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Work Less, Earn More is the podcast that explores how to get the most out of every hour you work. Gillian Perkins brings more than a decade of experience as an entrepreneur and educator to help you design a business that's not only flexible and fulfilling, but highly profitable. She shares strategies that are working in her own business to save time and maximize profits. She also features interviews with successful business owners on how they’re achieving big things in their businesses with crazy-little time investment. Share Work Less, Earn More with an overworked entrepreneur you know who could use a change of pace!
Sam:
[0:00] If you're using documents that you don't feel confident about, it's like as if you have nothing. When you start to allow people to break little pieces of their contract, it's like a toddler who you now like bent your boundaries to and now they're going to push some more. You can't really stand within your legal boundaries once you start letting that stuff go. I would say never go 50-50. That is a terrible idea. I've just seen too many instances of people who were friends, actual like romantic partners, all kinds of things. It just doesn't go well.
Gillian:
[0:31] Hey there, friends. Welcome back to Work Less, Earn More. I'm your host, Gillian Perkins. And today we are diving into a topic that so many entrepreneurs try to avoid.
Gillian:
[0:41] But you really can't afford to. It's the legal side of starting a business. The truth is that most new business owners make at least a few legal missteps early on. Things like skipping contracts, overlooking trademarks, or not setting up their business structure the right way. I definitely made some of those mistakes myself. And these mistakes can end up costing us a lot of time, money, and peace of mind down the road. They can just make things so much more complicated. So I'm really excited to be joined by Sam Evander Whelan today.
Gillian:
[1:12] Sam is a lawyer turned entrepreneur. She's also a best-selling author and the creator of The Ultimate Bundle. Through her programs, her podcast called On Your Terms, and now her new book, which is called When I Start My Business, I'll Be Happy. She has helped thousands of coaches, creatives, and course creators protect their businesses without the overwhelm or the intimidation that so often comes with legal stuff. So in our conversation today, Sam is going to be breaking down some of the biggest legal mistakes that new business owners make and what you can do to avoid them. We'll talk about some surprisingly common missteps that can leave you vulnerable and how to protect yourself even if you're on a budget and also why getting
Gillian:
[1:55] legally legit doesn't have to be scary, complicated, or expensive. So if you want clarity, confidence, and some very practical tips to protect your business the smart way, then you are going to love this episode.
Gillian:
[2:16] [intro bumper]
We became entrepreneurs because more than anything, we want freedom. We want to be in control of our own schedule, income, and life. But unfortunately, that isn't always the reality of being a business owner. I'm Gillian Perkins, and I'm on a mission to take back entrepreneurship for what it's supposed to be.
In every episode, I'll share with you how to get the most out of every hour you work so that you can work less and earn more. Let's get to it.
[/intro bumper]
Gillian:
[2:45] Hi there, Sam. Welcome to Work Less, Earn More. It is so good to have you here today.
Sam:
[2:49] Hey, Gillian. I'm so happy to be here. Thanks for having me.
Gillian:
[2:52] Yeah, for sure. So I cannot wait to get into talking about these common legal mistakes that new business owners make. But first of all, I got to ask you about your book. It came out sometime this past year, right?
Sam:
[3:04] April 15th.
Gillian:
[3:05] April 15th, 2025. Yeah. So it's been out for quite a few months now, but not too long. Tell me a little bit about what led to you writing that book and how it all went down.
Sam:
[3:17] So I really wanted to write a soup to nuts online business manifesto of how to build a successful online business for people who also want to do so on their terms without burning out and without breaking the rules. And really without following like what all the gurus say that they have to do. So that's my style. And people were always asking me, I have only ever sold two products for eight years. I've sold over $8 million in one of them alone. and so people have always asked me like how did you keep it so simple especially as I navigated I lost both my parents within the same year I had brain surgery and still grew my business exponentially so I really wanted to put it all in one place and kind of do so in my like cozy style and also really help people to understand that like yes building a really successful business is not going to make you happy but you can still be really happy with a successful business.
Gillian:
[4:11] Sure. Yeah. So having a successful business doesn't have to take away your happiness. Is that kind of what you're getting at?
