BECOME A LEGALLY SAVVY BUSINESS OWNER

So you’ve decided to take the leap and start an online business – congratulations! Depending on where you are in your business setup process, you may have a website and products or packages available for purchase, or you may still be sorting out what type of business you want to start. Wherever you are in your entrepreneurial journey, there is one thing that you MUST keep at the front of your mind. In addition to the more “fun” stuff, like figuring out your program and package offerings, working with clients, and having six figure launches, it is also vital to remember this:

You are starting a business, and are now a business owner. As a business owner, you’ll need to ask yourself – is your business legally compliant??

If you haven’t thought about this, or haven’t taken any steps to ensure your business is legally compliant…don’t panic! No time like the present, right? As business owners, there are a few key steps we need to take in order to make sure we are properly protecting ourselves and our business, as well as our clients. We must also make sure we aren’t infringing on or negatively affecting any other businesses as well, in order to avoid legal fines and fees. As an attorney and legal resource for online entrepreneurs and coaches, I am here to help you through this process, and Uncomplicate the legal side of your business, to get you squared away and stress-free! In order to get you on the right track, here is a quick rundown of what you need from a legal standpoint.

WEBSITE COMPLIANCE

As an online business owner, one of the first things you’ll likely do is set up your website! This will become the hub of your business – you’ll drive traffic here, encourage people to sign up for your newsletter and opt-in to your freebies, and likely sell products, packages, or offerings from your website. BUT. Before you can begin asking for ANY personal information from those who visit your website (e.g. their name, email address, etc.) your website NEEDS a Privacy Policy in place.  

A privacy policy, which is required under California law – and is required for any website that can be viewed in California – requires all websites to advise those who visit their site what information will be collected, and how any personal information collected will be used, stored, shared, and deleted. It also gives a user notice as to how they may contact you to change any personal information provided and confirms your compliance with a regulation called “CalOPPA” (California Online Privacy Protection Act), to confirm you are not advertising to or marketing to minors under 13 years of age.

If you do not have a privacy policy on your website, you run the risk of being fined by the state or the FTC. Those who visit your website may also have a claim against you, if they enter their personal information without your privacy policy being available for them to read, as well. So all in all, failing to have a proper, complete privacy policy in place can put your business at risk in a pretty big way. Should someone decide to fine you for this, fines could be as high as $2,500 per violation, meaning, you incur this fine each time someone visited your website without a privacy policy in place!

Second, your website should also include a proper Disclaimer, to limit your and your business’s liability for the content you feature on your website. As an online business owner, your website likely features a lot of great content, including blog posts, descriptions of your programs/packages/offerings, testimonials from prior clients, tips and information on whatever your area of expertise, etc. While this content will likely serve you well in terms of finding new clients, it may also land you in hot water if someone reads parts of your content and misunderstands or misuses the information, causing them harm. Let’s say you are a health coach, and your website includes a blog where you provide diet and exercise tips. You get hundreds of website visitors in a day, and love sharing your healthy tips with anyone who comes along! One of these website visitors happens to be someone who also has some sort of medical condition, that requires her to eat a specific diet or refrain from certain types of exercise. She reads your blog post about diet and exercise tips, decides to start implementing them all, and ends up getting extremely sick, due to her medical condition.

…is this YOUR fault?

Many of you are probably thinking… “what?? No way is that my fault!! I can’t know the personal health and medical conditions of each individual that comes to my website!” BINGO. This is exactly true. BUT – your website needs to include a disclaimer in order to tell your website visitors this information, and to caution them from using information from your website without first consulting their own personal doctor or professional that can comment on their specific situation. Typically, the disclaimer will advise those coming to your website that the content you post is for information and educational purposes only. It will caution website visitors that they should not take your advice over that of their own personal doctor, lawyer, financial advisor, therapist, or any other similar professional. This will make sure your business is protected, in case someone suffers some kind of harm or negative result from implementing things they learned from your website.

Lastly, your website should include Terms and Conditions to outline the “ground rules” for those visiting your website. This document is as close as you can get to having an agreement with each person who visits your website, and includes things like protection of your intellectual property rights (aka the content you post), your payment and refund policies, additional disclaimers and limitations of liability, and confirms what laws apply to any dispute concerning your website. This document is extremely important to making sure your business is protected – you are laying out all the ground rules to anyone visiting your website, and by staying on and using your site, your website visitors agree to the information contained in your Terms and Conditions.

WORKING WITH CLIENTS

Once your website is setup and legally protected, you will most likely start working with clients, and will need something to outline and confirm the agreement you have between you and your prospective clients! This is where the Client Agreement comes in. Your Client Agreement is an extremely important document and must be tailored to the type of program or package you are offering this client. (Hint: do NOT try to use an agreement you lifted from someone else, or try to create your own based on what you have seen from other people. Copying another agreement is illegal, and creating your own may leave out crucial pieces of information needed, depending on the type of services you offer. (For example, what a health coach needs in her agreement is different from what a business coach needs, which is different from what a website designer needs!) Your new client will sign this agreement prior to issuing payment to you, and prior to starting to work with you!

If you work with clients in a group capacity or sell digital products online, you’ll need something called Terms of Use. This document, like the Client Agreement, lays out all the details of the program this client or customer is purchasing, as well as information such as payment, refund policies, which laws control the agreement, etc. that your Client Agreement has as well. This document will be located on your sales or checkout page, and customers will agree to it by checking a box at checkout before they are able to purchase your program.

As you can see, once you start running your online business, there is more to put in place than just your photos, copy, and prices! But remember – it doesn’t have to be confusing or overwhelming. You just need to commit to taking the time to learn about what you need and investing in the right documents, so you only have to purchase them once. As your business grows and expands, you should always be asking yourself (or me!) if this new venture creates any additional legal exposure, and if there’s anything you need to do to tweak your agreements, or any new document you need in place in order to keep yourself and your business protected. Skimping on the investment to get your business legally protected is just not worth it if you end up in a legal battle or are facing fines for something that was easily preventable. You’ll end up spending more, stressing more, and may even lose your business as a result.

As a legal resource for online entrepreneurs, I can help you get the documents you need in place, and am more than happy to answer any questions you may have about what you need!

Share in the comments below: If we were to sit down for a coffee to discuss how to become a legally savvy business owner, what would you ask me?


CHRISTY WESTERFELD

Author Bio

Christy Westerfeld, Esq. is an attorney and legal resource for online entrepreneurs and coaches.

As an attorney and health coach, she knows how to build a successful online business, and knows what legal steps need to be in place to keep you in line, and out of trouble!

Whether you need a trademark, client agreement, website compliance documents, or waivers, Christy can provide assistance every step of the way!

When she isn't working, she loves spending time exercising, or outside at the beach, with a large coffee and a good book!

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