Welcome to part 6 of our business planning
series – Legal and risk management The legal and risk management area of your
plan includes information about your business structure, name registration and required
licences and permits. It also identifies things that could affect your business and describes
how you will deal with them. This will help you to identify opportunities for your business
and reduce the damage that potential threats could cause. Regarding your business structure, there are
3 common legal structures: a Sole Trader, a Partnership and a Proprietary Limited Company.
Each structure has different rules regarding things like tax, liability and ownership. Remember always seek legal or professional
advice before signing contracts and license agreements or when dealing with legal obligations
associated with your business such as licences and leases. This area of your plan also includes your
Intellectual Property and trademarks. Your ideas are your IP – you may have an idea
for a new business, process, model or a new use for products or services for instance.
If you do not protect your IP – someone else can use it. Also, trademarks can be a part of your business’s
IP. A trademark is a word, symbol or phrase (or even smell) that identifies a business
or its products. Trademarks are protected by law. The final element in this section of your
plan is risk management. Risk management is about reviewing all areas of your business
to determine possible risks and putting in place strategies for treating those risks. Insurance is one method of sharing risk. You
pay an insurance premium, rather than run the risk of not being protected against the
possibility of a much larger loss. As far as obtaining insurance is concerned,
make time for a full discussion with an insurance professional who will take you through all
the methods of risk cover and put in place what the business needs.