Sam:
[4:16] I think it's that a lot of times people go into starting a business thinking that once they leave their job, once they ditch corporate, or once their business even just makes more money, that they're automatically going to be happy. And I think if my life story teaches anybody anything, it was kind of egg on my face that I left my corporate career as an attorney. And then like my whole world blew up. My parents died. My dad got terminal leukemia. I had brain surgery. It was just like, wait a minute, I thought this was all supposed to be smooth sailing. And so what I learned instead was how to build a very sustainable, streamlined online business that allowed me the freedom and flexibility to go out and be a happy person on my own, not because of what the business was doing.
Gillian:
[5:00] You said that the book is kind of about people asking you how you were able to keep your business so streamlined and grow it so much. Is there any particular thing that you can point to that was what enabled you to do that?
Sam:
[5:17] Yeah, I would say two very specific things was that when life hands you some very sticky lemons, you figure out how to get really streamlined, especially in your content, for example. So I early on invested on pretty much only creating evergreen content, content that would have a call to action that would pull people into my world, regardless of when they heard it or found it. And then once they were pulled in, the place I was pulling them to was my email list. Because no matter what was going on in my life and how difficult things got or how little time I had to dedicate to work, I was able to send an email to my list. And now sitting here, I have over 50,000 people on my email list. And I'm a lawyer, guys. I talk about legal stuff. And I have over 50,000 people there because I always treated it like it's the most important thing in my business. It still is. And it was the thing that allowed me to tap into revenue as much as I needed while all that stuff was going on. So I could be, you know, silent on social or not doing other stuff. But I had that email list to go back to.
Gillian:
[6:22] Yeah, for sure. And I know we're supposed to talk about legal mistakes, but I always love diving into people's businesses and how their businesses work. So before we get to that, let's see, I would really like to hear one more thing. And that is you talked about using evergreen content to promote your business, right? To get that exposure. Has that been your main source of visibility and leads is evergreen content? Have you used other strategies like paid ads or anything like that?
Sam:
[6:52] Yeah, so starting three and a half years after I started my business, I did invest in paid ads. I have a strategy I talked about a lot in my book called The War's Trust Strategy where I built up enough capital within my business that I could go out and experiment with things like paid ads. And I knew it wasn't going to hurt me if it didn't work out. So that's really what I recommend doing. But once I did that, yes, once the ads worked, I scaled the ads. But I still today split my time between an evergreen organic content strategy and the paid ads.
Gillian:
[7:22] And what type of evergreen content do you like to create?
Sam:
[7:25] Yeah, so I have my podcast On Your Terms, which has weekly, many weekly episodes. So that people are not only discovering me that way, but I actually see my podcast to be a bigger nurture and conversion tool for people who find me elsewhere. So it's great because if you do run things like ads, for example, so many people come in who are kind of cold and unfamiliar with what you're all about. And then a podcast, I think, is such a great intimate way for them to get to know you about your product and your process and all this kind of stuff. So I have that. And then obviously doing a lot of content on social media. My main platform is Instagram, where I'm posting content that is consistently
Sam:
[8:04] pulling people to my email list.
Gillian:
[8:06] For sure. Well, thanks for sharing about that. Okay, so let's get into some of these legal mistakes. I'll start out by just asking you, is there one legal mistake that you see as the most common legal mistake that new business owners make?
Sam:
[8:21] Absolutely. It's that people wait too long to get legal protection, that people make the mistake of thinking that they're not ready for it yet, like in their business, right? So they'll think about, people will say to me all the time, Oh, I don't think I need that yet. I only have a few customers. Or I don't need that yet. I'm not profitable. And it's really important that everyone knows that the law has no room for error for your profitability or how many clients you have. If you have one client, if you're trying to operate a business, you need legal protection. Period. Full stop.
Gillian:
[8:58] And when you say legal protection, what specific pieces are you talking about?
