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Running a business is no simple task – from contracts to employer obligations and privacy matters, it can all be overwhelming. However, if you manage to get everything sorted, your business can reap the benefits sooner than you expect.
As a business owner, some questions that you might ask yourself are:
- What obligations do I owe my employees?
- What type of legal documents should I have?
- Are there privacy regulations that apply to me?
- How can I keep my financing arrangements secure?
But, of course, we don’t expect you to tackle all of this alone.
In this article, we’ll go through some key tips to help your small business stay afloat in 2024.
Get The Right Legal Documents For Your Business
When it comes to business survival, your best starting point is looking at your documents.
Contracts are one of the most important factors when it comes to any business as they set out the key terms of any arrangements you might have and they essentially act as records of your engagements. This way, if anything goes wrong, you can refer to those agreements and follow a process that all parties agreed to before they signed.
If you have weak contracts that don’t fully support your best interests, it can be difficult to come back from this when something goes wrong.
On the other hand, having strong and secure contracts in place can be extremely useful when navigating through a complex situation, and is usually the first step to protecting your business when entering into any agreement with another party.
As a small business in 2024, one of the first things we recommend doing is reviewing your business’ contracts and other major legal agreements. Certain things you could ask yourself as you comb through the agreements are:
- Will this agreement be terminated anytime soon?
- Am I getting the most out of this contract?
- Does this contract benefit both me and the other party?
- Is there anything that can be reviewed or adjusted to better suit the needs of all parties?
- Is this agreement still relevant to my business?
- Does this agreement contribute to the future goals of my business?
In many cases, lawyers are able to identify key clauses in business contracts that put you in an unfair position, or do not serve your best interests. At Sprintlaw, our contract lawyers can chat you through your options and help you draft contracts that are tailored to your business’ needs.
Alternatively, if your business is undergoing changes or restructuring, it’s wise to consult a lawyer who can ensure your documents are updated and can continue to work for you moving forward.
Learn more about our Contract Review & Re-draft package to protect your small business.
What Legal Documents Your Small Business Needs
We’ve spoken about the importance of having strong contracts in place, but what type of contracts are we talking about?
No matter what type of small business you are, you should have strong key legal agreements.
For example, if you’re hiring employees, you should have a strong Employment Contract in place which sets out:
- The nature of the work to be performed
- Salary
- Termination
- Non-compete clauses
- Confidentiality clauses
- IP ownership
The above terms are the most common clauses to include in a standard Employment Contract, but each business is unique, and your contracts should reflect these differences. Our Employment Lawyers have a wealth of experience and can assist your business with legal compliance – but we’ll touch on Employment Law again later!
Another key document that most small businesses have is a Non-Disclosure Agreement. Protecting your business’ confidential information is one of your biggest considerations, especially with the recent data breaches affecting Medibank and Optus.
A Non-Disclosure Agreement, once signed, binds the relevant parties to a legal obligation to not disclose certain information. This is especially important if you’re in the early stages of your business journey and you’re sharing highly sensitive business information with a select group of people (such as contractors!).
If you want your business to come out strong in 2024, you need to ensure your legal documents act as both a proactive protective measure and a safety blanket for your small business.
Unfair Contract Terms
When it comes to contracts, it is also important to be aware of any unfair contract terms. In accordance with the Australian Competition and Consumer Commission (ACCC), unfair contract terms are unlawful. Recently, they’ve doubled down on this and introduced new regulations that increase the penalties for those caught utilising unfair contract terms.
The ACCC defines unfair contract terms as any clauses that:
- Are not necessary to protect the interest of the relevant party
- Gives one party a disproportionate advantage over the other
- If it were to be enacted, it would be detrimental to the other party
If you’re unsure as to whether your contracts are legally compliant with the ACCC’s regulations, chat to one of our lawyers for an Australian Consumer Law consultation.
Meet Your Employer Obligations
As an employer, you’ll need to be up to date with all your legal obligations towards your employees.
As of 2024, there are a lot more remote and hybrid work options than there were before the pandemic. If you’re utilising the ability to work remotely, then it’s important to ensure your employees are in a safe environment, even if you have no direct control over their environment.
To elaborate, let’s say you have employees that are working from home. For employers, it can be confusing to determine how your workplace health and safety obligations should play out. The absence of a traditional work environment doesn’t minimise the need for safe work practices and procedures. Employees are still at risk of discrimination, work-related injuries and mental burnouts. Providing the right resources and having strong policies in place is a step in the right direction.
