Litigation is a common occurrence in the business world, but it is undesirable. Lawsuits against your small business will have a devastating effect on its profitability and productivity. You will have to foot court charges as well as fees for your expert witnesses and lawyer. Litigation takes up a lot of valuable time and energy that could be used to generate more income for your small business. Litigation should be avoided at all costs due to its devastating effects on your business. Here are five tips for avoiding litigation in your small business.

1. Maintain Proper Records

Keeping good records will enable you prove each and every allegation that can be made against your business wrong. Without proper records, you will find it extremely difficult to prove to the court that you are on the right. Properly kept records can help you have a case dismissed or limit it to strictly matters of the law and not factual issues. You should ensure that you maintain all relevant notes from meetings, make copies of documents, save emails and follow up telephone conversations with letters.

2. Use Written Contracts

A lot of small businesses attempt to cut corners by not signing proper written contracts; obviously, you should avoid this common pitfall. Ensure that you properly read through all important contracts before signing them to validate the business relationships created by these documents. You should have an attorney prepare all your contracts, sale, and purchase documents before entering into any agreements with any parties. After signing the written contracts, you should keep a copy for your records, as it will come in handy whenever a dispute arises concerning the same as both parties will have annexed their signatures on the documents.

3. Pick the Right Attorney

Whenever a dispute arises against your small business, you should pick the right attorney to represent you. The right attorney will make a huge difference as they are the only hope you have of getting a quick resolution through alternative dispute resolution methods instead of the tedious and expensive conventional litigation. Well-seasoned attorneys will advise you on the best way out of any situation and formulate a strategy to resolve the whole dispute amicably between parties without resorting to protracted litigation.

4. Offer Exceptional Service

In order to avoid litigation for your small business, you should always strive to provide exceptional services and first-rate goods. Happy business partners, vendors and customers rarely sue companies and businesses alike. When you offer exceptional goods and services to your customers and business partners, they will be willing and open to resolving any form of issues that may emerge between them and your company. You should know your vendors and customers well so as to set their expectations early enough and avoid any form of disputes from occurring. You should also value resolving issues as they occur to avoid chances of litigation.

5. Ensure You Take Out Proper Insurance Policies for Your Small Business

Your small business should be properly insured against all the specific risks prevalent in its line of trade. You should consult with your insurance agent on insuring your business against all possible risks that may affect it. Insurance companies will take up any legal claims or lawsuits against your business and help you avoid being embroiled in lengthy litigation processes.

Final Words

Litigation can be draining, expensive and time consuming. You should therefore take all the appropriate steps to steer clear of litigation like great customer relations, due diligence and signing well drafted and constituted contracts. You can also refer to the above tips on how to avoid litigation in your small business to ensure its long term profitability and success.