Sam:
[9:02] So the three main pieces that I would recommend anybody starts out with are actually very simple. So the first is that you register your business. There are different kinds of business entities. Typically, people in online business would choose an LLC as a good option because it provides you with some of what we call limited personal liability protection, meaning that you're separated personally from your business so that you're not personally responsible or liable for what happens as a result of your business. So that's the first thing I would do. The second is that I would get a contract for whatever you're selling. If it's a service, you would use something like a client contract. If it's an online course or digital product, it would be something like terms of use that you would include at checkout. And the third thing I would do is get business insurance. Business insurance is what financially protects and covers your business. And between those three things, they work really, really nicely together to protect you as the business owner, to protect your business and your business's money, and then to protect your sanity and boundaries and enforcement when it comes to contracts.
Gillian:
[10:05] Yeah, for sure. So let's like dive a little bit deeper into each of those things. First of all, about the business structure, and you mentioned an LLC. Another common question people have when they're considering forming an LLC is how much protection does the LLC really offer? Could you speak a little bit to that? Like how much protection can you expect from it? And in what way does it protect you?
Sam:
[10:28] Yeah. So theoretically, an LLC is supposed to provide you fantastic legal protection for you as a person and separate you from your business and like being responsible for what happens in your business. But here's where it goes wrong in two different scenarios where you're not offered that kind of protection. The first is when you, the business owner, don't actually act like a business owner and you don't actually use your LLC to your full advantage. So when I say that, I mean, you're not entering into contracts between your LLC and your customer, you're doing it in your name instead of your LLC, for example. You're not using your LLC name or the LLC moniker when you're talking about your business online. If you're commingling personal and business money and you're using one account, for example, that is a way that you are not acting like an LLC. And that is a way that you can then actually not be afforded the protection you think you have. So that's one of two ways. The second way is that you might live in a state that doesn't fully recognize what we call sole member LLCs as much as they would if you, Gillian and I, owned a business together. So some states will say that if only a single person owns an LLC,
Sam:
[11:41] you don't get as much of that personal liability protection. So that's something you need to do some research about or talk to an attorney near you to find out if you live in one of those states.
Gillian:
[11:49] That's really good to know. Are there very many states that that applies to?
Sam:
[11:53] Yes, there are many states that applies to. This is also something that's fluid. So some states like when I started my business eight years ago, they had those rules in place and now they've updated it. Some have gone the opposite direction. So that's why it's just really important that probably for accuracy purposes, you look this up or you talk to somebody near you.
Gillian:
[12:10] Yeah, for sure. Well, thanks for the heads up. I know that most of the time people can register an LLC on their own, right? They can just go on like their Secretary of State business website and fill out the forms, right? Is there any reason not to do that? Any reason why you might want to involve an attorney or anything in the process?
Sam:
[12:29] I would say the very first thing that comes to mind is whether or not you just don't want to. Some people don't have the time. They don't want to. They just want to offload it. If it will make you feel better to know like, hey, this was done. I know it was done quickly and correctly. You can do that. Sometimes a little backdoor strategy is that you can actually talk to your accountant and some accountants will help you to set these up. And it's much more affordable than attorneys. If you find an attorney who will do it, always ask if they will do it for a flat fee arrangement. So you want to ask them that way you just know up front, like it's $500 or $1,000 instead of getting an hourly bill, which you do not want. So yes, otherwise, other than just not wanting to do it yourself, if you have a complicated financial situation, sometimes people contact me who they own multiple other businesses or their partner or spouse owns other businesses, or they're going through a divorce. I remember somebody asked me about this and they were going through a divorce and they were saying, should I set up the LLC now or wait till after I was talked to your attorney? Because that can be complicated and that can have implications for you.
Gillian:
[13:33] Yeah, for sure. The reason I ask is because I've done it myself both ways. I've opened or created multiple LLCs. Most of the time I've done it myself. But there were a couple times when I went with an attorney. And personally, I ended up regretting the decision because I had to do almost the same amount of work on my end. They were just asking me the questions that I otherwise would have just been asked by a form online, if that makes sense. I would have had to answer those questions one way or the other, but now they were kind of just being this go between sort of person where they were asking me the questions and then I had to pay extra fees. But of course, I still had to pay the state fees as well. So it ended up feeling like it didn't really save me time or effort and just costed more money.
