Joe Fournier

4 Common Pitfalls For Small Business Owners

Starting your own business and making it grow is one of the most terrifying – and exhilarating – things you can do. Not only is it a huge leap in the dark with respect to your financial situation and lifestyle, but it also requires you to make a lot of decisions about how you are going to actually run the business. Here are 4 common issues that many of our small business clients encounter, particularly as they grow and become larger businesses:  

1) Choice of Entity

This is an important decision when starting a new business – to set up as a corporation, partnership, LLC, or sole proprietor.  The answer involves many factors, including the type of business, industry, number of employees, number of partners, and long-term plans. It may be helpful if you review these factors with an experienced lawyer and/or accountant to determine the right structure for your business.

2) Employees v. Independent Contractor

Another common issue, and one with potentially enormous long-term tax and legal implications, is whether the people who work for you are considered employees or independent contractors. If you make a mistake here, the consequences can be disastrous.

3) Non-competition and Non-solicitation

Many industries are both highly competitive and afford for employee mobility.  As a business owner in one of these fields, you need to make sure that the people you hire do not hurt your business if they leave.  Agreements not to compete and not to solicit clients or other employees may be enforceable, but only in certain circumstances and only if drafted properly, with reasonable restrictions on geographical distance, time duration, and scope. 

4) Conflict Resolution – Settle or Fight

If you own a small business, then you will have to deal with this issue some day.  Many conflicts arise with former employees or over customer contracts. The simple solution is to avoid expensive and unpredictable litigation if possible. It will be helpful to have an attorney on your side who can help you navigate through conflict issues, while keeping eyes both on the bottom line and the result that you want to see. 

For assistance with any legal needs related to your business, or any other business or estate planning needs, contact Fournier Legal Services for a free consultation at or 860.670.3535.