The 7 Legal Mistakes I See New Entrepreneurs Make (That Are 100% Preventable)

So you’ve finally taken the leap and decided you want to start an online business. Maybe you even have a few clients already, or your first offer is up and running, and I know you’re doing all the things, like you’re posting and emailing and building, and then posting again. In the back of your mind, you’re wondering, wait a minute, did I skip a step or do I have everything I need to make sure I’m operating my business the right way?

I know you want to build a sustainable and successful business, one that brings in consistent revenue. And if you’re anything like me, one that provides you with a lot of time freedom, but you’re also starting to realize that there’s like a lot more to this whole business thing than Canva graphics and content calendars.

The problem is most business owners don’t know what they don’t know when it comes to the legal stuff, and I don’t blame you, but that blind spot can cost you. Whether it’s shoddy contracts or tax confusion and not paying them in time, or just not having the things in place so that you actually can get paid on time, none of it’s good.

So in today’s episode, I’m breaking down the seven top legal mistakes I see new entrepreneurs make and how to avoid them. If you’ve been feeling unsure or just overwhelmed by what’s required to start an online business or make the one that you have legitimate, then this episode is perfect for you.

Mistake number one is flying blind for too long and thinking that you can wait to get legal protection for your business until you’re more successful.

Here’s the thing, legal protection only works from now moving forward, so if you wait to get legal protection in place, you won’t have any protection for anything you’ve done already. That means any clients you’ve already worked with, any content you’ve already put out there, none of it is protected. So that’s for one. That’s one reason why it’s not good to wait.

The second reason why it’s not good to wait is because I have helped thousands and thousands of people around the world learn how to start their online businesses. And I can tell you that one consistent theme I see amongst those who said that they would wait until they were more successful is that they actually never ended up getting there because, they were so nervous to be seen online, to put out more content, to take on clients, to raise their prices, to say no to refund requests or anything like that because they weren’t sure that they had a legal leg to stand on. Instead of you thinking of this from the perspective of, when I get successful, I will get legal in place. What I need you to adopt is a mindset of future proofing instead, which is that wherever you are headed, where you’re headed six months from now, one year from now. Three years from now, legal protection starts today. because again, it’s not retroactive, but it’s also part of what’s actually going to get you there. So instead of thinking of it as I will get legally protected when I get successful, it’s, I’m going to be successful because I got legally protected and therefore you felt confident enough to put yourself out there and be seen.

Two is that I see people often focus on getting the wrong legal things in order and not having the right legal things in order. For example, people too often focus on getting things like trademarks for their logos or wanting to trademark their business name or their course name before they’ve even opened their digital shingle online. It’s sort of like skipping to the part of decorating a house that you’re building before you’ve ever even laid the concrete to build the foundation.

When you are starting an online business, the most important part is to make sure you have a very solid foundation so that you can build a beautiful house on top of it. That will last a very long time, and that will allow you to decorate it many times and redecorate it many times in the future.

Don’t get me wrong, things like trademarks and copyrights are super important, and I’m not telling you to never do them or to wait or anything like that. I can’t tell you one way or the other. What I am telling you is that they are not a reason to wait to start your business. They are something that you can do alongside starting your business, but it’s also important that you even know like what is worth protecting. What’s going to be your bread and butter as I tell my customers and really figuring out how can I get the rest of my business’ legal foundation in place while also layering on things like trademarks and copyrights.

For example, I will sometimes get emails from people who are kind of obsessing over making sure that they have a trademark when they haven’t even started their business yet. By the way, it takes like almost two years to even get a trademark approved. So again, something you do simultaneously, but they’ll be asking me about this and I’m like, wait a minute, have you formed your business? Do you have business insurance? Do you even have contracts for what you’re selling? And they’re like, no, because I’m the most freaked out that someone could steal my business’s name or my, my product name or something like that, or even my logo.

And it’s like. It’s okay. Let’s get the legal foundation set with those things, and also we can talk about whether or not you’re in the right place or whether or not what you’re even talking about qualifies for that kind of legal protection yet.

The third mistake is trying to piece it all together yourself or using tools like Chat GPT, or even Google to try to create your own contracts because here’s the thing, at the end of the day, if you don’t feel comfortable and confident that your contracts and policies say exactly what you need them to say in order for you to be protected and therefore feel confident going out to work with people, then it’s not going to help. We need you to not only have the right things, but I need you to know what your contracts and your policies actually say so that you know when and where to tailor them and how to describe them to your customers if it ever comes up.

As much as I would love to tell you as a new business owner that getting a contract or policy in place, it’s just a one time thing and you can forget about it for the rest of your life. The truth is, if you are entering into the online world, if you’re a creator, a coach, a service provider, you’re selling products through an e-commerce store, then you are entering into a world that is constantly evolving, which, it’s a good thing, but legally speaking, that means you need someone who’s going to keep you up to date. You need to be working with someone you trust.