Sam:
[14:16] Yeah, I mean, that's common. And I guess that brings up another good point that one time when it's helpful more than anything is when you're starting a business with someone else. So an LLC can be owned by either just you by yourself or it can have what we call multiple members. So you, let's say you and Gillian were going into business together, right? So you're going to split the business 50-50. That is when it's really, really helpful to use an attorney because you both need to understand what your rights and responsibilities are. What happens if the one person goes like defunct and stops contributing? You know, what happens if something happens to one of you? What happens to the business? There are many more legal issues when you're going into business with someone else versus yourself. So yes, the lawyer in me always has to tell people like, yes, lawyers have value and you can go to them. But I mean, what I do inside of the Ultimate Bundle, my product is teach people how to just file their LLCs themselves.
Gillian:
[15:09] Yeah. And it totally makes sense that if you are going into business with a partner or multiple partners that you definitely would want a contract in place around that and all your T's crossed and I's dotted, right? With everything spelled out.
Sam:
[15:24] You'd want an operating agreement to be drafted. Typically, the way that that's actually done is that you have your own attorney, your potential business partner has their own attorney. And then you have a business attorney, a third person who drafts the document for the business. And then you each have your individual attorneys look at that document and tell
Sam:
[15:42] you what are the pros and cons for you as a business owner. It's really important.
Gillian:
[15:46] Is there anything else that you think people should know if they are considering starting a partnership or going into business together with other people?
Sam:
[15:54] I would say never go 50-50. That is a terrible idea. I mean, I'm a little jaded from when I was a practicing attorney. I was essentially what we call a business divorce attorney. And so it was about businesses that were always breaking up or some shareholder dispute. I've just seen too many instances of people who were friends, actual like romantic partners, all kinds of things. It just doesn't go well. I just don't think it's a great idea. Personally, I know that there are plenty of examples of people who get along fine, but at the very least, please do me a favor. And if you're going to go into business with someone you know, you're friends with, whatever, you have to do the... It's almost like more important that you do all the legal stuff that we're talking about, because that's going to make it just super clear because your relationship will turn very quickly if things don't go well.
Gillian:
[16:45] I'm obviously not an attorney, but that's always been my sense as well. That not a good idea to go into business with friends, family. It just doesn't seem to work out so often and can really damage those relationships.
Gillian:
[16:57] [mid-roll ad]
Hey, did you know that I have another podcast? So right now you're listening to Work Less, Earn More, which is my main show. But I've also got this other podcast called The 100k Method.
Gillian:
[17:08] The 100k Method is a 10 episode podcast series all about how to build a strategic sales system for your online course, your membership or your coaching program. So if you don't already have a system that is consistently getting you sales online, then you're definitely going to want to give this podcast series a listen. Now, like I said, there's only 10 episodes in it, because I know that sometimes it can be a little overwhelming to start listening to a new show. You don't know where to start. You don't know if you should start with the most recent episode, or the first episode that was like three years ago, or somewhere in the middle with a random episode that just looks interesting. So I wanted to make sure that this podcast series had a really clear start and finish, you can actually listen to the whole thing and get the whole message. Of course, it's totally free since it's just a podcast series. But honestly, it's kind of like a mini audio course. To check it out, all you need to do is go to gillianperkins.com/the-100k-method. And you'll find the podcast series right there. And you can start listening right away. You can also just give it to Google. All you'll need to do is search the 100k method podcast, and it'll pop right up top results. And I really hope that you do go look that up and give it a listen. Because I know what a difference it can make to have a strategic, automated sales system for your product online.
[/mid-roll ad]
Gillian:
[18:36] You said something interesting. You said you recommend never going 50-50. Why? And what are some of like the most obvious alternatives?
Sam:
[18:43] Yeah, you never want to go 50-50 in a business operation because you will never be able to reach a decision. So you need to have somebody who owns more of a stake that when things are split, when you can't decide what you need to do. I have a friend who was actually on Shark Tank, who had a really big business, had a business partner. They were young when they started it. They were best friends. And they started thinking, why not be 50-50? We don't need any fancy agreement doing this. Well, it turns out the business got really, really big after Shark Tank. And that led to some really big differences in opinion. And they actually had to bring outside counsel in because they could never come to an agreement on, should they go wholesale? Should they do this? Should they do that? They couldn't do anything because they were at gridlock. So you definitely don't want to do that. So, you know, people contribute to partnerships in different ways. There's actual money. There's time investment. There's maybe some skill or knowledge investment connections that people contribute. So depending on who's contributing what, you can divvy up the business. Even if it was 51-49, that would be better.
