Growing your business feels amazing. More customers, more revenue, more people joining your team.
But growth often exposes gaps in your HR foundations that you didn’t even know were there.
Processes that worked fine with three employees can quickly cause problems when you have 10 or 15, especially when it comes to compliance and consistency.
I’ve written about the legal risks that most often trip up growing businesses, and how to avoid them.
Read it below ๐
Growing your business feels amazing. More customers, more revenue, more people wanting to join your team. You're finally getting somewhere.
But growth brings some unexpected legal challenges that may not have been on your radar when you started.
Those casual ways of doing things that worked fine with three people can create real problems once you hit 10 or 15 employees.
The most common problem areas are:
1. Outdated employment agreements
That template you downloaded years ago probably doesn't cover what you need now.
Business owners can get caught out when employees leave because their agreements don’t properly cover confidentiality, final pay requirements or non-compete clauses.
Worse, if your agreements don’t reflect current labor and employment laws, you might be giving people more rights than you realized or failing to protect your business properly.
2. Missing policies you actually need
When you had a handful of employees, you could handle issues as they came up. But as you grow, you need written policies to ensure consistency and legal compliance.
Without clear guidelines on things like your disciplinary process, complaint process or PTO and leave policies, you might make inconsistent decisions that lead to discrimination claims or lawsuits.
3. Weak hiring processes
When you're growing fast, it's tempting to rush through the paperwork.
But sloppy Form I-9 employment eligibility checks can lead to fines ranging from hundreds to thousands of dollars per violation, and more than $25,000 for repeat offences.
The financial risk is the same whether you have three employees or thirty.
4. Untrained managers
You promote your best employee to supervisor, great! But have they ever dealt with a performance issue?
Do they understand what they can and can't ask in disciplinary discussions?
Even well-intentioned managers can make costly mistakes if no one has taught them the rules.
What it costs when things go wrong
Employment lawsuits are on the rise. It’s not just the money, though settlements and judgments keep climbing. It’s the time and stress that should be going into your business.
Even defending a claim you win can eat up weeks of your time dealing with lawyers instead of customers.
Why sorting this early makes sense
The best time to get your HR sorted is before you need it. When you’re not under pressure, you can think things through properly.
Too many business owners scramble to write parental leave policies when an employee is already expecting a child, or to put flexible work arrangements in place when they’ve already received a request.
If you’re looking for investment, having proper agreements and policies in place actually speeds things up. Investors want to see that you’ve got the basics covered.
Getting ahead of yourself
You don’t need a large HR department, but you do need the foundations right.
Review what you have now. When did you last update your agreements? Do you have the policies you actually need? Can your managers handle HR situations without making costly mistakes?
If you’re planning to grow or are looking for investment, get your agreements and processes reviewed now. It’s much easier to sort these out when you have time to do it properly.
You’ve worked too hard building this business to let preventable legal problems derail it.
