financial success:

  • Contract disputes
  • Accidents
  • Divorce
  • Economic ups and downs
  • Reckless employees
  • Untrustworthy partners
  • Employment law violations
  • Malpractice
  • Default or non-payment of financial obligations
  • Tax problems
  • Personal liability

No matter how big or small the business is, small business owners and their assets are at risk if there are no protections in place.

Here are 7 things that small business owners can do to reduce their vulnerability and protect themselves against litigation.

1. Planning Ahead

Each small business is unique, so making specific plans for the future is imperative for all small business owners. In other words, different types of businesses are more likely to be open to different types of litigation. From slip and fall accidents to malpractice, and everything in between, business owners need to understand what they are most vulnerable to.

2. Don’t Wait to Protect Assets

The time to arrange and organize a small business owner’s assets is now. In other words, when problems strike, it’s too late. Business owners must implement a strategy to protect as much of their assets as possible long before any unfortunate situations arise. The goal is to be less vulnerable to lawsuits at any given time, because once the suit is filed, it is nearly impossible to start.

3. Regular Inventory Accounting

Experts recommend that small business owners keep a regular inventory of all assets and debts, and update them semiannually. Everything of value should be included in the inventory.

4. Don’t Personally Guarantee Debts

Small business owners should always avoid guaranteeing debts via personal responsibility because this opens up their personal assets to scrutiny. While some small business loans do require this, business owners should always avoid it if there is a choice.

5. Business Contract Care

Small business owners must be cautious with contracts, because they can have hidden language that is not favorable to them. If there are any questions about a contract’s reach in the event of a problem, business owners should get clarification. Also, it should be clear that the business owners are offering their signature as a representative of a business, not as an individual.

6. Learn State Laws

Different states have enacted laws that help small business owners protect their assets, both personal and business. It’s critical for small business owners to know how they are protected legally and what aspects of state law are small business-friendly and which are not.

7. Consult With Experts

Small business owners are rarely experts in high financial matters like asset protection, and that’s why they really need to consult with professionals who can look at the unique details for every small business and work out different plans to best protect the owners and assets.Small business owners should make every effort to be prepared for what might come from unseen or unfortunate circumstances. The best plan should include asset protection and everything that organizing themselves financially entails. By acting as soon as possible and using a professional to aid them in setting up their business and personal assets, small business owners won’t be blindsided when the inevitable happens.

Author's Bio: 

Jackson Cooper is a investment & finance enthusiast, involved with the experts at American Society For Asset Protection. Look to American Society For Asset Protection, true leaders in the professional Asset Protection industry, to properly guard your assets from lawsuit & litigation. Connect with them on LinkedIn, Facebook. Learn More On YouTube