Now, I sell legal templates and the Ultimate Bundle®. If you like me, you like my stuff, great, and then you get updates from me, those are all included. The contracts are kept up to date and all of those kinds of things, but if you choose to work with someone else or you hire some other service or something like that, you just need to make sure that you are keeping those things up to date.

The fourth mistake I see amongst new entrepreneurs is relying on software or tools free policies that they give you. So whenever you sign up for a program to maybe, let’s say, house your online course or host your membership. You might be provided free policies to use that look like the company is giving you a free terms of use policy, for example, to include at checkout.

The reality is that most of these that are provided are woefully inadequate, so they do not have nearly enough of the information that you need in it. They’re often missing key legal phrases and paragraphs that you really need to stay legally protected. And even worse, in nearly all of the ones that I’ve ever checked out that customers have sent my way, they also tend to protect the software or the tool that gave them to you and not you as the creator the most. So sometimes they will actually have provisions in them that indemnify or protect the company and not you, which is less than ideal.

The fifth mistake is thinking that you don’t need business insurance and that you can wait till later on to add it on. So let’s break down a little example. Let’s say that in June of 2023, you coached a client online and you didn’t feel like getting business insurance in place because you thought, I’ll wait till later and see if my business gets bigger. You had a lot of expenses to take on, so you thought you’d put it off. We fast forward to March of 2025, and you’ve decided your business is doing a little bit better. You decided to get business insurance in March of 2025.

Three months later, in June of 2025, all of a sudden, this nasty letter from a lawyer shows up in your mailbox from that client that you worked with back in June of 2023 saying that they’re thinking about suing you. Now you do what anybody would do. Well, first you freak out, and then the second thing is that you then send that letter over to your business insurance policy because you think, Hey, about three months ago I just got business insurance, so I should be covered for this, right? Wrong.

You didn’t have business insurance in place at the time that you worked with this client, and therefore you will not be covered for it unless you have a very specific kind of policy, which most people like 99.999 repeating percent of people do not have. Right? So the really important thing for you to know about business insurance is that you had to have had it in place at the time that the “incident” occurred.

So if you worked with that client back in 2023, and that’s when they said that you did something horrible to them, or they had a bad experience with you or whatever, that’s when you needed to have had insurance, not now, when the claim is filed against you. In fact, you have to have it in both time periods.

You have to have had your policy in place back when you worked with them in June, 2023, and you also have to have it in place in June of 2025 when you got sued or threatened to be sued. You have to have it continuously throughout. In fact, your business insurance couldn’t have even lapsed for a couple of days during that time period.

You have to have continuous coverage for that whole time period. So it’s very important to not put off business insurance until later on for this reason.

The sixth mistake is having a non-business bank account as your bank account. Now, this is important for everybody for several different reasons, but it’s especially important for those of you who already have LLCs because once you have an LLC, you are actually legally obligated to have clean and clear financial records.

You need to have very clean delineation between you and your business. If you’ve listened to any of my stuff before, you know, I talk all the time about how LLCs are great in terms of them providing you with some limited personal liability protection. But that protection is only extended to you if you actually act like a business.

There are several different ways that you can act like a business, and I’ve covered this many different times, many different ways. But one of those ways is to make sure that you have a business bank account and you actually only use it for your business, and you only use your personal account for your personal stuff.

Last but not least, the seventh mistake is not getting help and spinning your wheels and not moving your business forward. I’ve seen it time and time again, people spend more time googling and researching it and consuming content and doing all of these things than it would just take you to actually get it done.

A lot of the things that I teach people can be done in one day. Over a couple a handful of days. If you wanna spread them out, you really can start your online business in just a few days. So here’s the thing.

If you just listen to this episode and you realize you’re making, I don’t even know how many of these mistakes don’t fret, because I’ve got a free legal training that you can go watch right now that will fix all of these mistakes in a flash.

I swear to you, it is way easier to get this stuff done than you might think. Just give me a second of your time by dropping your name and your email and you click that link down below in the show notes for my free legal workshop, Five Steps to Legally Protect and Grow Your Online Business because in this workshop I’m going to teach you exactly how to set up your online business the right way, keep your content safe, and make sure you get paid on time.

So click the link down below in the show notes to sign up for my free workshop. But if you have any questions for me, my inbox is always open. Hit reply on any of the emails that you get from me. I’m happy to jump in there and help you. I answer all my emails. So I’m happy to go in there and then also you can reach out to me on Instagram, DM me at Sam Vander Wielen. I’m happy to help you there. With that, I’ll see you next Monday.

Thanks so much for listening to the On Your Terms® podcast. Make sure to follow on Apple Podcasts, Spotify, or wherever you like to listen to podcasts. You can also check out all of our podcast episodes, show notes, links, and more at samvanderwielen.com/podcast. You can learn more about legally protecting your business and take my free legal workshop, Five Steps To Legally Protect and Grow Your Online Business at Samvanderwielen.com and to stay connected and follow along, follow me on Instagram at samvanderwielen and send me a DM to say hi.