Gillian:
[19:48] Yeah yeah for sure well thanks okay so I think the second thing that you mentioned in terms of getting yourself legally protected was having contracts or terms of service so I think that you said that contracts if you have clients or if you're selling something like an online course or something like that you would want a terms of service what about if you're selling like a physical product or something like that.
Sam:
[20:14] Yeah. So if you're selling a physical product online, there's no like official term for these things. But at least in terms of what I sell, what I call it is a shop policy. So if you're selling, let's say mugs on an Etsy store, you would put shop policies not only within your store, but if you were maybe selling them in your own shop, like a Shopify or WooCommerce account, you can also include those as terms that people have to agree to when they purchase. So that's where you're covering things like refunds, even chargeback threats, which are increasingly popular and frustrating to deal with as a business owner. And you have to have the right kind of language that was placed in the right place that was agreed to in the right way in order to actually enforce it and protect yourself.
Gillian:
[20:58] Are there any things that you think should be in people's contracts or terms of service or shop policies that you commonly see are missing?
Sam:
[21:08] Yeah. So I see often when people try to create their own contracts, they're actually much more bloated than the ones I write myself. So it's funny, people think that lawyers' contracts are really scary, but I'm actually more scared of the ones I see other people create because they get really long and they get not only redundant, but they actually get inconsistent. So they will often have parts that actually cancel each other out because people are including things that they don't understand. So I highly recommend getting something professionally drafted for you or buying legal templates from someone like me so that at least you have a solid foundation to start with. Often people are missing some of the most like probably what seems to you all as like the most boring parts like, for example, venue and choice of law clauses, which are clauses you include in your contract to say which state's law controls the terms of this contract. You always choose your own because your own should be more advantageous than someone else's. And then you also can choose where somebody would have to sue you. And you always choose your state because then your customer would have to come to your state to sue you, which is obviously more difficult. So I see those often left out. And I actually had a customer join the ultimate bundle because she was missing those. And she lived in the state of Washington. And someone in Florida sued her in Florida, which ended up being a huge expense for her. I guess she had to hire an attorney in Florida, travel to Florida. Florida's law just so happened to not be as helpful to her as it would have been in Washington. So all around bad news for what otherwise seems like a very boring,
Gillian:
[22:37] Mundane, shortier contract.
Sam:
[22:40] Yeah, they all have a purpose, I swear.
Gillian:
[22:43] Yeah, for sure. So you talked a little bit about how people might draft their own contracts or buy a template or have an attorney draft it. What are some of the advantages or pros or cons of those different options?
Sam:
[22:57] Yeah. So the pro to going to your own attorney near you and having them draft it is that you can get something highly customized to you and how you're working and know that somebody had eyes on it and all of that. The absolute huge downside is that that is very expensive. And it's often not an option for many starting out in online business. So that's why I created my business, why I created online templates, legal templates, because I thought it gives you a good foundation for somewhere to start. So if you're someone who has a business, starting a business and needs some contracts in place, you can utilize something like my legal templates. You then download them and make them your own. It's also really good for people who are going to have more interaction with your customers day-to-day who then have questions about the contract. So like if you or I went on Target's website and we're buying something, we're not asking Target ahead of time. Like, hey, so when you said this in paragraph 14 of your policies when I'm buying this blanket, like, what did you mean by that? Because no one's going to answer us. But when you're working with people one-to-one or you're selling in a small shop or something like that, people will reach out and they will ask you questions. Like, what does this mean? Does this have to be in there? Why does this say that?
Sam:
[24:10] And I do think it's helpful for you as a small business owner to be able to navigate those conversations. And so one of the things I do in my legal templates is that as you're filling it out, I'm explaining to people, it comes with like a video tutorial. So I'm explaining to people like what this section means and what that means and how you would explain that to your own customer or client. So that's where it can be advantageous to do something like that if you have the kind of business where your customers might be asking you questions.
