Maybe you’ve lost your nine-to-five desk job. Perhaps you’ve decided to quit the office rat race altogether. Or maybe your inner spark simply ignited into a consuming fire to begin anew. Whatever the reason, you’ve decided to turn your yoga practice into a full-time business.
You’ve obtained all of your certifications. You’ve lined up your financing.
Prior to closing the windows and cranking the heat, focus your drishti on the following six tips to keep you in the flow and out of court:
· Incorporate Yourself. Depending on the size of your prospective business, a simple limited liability company may work for you. If you have practices in multiple locations or are offering products as well as services, you may want to form a C- or an S-Corp. There is no one correct way to get incorporated. But there is a wrong way – do nothing. Do not expose yourself to potentially disastrous personal liability. Speak with an experienced commercial lawyer about your specific needs.
· Check Your Lease. Many new businesses fail to read the fine-print on leases restricting the very activities those businesses intend to conduct. Have an experienced commercial real estate lawyer review the lease before you sign.
· Obtain Proper Insurance Coverage. Not all policies are alike. There is insurance tailored for studios and insurance for teachers. Depending on how you classify your instructors, you may need multiple policies for them, too. Liability, employee, and director/owner policies differ from state to state. Be sure to discuss your options with a competent insurance professional before you open your studio to the public.
· Mindfully Classify Your Staff. There is a difference between “independent contractors” and “employees” in the law. This difference affects how your staff is paid, taxed, insured, and treated by the courts in the event of an adverse job action. Confusingly, even if you consider a staff member to be an independent contractor, if you exert too much “control” over that person (scheduling, instruction, etc.), the law (taxing authorities, courts) may treat that person as your employee. Speak with experienced employment counsel to better understand this tricky but important distinction.
· Use Narrowly Tailored Waivers and Releases. Have your students sign waivers and releases before they begin their practice with you. Be sure to include release language for your instructors as well as the studio. Many lawyers advise against asking students about pre-existing injuries. Consult with an attorney whom you know and trust on this issue.
· Know Your Staff. Vet your staff. Verify a person’s training. Look for feedback from the studio’s students once a new hire begins. Speak with competent employment counsel about preforming a legally permissible background check.
Like every yoga practice, each business has its own unique opportunities and challenges. Following these six easy steps will help minimize your risk in your new yoga venture. Speak with competent tax, insurance, and legal professionals before you get started. Or meet with an experienced attorney to provide a professional audit of your current business practices.