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Why Startups Should Never Rush to Launch

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By George Khoury, Esq. on December 19, 2016 3:01 PM

While being first to market may be the key ingredient to success for some of today's biggest tech names, if a startup rushes to launch, they could be facing legal trouble down the road. Although it might be helpful to gauge demand and test a product to do a soft launch, or try to launch early, if your startup isn't ready, there's no end to the types of problems that can pop up.

Among the primary concerns that attorneys tend to have when a startup is rushing to open for business are legal liabilities, legal compliance, and potential legal challenges.

Legal Liabilities and Compliance

Regardless of the type of business you plan to operate, there are likely potential liability and compliance issues that need to be addressed before opening. For starters, if you plan on servicing customers at your business location, you will want to obtain some form of premises liability insurance coverage. Additionally, your location should be inspected to make sure that there are no potential dangerous conditions that might not be readily apparent (such as loose flooring tiles or railings).

Depending on the type of business you'll be running, there may be more legal compliance issues apart from the ordinary ones like local business licensing, employment taxes, workers compensation insurance, employee benefits and taxes. Learn the lesson that the nude maid agency learned the hard way. Having systems in place to ensure you are in compliance with the law in your industry, such as those for the ride-sharing and transportation industry, should be done before starting operations.

Disrupting Disruption

Startups, particularly those in the tech sector, have a reputation for "disrupting" industries by shifting an industry's focus. The most obvious example today is the new prevalence of ride-sharing services, such as Uber or Lyft, and their impact on the taxi industries of the cities they operate in.

However, if a startup that is poised to disrupt an industry is not funded to litigate potential issues against the heavy hitters already occupying the market, they may never be able to disrupt the industry. Litigation is expensive and can stop a business from moving forward. If your startup is vulnerable to a legal challenge, it is best to prepare to face that challenge before starting operations.

If you need more reasons to contact an attorney before opening for business, here are the basic 10 reasons why you want to have a lawyer help with your startup.

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