Creative Ways to Protect Your Small Business Legally At Minimal Cost

In our culture, legal support is often viewed as a luxury, than a necessity. We don’t typically subscribe to a legal retainer with a law firm during the early stage of our business. Why? Because we tend to focus on selling, marketing, and survival than the legal aspect. But in my experience, I would recommend that we establish our legal structure early on to avoid mishaps in the future.

As a startup or a small business, here are some guidelines on how to protect ourselves legally without necessarily hiring a legal retainer.

  1. Company Registration. Register as a corporation as this limits the liability of the owner or shareholders. You won’t be personally liable to the debt of the corporation. Gone are the days that we need to find dummy shareholders in the Philippines because of our support for a one-person corporation. I won’t mention details of others like, BIR, City Hall, SSS, PHIC, HDMF, etc., as these are all mandatory and straightforward.
  2. Employee Onboarding. Make sure you secure signatures of the following when you signup a new employee:
    1. Job Offer
    2. Job Description
    3. Employment Contract
    4. Accountability Forms
    5. Company Policies, Employee Manual and Code of Conduct
  3. Employee Management and Firing.  
    1. Document all incident reports, issue Notice To Explain on every incident and implement disciplinary actions according to your code of conduct.  
    2. If you want to fire an employee, schedule an admin hearing to let him/her state their case, and then execute fairly.
    3. Set a quarterly reminder to allow employees to evaluate themselves, then followed by the supervisor’s evaluation and then score them 1-10. For probationary employees, make sure to have a performance evaluation every 3rd and 5th of the month.
  4. Sales Contracts. This is basic, but we tend to disregard once we signup a deal with a customer. Make sure all your projects or sales are well documented with details like project period, the scope of work, and payment terms. Be also mindful of the termination clause. Some customers see a weak termination clause as an opportunity to terminate and ask for a refund, but in reality, they just changed their minds or have no budget at all.
  5. Service Delivery. Document, document, document. Make sure to document all services rendered by securing a service delivery acceptance form. If you deliver goods, a delivery receipt is a must. Record every minute of the meetings and file them up properly for easy retrieval during a legal mess. If the customer issues a demand letter, make sure to respond.
  6. Tax Management. This is a broad topic, but the most basic is proper filing to BIR of sales and expenses regardless if you have transactions or not. Consult with an accountant and get a copy of tax filing schedules and deadlines.

Dealing with legal issues are inevitable when your business grows. Thus if you set your legal structure early, then it will significantly help you in the future. Hiring legal will obviously protect you later on as I still recommend this when your budget permits.

Are Filipino SMEs Ready for Virtual Employees?

Telecommuting, remote work, home-based jobs are terms that we use in working virtually.  This virtual team structure is growing in popularity in organizations.  To some extent, we are already practicing working with people who are not in our visual proximity although we are in the same building or premises. 

We utilize instant messaging, emails, video conference tools to collaborate with our team.

Many organizations who are flexible and adaptable have already explored a virtual office environment as one means of achieving goals and project objectives. 

BPOs in the Philippines are virtual teams of their corresponding HQs in the US or Europe and not only dispersed geographically but also in timezones.

Here are some advantages of virtual teams:

  • Reduced time and costs in travel
  • Higher productivity, more time, and fewer distractions.
  • A higher degree of employee engagement and freedom from office policies
  • For companies to leverage talent across geographic boundaries.
  • Lesser overhead cost of office space for organizations.
  • Quicker decision making, less face to face meetings.
  • Improve detail due to documented instructions and notes

Disadvantages:

  • Some people work well with physical interaction.
  • Employee behavior diversity in virtual teams leads to cultural issues.
  • Employees who need training, encouragement, and motivation.
  • Weaker control and some employees don’t have a conducive workspace.

I am writing this because I am not sure of the answer. Maybe it depends on the industry, culture, nature of products/service, or ethnicity. This post is also to officially announce that Hilsoft, being an advocate of change adaptation and innovation is going virtual. This move is also in line with our recent initiative to go complete SAAS by the end of 2020.

Since last month, I started experimenting being virtual by living in a nearby province and less face-to-face meetings with the team at HQ.  We already have initiated a survey internally with the employees who are willing to work at home, which 50% responded yes and the 25% others responded either option would do.  The rest, which is new employees, wanted to work in the office, which makes sense.

This coming week, I am about to finalize remote work policies, control procedures, and performance measurement.  There’s so much more to consider, from hiring, face-to-face team meeting schedules, training, sales calls, client visits, etc.

I will document and publish the progress, hoping to provide value with entrepreneurs who are considering this strategy.