Defuse problems before they reach lawsuit proportions

Whenever difficulties arise, you want to put them behind you as quickly as possible — and you can't do that by ignoring them or insulting the one confronting you with a problem.

I recommend: Run through the ladder of alternative dispute resolution tactics: apologizing for the problem, negotiating with the injured party to reach a settlement, finding an outside mediator who can work as a go-between, and finally having your dispute arbitrated through an independent individual or panel. For the last two steps, you can find experts for hire at the National Arbitration Forum or the American Arbitration Association.

Employ an employee manual

Employee interactions can lead to all types of conflict, which makes an employee handbook essential. You should detail the relationship between employer and employee (maternity leave rights, termination and discipline procedures, sick leave, vacation policy, sexual harassment guidelines) ahead of time and make sure that employees know what's expected of them and what they can expect if they don't perform.

I recommend: You can purchase ready-made employee handbooks online at WriteExpress.com or the cleverly named EmployeeHandbookStore.com, or you can write your own using tips posted on nightcats.com. Employee manuals can be tricky. If you'd rather get an employment attorney to help you, find one on AttorneyPages.com.

Sell with care

When you sell products or services to a customer or wholesaler, you need to make sure the contract — whether written or implied — between you and the other party is clear: What is your price? If you're selling services, what does that price cover? What are your terms of delivery and payment? What warranty do you offer? Who pays if the item is destroyed or damaged in shipping?

I recommend: MoreBusiness.com sells hundreds of sample contracts relating to receipts, stock agreements, bills of sale, distributorship, and dozens of other topics. Prices are affordable – some contracts cost as little as $12. The company also sells other sample legal forms: lease agreements, real estate contracts, employment forms, and much more.Deceptive advertising and pricing, while possibly spurring big short-term sales, can lead to trouble. The Federal Trade Commission offers more than a dozen examples of deceptive pricing on its Web site; if you recognize yourself in these examples, mend your ways.

Raise money the right way

Unless you're independently wealthy, you're likely to raise funds to open or run your business, so make sure that you follow the rules, namely federal and state securities laws.

I recommend: If you issue shares or bonds to investors, you need to follow the federal Securities Act of 1933, which details the information you must make available to investors, in addition to the securities laws for your state.

Keep contracts with lenders

Whatever arrangements you make with lenders, put them in writing with detailed terms for repayment and the interest you'll pay. Don't rely on a handshake deal with friends and family members because memories can change over time.

I recommend: Check out this Inc.com article on promissory notes, which includes a sample promissory note. Such a note is a legally binding contract between you and a lender. It should include the amount you're borrowing, the interest rate, when repayment will start, how much you'll repay with each payment, who is repaying the loan (you or your business), and who you owe.

Clear your name

No matter what you name your business, filing a DBA ("doing business as") statement or incorporating doesn't automatically give you the okay to use that name. A similar business in another state might already be using it — or even have it trademarked — and you might be forced to adopt a new name, which can be a costly expense and cause confusion among your customers.

I recommend: You can shell out money for your legal advisor to search the U.S. Patent and Trademark Office (USPTO) for registered instances of your desired name, or you can visit the USPTO Web site yourself and conduct searches on your name, your product names, and even your slogan.