3 Reasons It’s Essential to Do Your Due Diligence as an Entrepreneur

There’s a careful balance to be struck by anyone who wants to be a successful entrepreneur. On the one hand, they need to be action-oriented enough to actually get things done instead of procrastinating and overthinking ad infinitum – and on the other hand, they need to be mindful, attentive, and detail-oriented enough to ensure that they don’t sabotage their business from the outset, or create a situation that will lead to future trouble.

As an entrepreneur with a great business idea to get off the ground, it’s important that you have a bias for action – but it’s also crucial that you do your due diligence and research and plan appropriately, in order to fend off future complications and troubles.

Here are some reasons why it’s essential to do your due diligence as an entrepreneur.

In order to protect members of the general public

The first a most significant reason why it’s important for you to do your due diligence, is not really to do with your business at all – at least not in any specific, defined sense.

Rather, it’s for the sake of protecting members of the general public who might otherwise be put in harm’s way by false advertising, improperly regulated or secured goods, irresponsibly promoted services, and so on.

Of course, the potential scope of harm to the general public will vary from business to business, and will also depend on which industry you operate within. For instance, with the massive trend of legalized and commercialized cannabis, you need to de-risk your business and your customers.

Cannabis Security Plans are important, for example, because of the potential for exploitation by criminal elements, and the ease with which harm can be done to the public via goods that have been contaminated, forged, or tampered with, in that industry.

Whichever industry you’re in, however, be very mindful of harm-reduction, and don’t make yourself complicit in the injury of a member of the public.

In order to protect your professional name and reputation

The long-term success of a business isn’t just driven by such things as its marketing efforts, or even its turnover. Far more fundamental is the name and reputation that the brand (and owner) develops over time.

To put it simply; when you first burst onto the scene, you are an unknown quantity to essentially everyone. People are naturally reluctant to give their money to companies that they are not familiar with, and names that they don’t recognise or have any particular reason to trust.

A big part of your initial mission, therefore, is to build trust and good faith by not only marketing efficiently, but behaving in an upstanding way, and offering a product or  service that is high-quality and genuinely useful.

To the extent that you succeed in this task, your business will be able to thrive, and expand over the coming years. If, however, you fail to do your due diligence, and allow your product or service to be presented in a terrible and dysfunctional format – and in particular if you also drop the ball with customer service – the reputation you build will head completely the opposite direction.

When you have a bad reputation in business – as an exploitative, unscrupulous huckster, for example – there is generally no coming back. So be sure that you are at least attentive to detail enough to prevent that from being a problem.

In order to avoid future lawsuits and legal issues

Causing someone harm is a worst-case scenario for your business, but even if no particular individual is necessarily harmed by malfeasance on your part, you can still end up blundering your way into future lawsuits and legal issues, if you are not careful enough at the outset.

Many start-ups can get away with quite a lot, initially, simply by virtue of the fact that barely anyone knows about them or pays attention to them.

As you become more prominent, however, issues such as a slogan, logo, or brand name that infringes upon some other company’s copyright, will tend to get you noticed in the kind of way you don’t want.

If there’s any doubt or ambiguity as to whether or not you’ve addressed all your legal obligations, consult with an expert. But don’t be caught off guard.

This is a contributed post.