Your business is running along smoothly and it is beginning to expand. Orders are up, goodwill is increasing and the workforce has grown. At this point you don’t recognise the business that you started a short while ago, and your business plan has proved a success.
But this success is not an excuse to sit back and rest on your laurels. You have to consider the effects of the expansion on your business.
You have more employees, you have an increasing number of intellectual property rights to protect and you have to cope with an increase in work in progress. Is the business infrastructure suitable and are your legal documents sufficient to cope with this growth?
Some of the key areas you may need to consider are:
- Employment – do you need to revise your standard employment contract? Are your staff handbook and employment procedures adequate? Are there any possible TUPE implications for new contracts acquired from a competitor? Have you facilitated access to a stakeholder pension scheme to your employees?
- Intellectual Property Rights (IPR) – have you registered the business brand as a trade mark? Do you own the rights to your website? Are confidentiality agreements in place for large contract tenders? Do you use materials in your business that have been created by others?
- Litigation – do you have any claims against your business? Are you making any claims against suppliers? Are any clients late on making their payments and require debt collection actions?
- Management matters – do you have the necessary steps in place to protect the business should a key manager be unavailable through absence, ill health or death? It may be suitable to put in place life insurance policies and powers of attorney to minimise business disruption. Are your existing restrictive covenants applying to key managers still sufficient?
- Property – does the business need to relocate to be able to satisfy projected sales? Will the existing lease/licence allow the business to vacate its existing premises?
- Business activity – are existing agreements still suitable for the operation of your business? Is there a need for the business to engage agents and distributors? Is the business operating internationally and do the terms in contracts reflect this?
- Further investment – the business may need a capital injection to aid expansion and to meet business demands. See Further investment for more details.
The review and management of internal procedures can help with many of these issues. In particular, good credit control mechanics may help your business avoid the need for debt collection (for example, monies in advance of delivery of goods or services). However, some of these matters will require external guidance and you need to make sure that you have a clear picture of the direction of the business to help you achieve effective advice that remains relevant for the future.
Read on - The middle: Further investment
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