You might also want to encourage your employees to take time for their mental health. The current economic climate hasn’t just put pressure on businesses, but individuals are feeling the strain as well. So, it’s encouraged for employers to have the resources available for employees in case they want to reach out and talk.
Award Compliance
Another thing to look out for as an employer is ensuring your employees are receiving the correct entitlements under the relevant award (if it applies!).
Awards, wages, leave and entitlements all need to be sorted according to the individual employee, their qualifications and the industry you operate in.
Fair Work Australia has set the standards and minimum requirements that employees need to receive. It’s important to check these and keep up with any changes. For instance, Amendments to the Professional Employees award 2020 introduced new regulations impacting how employers are to record and pay employees that engage in overtime work across certain industries.
Awards are an important regulatory compliance consideration for employers, and they are always subject to change. As such, it’s your responsibility to keep up to date and ensure that your business agreements reflect the requirements of the applicable award.
If you need help, learn more about our Award Compliance package where an expert lawyer can chat you through ways you can comply with your relevant award.
Data And Privacy Obligations
Data breaches have been a hot topic lately, especially after the major breaches in Optus and Medicare which left people concerned about the safety of their information.
Here at Sprintlaw, we’ve been getting numerous inquiries from businesses regarding data privacy. Thankfully, we’ve got you covered.
Generally speaking, any business that collects personal information from customers or clients have several duties regarding the collection of that data. More specifically, under the Privacy Act 1988, you’re required to have a Privacy Policy in place which discloses:
- What information you’re collecting
- How you’ll be collecting it
- Who you’ll be disclosing the information to
- How you’ll be storing that information
- The reasons for your collection of that information
While the Privacy Act usually only applies to businesses with an annual turnover of more than $3 million, we still highly recommend having a Privacy Policy in place regardless of this threshold due to the high risks involved in personal data collection.
In addition, if your business grows and expands, it’s reassuring to know that your business is already prepared with the right protective measures.
Once you’ve got a Privacy Policy set up (or already have one), then it’s important to think about other ways you can protect your internal systems. Think about encryptions, password protections and firewalls – you might even consider getting an IT professional to help out with this.
Aside from the technological aspect of protecting data, your workplace policies should also aim to keep data protection in mind. For example, you could limit the level of access certain employees have to business data, regularly update the systems and train employees in identifying anything that could be a potential threat.
There are no guarantees that taking safety measures will completely prevent any data breaches from occurring. Unfortunately, there’s always a possibility. We’ve put together this guide on how your small business can build a strong cyber security system.
Financing Your Business
As a small business, financial planning is a necessary skill. From knowing where to place the business’ capital to getting potential shareholders to take an interest in the business, financial planning is key to growing your business.
Financing your business is a lot more than just getting the money in. You also need to make sure everything is in writing and that agreements are in place with the right parties. For example, your business may need to get a Term Sheet for your capital raise to confirm all the details.
Alternatively, if you’re a startup, you may look into getting a Convertible Note if you’re considering debt finance that will later turn into equity. The documents you need all depend on how you’ll be financing your business, so it’s best to chat to one of our legal experts to ensure you’re doing it right.
If you’ve already got documents in place, then as 2024 moves ahead, it’s wise to get these reviewed. For example, a Shareholders Agreement is an important agreement between shareholders of a company. As things change, you want to ensure that your agreements reflect any updates and changes to your structure or the way things are run.
If raising more capital for your business is something that is on your mind, then getting legal help from a professional is a great first step in protecting your business from key risks. Our Capital Raising Package can equip you with everything needed to get the funding required for your venture.
Things Your Business Should Look Out For
The current economic climate makes it difficult to determine what’s next for small businesses. Forbes reports many business owners being pleasantly optimistic about their future, however, it all really depends on the industry as well as the individual business.
As a business owner, it’s a good idea to sit down and assess the current market. Take a look at your business operations, finances and everything else that’s important. From there, you can make any changes or cutbacks that might be necessary going forward.
We know this can be a lot to consider, so it’s best to speak to a legal professional who can help you map out the key risks for your business. The right guidance can really go a long way – chat to our Online Business Lawyers for a consultation on your options moving forward.
Key Takeaways
Small businesses can both survive and thrive with the right kind of planning, guidance and legal protection. If you require any assistance, our legal experts are always happy to help. To summarise what we’ve discussed:
- Ensure all of your contracts and legal agreements are working for you
- Keep up with your employer obligations, such as award compliance
- Take active steps to secure your business’ data
- Plan your business’ financial future with the right agreements
- Protect your business with insurance
If you would like a consultation on surviving as a small business in 2024, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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