Gillian:
[24:39] Okay. Now, I don't think we can talk about contracts or policies without talking about what might be the elephant in the room, which is like chat GPT, right?
Gillian:
[24:49] A lot of people are using that these days to write their contracts and whatnot. Good idea, bad idea. How can you use it safely? Like what role could it play? What should you definitely not do with it?
Sam:
[25:02] I would definitely not create contracts with it. I'm really glad you asked me this because I filmed what I would consider to be the scariest YouTube video I have ever filmed a few weeks ago that's out now. But I said to my team, you know, I always say that ChatGPT creates terrible contracts, but to be honest, I have not tried to create one with it. I just assumed it can't, right? So I said, I'm going to do a reaction video that's real. And whatever comes out of it, I'm going to put it on the internet. I filmed my screen. I did the whole thing. So I went on chat and I asked, I gave it a very good prompt and I asked it to create me a contract. It was horrible. It was horrible. It made me feel so much better. I was so relieved when I saw it. But it was, it was missing.
Gillian:
[25:44] You still have a job, right?
Sam:
[25:45] I was like, oh, thank God I still exist. But I, I mean, maybe it'll get better in the future. But here's really the thing. I mean, first of all, I can just tell you that it was like woefully, not only inaccurate, but incomplete. It had like four or five sections. It was bad. The thing, here's the thing about legal stuff though. You don't know what you don't know. So unless you are a lawyer who then can go and chat and say, give me a contract that has XYZ provisions and make it say this and make it control like this and account for this and all that kind of stuff. You don't know what it's missing. And what I have seen now for eight years, way before ChatGPT existed, I can tell you with confidence that if you are using documents, whether you get them from chat, a friend, a downloadable free template online, whatever. If you're using documents that you don't feel confident about, it's like it's if you have nothing because you will still hesitate every single time you go to get a client you will still hesitate when you go on Instagram to promote your business because you won't be sure that you're legally protected so regardless of whatever you want to go do do what you need to do to feel confident that you have what you need that you are safe and that you can go forward and promote your business for
Gillian:
[26:54] Sure yeah that makes a lot of sense I don't know if you remember now but you talked about it being like the contract that ChatGPT created being too short and missing a lot of parts. And I'm just wondering if there was any particular things you want to call out. But I'll also say, it makes a lot of sense what you're saying about like, if you know what you're looking for, if you're a lawyer, you could maybe get a better result from something like ChatGPT, right? Because you could give it more specific instructions. And I can definitely see that because, you know, as a content creator, if I'm writing an article about such and such topic, if I know that if I know about that topic, And if I know what I want that article to look like, because I've written lots of articles like that in the past, I can give ChatGPT really specific instructions, and then I can effectively edit whatever it gives me. But I know that somebody who doesn't know about the subject matter, and maybe doesn't have as much experience creating content, they're not going to be able to get nearly as good of a result with it, right? And it's probably not going to be an accurate article that they ultimately create with it. So I don't know. Is there anything you want to add about specific faults that you saw with that contract that ChatGPT created for you?
Sam:
[28:00] Yeah, I mean, perhaps most alarming for anybody who was in the content creation business or coaching, consulting, it had nothing regarding a disclaimer. It had nothing regarding warranties or guarantees language, which is super important from a legal perspective that you're telling people, I'm not guaranteeing you any sort of outcome or result as a part of you buying this thing or joining this group or whatever. It did not have any indemnification clauses, which is where we stop liability being passed on to us from third parties who aren't in the contract. It was pretty much missing everything. It was missing an entire agreement clause, which says that this contract is the entire agreement that you guys have agreed to so that the person can't come back later and said, but offline, you told me that you would do X, Y, or Z, even though I know the contract says this. That's really important and that comes up. It did not have the choice of law or venue clauses that I spoke about. Earlier, it kind of lumped it all into one sentence, but the sentence wasn't correct and it wouldn't have accurately covered you. And I guess one of the things that was interesting for me to reflect on too is that something I think my customers always report being happily surprised about
Sam:
[29:08] These documents are living, breathing documents. And so I encourage my customers to update these quarterly. And so I also encourage them to update them under what I call the, oh, I didn't know I had to cover that clause, which is like when a customer or a client does something to you or in your business that you realize like, oh, I see that that is not super clear in my contract. I'm going to go back and I'm going to make that really clear so no one can do that again.
