By Alison Garrow, Senior Associate, Nabarro
When you set up a business, it's important to put the framework in place so that you protect your business ideas and goodwill, set out clearly the relationship between founding partners and manage any employees you have efficiently. It may not be the first thing on your mind, but a little attention to this at the outset could save you a nasty headache down the line.
Here's "Top 10" points to check off as you get started…
1. Start as you mean to go on – You are aiming to create value in your business. Part of that is your human capital. You want it set up in an orderly and well-kept manner as it will reassure investors and a potential buyer so that they have confidence in their investment.
2. Protect your Ideas - Confidentiality, IP and post-termination/non-compete provisions are likely to be important – these should be in place from Day 1. The value of your business and its success are tied up with the ideas and knowhow you develop in the early stages of your business. By protecting these via confidentiality obligations on your employees; ensuring that any copyright and patents belong to the company, not the individual; and by placing restrictions on former employees or business partners competing with you or pursuing your clients once they have left your business, you safeguard the core of your business.
3. Know the ropes – Employees have a legal right to a written statement of basic terms and information associated with pay and benefits. The law also provides for minimum notice periods and employees are entitled to 5.6 weeks' paid holiday a year (for a full time employee).
4. Stay on the right side of HMRC – Register as a new employer with HMRC – most employers can do this online from the HMRC website. This will enable you to set up payroll and ensures you are paying the correct tax and NICs.
5. Tackle performance issues early and set expectations clearly – Keep a record of targets set and the deadlines to meet these. Share this with the employee. If an employee knows clearly what is expected, it helps him to work towards this and is easier for you to raise any issue of non-performance with him.
6. Keep the house in order – Have a disciplinary policy and a grievance policy. They need not be complex but they will ensure that there is a process in place for when your business grows so you can tackle misconduct or performance issues, and employees will know how to raise a formal complaint internally.
7. Incentivise to build long term value – Consider how to structure bonus/commission arrangements in such a way as to build long term value in your business: what behaviour/achievements will you reward and how will you pay to encourage loyalty from your employees?
8. Development – Arrange and structure training so that you get the most of employees' skills and they are motivated to learn and develop their expertise to benefit your business.
9. Play nicely – You want to set a culture where employees foster positive and harmonious working relationships. Make it clear that you embrace diversity (which should strengthen your business) and have a clear Equality policy.
10. Where does the buck stop? – Consider appointing a person to be in charge of HR issues. It needn't be a full-time role, but it helps to know where the responsibility sits.