Running a regular legal check-up of your creative business sounds boring. But it is critical to building a foundation to support your big goals. And unless you turn it into a habit, then it’s hard to change your pattern of behavior. (Pssst…my favorite book about habit forming is The Power of Habit by Charles Duhigg [affiliate link].)
And you probably don’t have strong habits around performing a regular legal check-up of your creative business.
To help you form a new habit, this is the final post I did this year outlining a set of legal tasks you should complete in your creative business that quarter. (You can see the January tasks here, the April tasks here, and the July tasks here.)
To end the year with a bang, you are going to tackle between five and six legal tasks:
- update your client or customer contract
- update your contract review system
- talk to a broker to decide if your business needs any changes in your insurance policies
- get quotes for your insurance policies
- pay your taxes
- if you are an LLC or corporation, document all major business decisions and hold any required meetings
Update your client or customer contract
I’m a big believer that our contracts should be living, breathing documents that change not only with our businesses but based on feedback from our clients.
So at least once a year, I encourage you to pull out your client or customer contract and evaluate what is and isn’t working with it.
- Are you getting the same questions over and over? Maybe you need to clarify or explain that section better.
- Are your clients consistently missing deadlines? Maybe you need to put the schedule on the cover page of the contract, so they can easily see it.
- Do have tons of cancellations or no-shows? Maybe you need to put a policy in place to handle those situations.
Assignment: Review your contract and update anything that’s old or no longer working.
Update your contract review system
In addition to having a contract to hand to your clients; you should have a system in your business to make sure that you are only signing contracts that are good for your business.
At least once a year you should review your existing system to make any tweaks to areas where things have fallen through the cracks or haven’t happened.
Assignment: Update your contract review system.
Talk to a broker to decide if your business needs any changes in your insurance policies
An insurance broker should be one of the first team members you acquire. You should look for a broker (not an agent) who specializes in working with small businesses.
Part of the reason I suggest working with a broker, not an agent, is that brokers work for you, not a particular insurance company. While agents work for a particular insurance company, not for the buyer of the insurance. Because brokers aren’t tied to any one insurance company, they can search to find the best coverage and rate for your business and budget.
Assignment: Contact your broker and make an appointment to discuss your business coverage.
Get quotes for your insurance policies
Since you’ll be working with a broker, she might be able to find you a better deal on your current coverage with a different company.
Assignment: When you call your broker to talk about any changes to your coverage, ask her to get quotes for all of your existing policies for the next year.
Pay your taxes
To make your annual tax time a little easier, each quarter you should pay your taxes. You might owe:
- estimated self-employment taxes to the IRS
- collected sales tax to your state tax agency
- employer’s taxes to the IRS and your state tax agency
Your assignment: Send checks to the appropriate agency.
LLCs and corporations: document all major business decisions and hold required meetings
The whole reason you created your LLC was for three big benefits. And to keep your fence strong, you are required to document all major business decisions.
This might seem silly as a one-person show, but it shows that you are treating your business like a business. It fortifies your fence.
To document your decisions, you don’t need to do anything fancy. It can be as simple as summarizing notes from a meeting or writing down what your plan is. (In legalese, these are called Minutes of a Meeting and Written Consents.)
Your assignment if you are a corporation:
- If you haven’t held your annual shareholder meeting and board of directors meeting, hold one
- Write down all the major decisions you’ve made in your business in the second quarter of 2017 and add them to your central file
Your assignment if you are an LLC: Write down all the major decisions you’ve made in your business in the first quarter of 2017 and add them to your central file. (Don’t have a template for these? We’ve got one in the artist’s Courtyard.)
#TL;DR
In Q4, there are between five and six legal tasks you should tackle to legally maintain your creative business:
- update your client or customer contract
- update your contract review system
- talk to a broker to decide if your business needs any changes in your insurance policies
- get quotes for your insurance policies
- pay your taxes
- if you are an LLC or corporation, document all major business decisions and hold any required meetings