Sam:
[29:37] Or it's like when technology changes, like chargeback threats, for example, have changed over the last couple of years. AI stuff has changed. Like my customers are coming to me now and saying, how do I protect my content so that the people purchasing my course can't take it and plug it into AI and do things with it. So there are things that are changing. You need to have enough confidence and skill to be able to go back into these things and update them. And only you are really going to know how that works with your clients and what's coming up and yeah, all of that. Yeah, you have the opportunity to make it say what you want it to say.
Gillian:
[30:11] Yeah, for sure. Okay, so I think the last thing that you mentioned with protecting yourself legally was business insurance. So I would love to know, how would you recommend somebody chooses good business insurance that will actually offer them coverage? Because personally, here's been my experience. When I was shopping for insurance for say my house or my car, there are local offices where I can go in and talk to real people, right, and buy it that way. And there's some peace of mind that's given by seeing a physical location and a real person that you know you can go back to. But with buying business insurance, especially for an online business, there aren't necessarily as many local options. And so many of us are buying the insurance online from companies where at least we're not seeing their physical location. So how do you know if a business insurance company is legit and how can you choose the right one for your business?
Sam:
[31:08] Yeah, it's a really good question. So I recommend trying to find... It's almost like a mix of both the options that you presented because I recommend finding a business broker that could be located near you. It could be somebody you meet online, but a business insurance broker who then goes around and shops for a policy for you from a number of different insurance companies. So instead of you, like you mentioned, like if you were going to get car insurance, you would maybe go to Geico, ask Geico for a policy, right? With an insurance broker, they might contract with like 5, 20, 30 different insurance carriers and they can go out and get you quotes from all of them and bring them back to you and present them to you or tell you like the ones that they thought were the best.
Sam:
[31:52] So that's usually the option that I recommend for people who are in my Ultimate Bundle. There are a bunch of recommendations for brokers that I've used and liked who I can recommend because I trust them now and they've worked with my customers. But they are out there and they are licensed in many states, if not all the states, so they can work with you regardless of where you are. But I recommend shopping around and trying to be as clear as possible when you do speak with brokers about not only what kind of business you have, but what you sell and how you sell it. That's often where people fall short. They don't tell, they will tell people like, oh, I have this online business, I'm a health coach. And then they don't tell people like, oh, by the way, I do in-person retreats and I sell digital products and I have this group program and I see people privately and then they're only covered for like one of those things. And they think that just because they told someone that they had a type of business that they're covered for whatever they do. But that is not how it works.
Gillian:
[32:46] And there are different types of business insurance. Can you speak a little bit to that? What are the most common types and what types would an online business generally need?
Sam:
[32:57] Yeah. So there are over a dozen different types of business insurance, but the two most common for online business owners is professional liability insurance, otherwise known as errors and omissions or E&L, and also commercial general liability insurance. So those are the two that most people need or get. Sometimes they only need one of those. Sometimes people need both. As your business grows, there are all kinds. I have many, many different policies now with having a multi seven figure business. It's brought a much different level of insurance. I have lots and lots of different policies. But in the beginning, that's really all you need. The difference between the two is that professional liability insurance or, you know, is sometimes what people like commonly think of as like a malpractice insurance, but it's for people to cover like whatever happens as a result of their work or a result of whatever they sell. So for some of you, if you sell products, you might need like a products liability version of that, right? So that if your mug breaks and it cuts somebody's skin, that's the kind of thing that's covered. Or you sell curling irons and it burns somebody. That's the kind of thing that covers. In the consulting and coaching industry, this might look like something more like you give somebody money tips and then their money investment doesn't go so well. So they sue you for it. And that's the kind of thing that's covered by professional liability insurance.
Sam:
[34:18] Commercial general liability insurance covers bodily injury and property damage to others. So it really depends on kind of like what kind of business you have. And again, even if you have like an all virtual business, but then sometimes you host retreats or you teach in-person workshops, like that might be another kind of insurance that you need.
