Are you thinking of opening your own business as a behavior consultant? Maybe you already have, or you are working as an independent contractor? Being your own boss has a lot of advantages, but there is heavy responsibility as well. As many have learned from the covid-19 pandemic, no one is going to help you protect your financial resources or provide you with a cushion if things go wrong. Even in ordinary times, half of small businesses fail with the first five years.

Owning your own business is risky, but there are some things you can do to manage the risk.

Take care when naming your business, and consider registering a trademark

Choosing a name is often the first thing someone does when they decide to start a business. You don’t have to come up with a clever name; you can certainly operate under your own name. If you want to incorporate your business (see discussion of business entities below), or if you want a name for marketing purposes, or for privacy, or for flexibility as you grow, you will want to give some careful thought to your business name.

If you have an idea for a name, try to find out if someone is already using the same or a similar name, in the same or a similar industry. Do not rely just on Google or other online platforms. Search the U.S. Patent and Trademark Office or your country’s equivalent. Some states register trademarks as well, so check there, too. Look at neighboring states or countries, not just your own. Check industry groups (like the IAABC!) for similar names, and look at your state or country’s official corporations database. Be aware that some companies use deliberate misspellings, so check for those, too.

If you are going to invest in marketing your business name and you plan to use it long-term, consider hiring a lawyer to thoroughly investigate your business name to make sure it’s not already being used, and consider registering it as a trademark. While it will cost you money up front, it could prevent a costly dispute or re-branding later on.

Purchase insurance to protect yourself when things go very wrong

While it’s more fun to come up with the name first, I counsel my clients that insurance is the first thing to do when starting a new business. If you are not covered by insurance in case of accident or injury, you should stop reading and buy insurance coverage right now. As someone who works with animals, there are risks you cannot avoid. Insurance is there for when you’ve done your best, but things go very wrong.

If you are an independent contractor, this applies to you, too. As an independent contractor, you are your own business — whether you feel like it or not. Unless you are very sure that you are covered by someone else’s insurance, you will need to protect yourself. Ask yourself, what will you do if a client gets injured and blames you? What if you yourself get injured? What if someone who works for you is injured? Or if property is damaged? Or you are unable to operate your business for some other reason? Each of these events could cost you a lot of money.

Some types of insurance to consider for your business that could help in these situations are: general liability, professional liability, business interruption, umbrella insurance, short-term and long-term disability, and worker’s compensation insurance.  You can learn more about these here.

Pick the right business entity for your business.

There are several forms your business can take: You can be a sole proprietor, d/b/a (“doing business as”), partnership, LLC, or corporation, among others. There are pros and cons to each, which I’ve written about here.

If you have not formed an LLC or corporation and you are doing business, then you are a sole proprietor (or partnership, if you are working with someone else).  If you are doing business using a fictitious name, then you are operating as a d/b/a. You may still need to register in your state or locality.

You may have been advised to form a limited liability company (LLC). The most common reason that business people and lawyers like LLCs is for the “limited liability” or “asset protection.” In theory, an LLC is a separate entity from you the owner, and a person with a dispute against the entity has recourse only against the entity’s assets, and not against your personal assets (like your house).

Unfortunately, unless you have employees, that protection is probably illusory because you are performing the services yourself. The most common situation in which a person would be going against the assets of a dog trainer or behavior consultant would be a personal injury arising from an animal bite or similar injury; if you are the one performing the services for your clients, the claim would be against you personally. The existence of the LLC would not limit your liability or protect your assets in that case.

Also, if you decide to incorporate an LLC, you must be careful to keep your personal and company finances separate and observe the legal formalities. Otherwise, a court might disregard the separate entity and again hold you personally liable.

Despite these limitations, there are many benefits to LLCs, and it might still be the best form for your business. Just be aware that you need to take additional steps to manage the risk.

Have clear policies, contracts, and waivers

Written policies and contracts are another way to manage the risks that your business faces. Having clear written policies and communicating those to your clients will go a long way toward avoiding disputes, and can help you prevail if there is a dispute.

A contract is simply an exchange of promises between two parties. Most contracts do not have to be in writing to be binding. When a dispute arises, however, it is much easier to prove what the agreement was if it is in writing. Otherwise, what your opponent claims was in your agreement holds just as much weight as what you believe it was.

A liability waiver is a special kind of contract. A liability waiver is one contract that really must be in writing because if you ever need to rely on it, it means that your client is suing you, and you will have to prove that your client read it and understood exactly what rights they were agreeing to waive.

Liability waivers are not a cure-all, but a well-drafted form can provide your business with protection against a costly lawsuit. To develop a proper liability waiver, you should take the time to think about the risks to your employees, your clients, and their dogs, and how you can minimize those risks. These days, contracting COVID-19 can be a risk of participating in lessons or classes, and might be included in a waiver. A good lawyer can guide you through the process of assessing your business risks, identifying ways to reduce those risks, and minimizing the damage when something does go wrong. The result will be a liability waiver with enough “teeth” to protect you.

Comply with all laws and industry standards

There are laws and standards that apply to your business that may not apply to individuals. As a business owner you must be aware of and comply with all applicable rules. This requires that you become an expert in business, not just animal behavior, and is part of being a small business owner.

Some areas in which businesses are regulated include: licensing, registration, taxes, wage and hour laws, anti-discrimination, data privacy, advertising (including rules about emailing customers), unfair trade practices, and of course workplace health and safety laws. While workplace health and safety rules have always been there, COVID-19 has recently brought this area of regulation to the front of every business-owner’s mind, and it’s particularly important right now to be aware of the rules and comply with them.

Conclusion

Prior to the COVID-19 pandemic, it was common for small business owners to lament the fluctuations in income and the lack of paid vacation time as major drawbacks of owning their own business. The last few months have demonstrated the extreme downside of those risks and highlighted the differences between employees, who may have protections like sick leave or unemployment available to them, and independent contractors and business owners who generally do not. Investing in insurance, obtaining capital, building cash reserves, and setting up legal protections like contracts and waivers are necessary for you to ride the highs and lows of injury, illness, and economic downturn that come with owning your own business. With the necessary protections in place, you can truly enjoy the great benefits of being your own boss.

Christina Schenk-Hargrove, Esq., CPDT-KA, has been an attorney in Massachusetts for 20 years. She has considerable expertise in business law, litigation, estate planning, and expert witness preparation. A professional dog trainer, she is also fascinated by learning theory as it applies to both dogs and humans. You can find her at www.cshlawllc.com and www.dogtrainersumbrella.com