Gillian:
[34:35] If you don't do anything in person at all, and it is all online, is there any reason why you might need that kind of insurance?
Sam:
[34:43] Yeah, I have it. And I always have had it just in case. I also should mention for like the sake of ease that it's a lot less expensive than professional liability insurance. So it can kind of be bundled. And so when I got my insurance, it was like, why not just add that on? I mean, even like going around and giving talks, like I spoke at Kit's Craft and Commerce talk last year and at a conference last year. And it's like, I don't know, I taught a workshop. Like maybe they would include me in this. So there are all kinds of scenarios where you can consider it. Yeah.
Gillian:
[35:13] And like you said, it tends to be pretty inexpensive. I have both and to be honest, I don't really know if I need that commercial insurance, but it doesn't cost very much per year at all. So it's like probably better to just have the coverage, you know, better be safe than sorry.
Sam:
[35:27] Yeah, that's what I consider. And I think it's important for people to know too that Often these kinds of insurances cover your work with people or the product that you sell or the service you provide, but they don't often cover the marketing that you're doing in order to sell all those things. And at least in America, we can be sued for things that even are just free content, right? So like something you say on YouTube, something you say on your podcast or on Instagram can still come back to you. And so it's important for people to know that there's still liability that exists there and that depending on what you talk about, depending on your subject matter, you might want to consider looking for business insurance that would cover you for blogging, video production, podcast, that kind of stuff.
Gillian:
[36:10] So you talked about this one main legal mistake that people make with not getting legal protection soon enough and legal protection being these kind of three main things, having that LLC or whatever the right business structure is for you, having the contracts or the terms and conditions and then having this business insurance. Beyond that, are there any like common legal mistakes that you see new business owners making?
Sam:
[36:37] Yeah, I would say that once you get those pieces in place, not like standing within it, right, that you've done the work that you've gotten these things, like if you've said no refunds, for example, when you start to allow people to break little pieces of their contract, this is something that came up in a training the other day where someone was saying, oh I have this very specific payment policy in my contract but you know I'm I tried to be really relaxed about it and so like I let this person you know have some extra time and yada yada and now she stopped paying completely and I said well here's the legal problem you've now broken the contract right you've you've already given the signal it's like a toddler who you now like venture boundaries do and now they're going to push some more you can't really stand within your legal boundaries once you start letting that stuff go. So it is important to like have these things in place, enforce them. I think working on the mindset piece that you're not being a jerk, you're not being mean by, you know, having boundaries. It's all okay to ask for what you need or to put up that boundary when you need to.
Gillian:
[37:39] Yeah, for sure. Okay. Well, thank you, Sam, so much. This has been really helpful. I love how simply you broke everything down.
Gillian:
[37:46] It really doesn't have to be overwhelming, you know. So thank you so much for that. To wrap this up, could you tell us a little bit about your podcast called On Your Terms? What do you talk about on the show? And why might somebody want to tune in and listen?
Sam:
[38:01] Yeah, so On Your Terms is a podcast for online entrepreneurs who want to grow a sustainable business with it being on their terms without burnout or breaking the rules by accident. So You can also find my book when I start my business. I'll be happy anywhere books are sold. And I would highly recommend getting my weekly newsletter, Sam's Sidebar. It's a free newsletter that drops in your inbox every single Tuesday to learn how to grow your online business.
Gillian:
[38:30] Awesome. Well, we'll make sure to include links to all those things in the show notes down below. And thank you so much again, Sam.
Sam:
[38:37] Thanks for having me.
Gillian:
[38:38] [outro] All right. That is it for this episode. Thank you so much for listening. Before we wrap this up, I just want to remind you that if you haven't already looked up the 100k Method podcast series, you're definitely going to want to do that and give it a listen very soon. The 100k Method podcast is a 10-episode podcast series that's going to teach you everything you need to know to get an automated sales system for your product set up and running online so that you can start seeing consistent sales month after month. All right. Well, that's all for this episode. Thank you so much for listening. I'll be back again next week with another one. Until then, stay focused and keep taking action.
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