Don’t start a side hustle without taking this key legal step

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Whether you’re struggling to keep up with rising costs, looking to make money from your passions or just want a extra financial wiggle room, you may be considering picking up a side hustle.

You’re far from alone. More than 1 in 4 American adults currently have a side job in addition to their full-time occupation, according to a recent survey from Bankrate.

But as soon as you dip your toes in working for yourself, it’s essential to make sure your intellectual property is legally protected.

“At the bare minimum, you need a trademark,” says Darlene Harris, managing attorney at Power In Protection in Charlotte, North Carolina.

Even if your business is only making a few hundred bucks at the beginning, you could get yourself into trouble if you don’t take a few small steps to protect your brand, your work and your personal liability, she says.

“Anyone who is selling any product or service, if you are an entrepreneur in any way, shape or form, you need this,” she says.

Why you need to protect your brand

Harris, who specializes in intellectual property law, compares a trademark to owning a deed to a house. Until you have a trademark, your name, the name of your business, your logo and your slogan are like property that other people could theoretically inhabit.

“If someone else says, ‘This is my house. I live here,’ all you have to do is pull out the deed,” Harris says. “On the flip side, if you don’t have a deed to your house, now you have to go through a whole squatter’s rights fight.”

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And fight you people will, Harris says.

“If you go to get your business off the ground and you’re using a name that’s too similar to someone else’s, they’ll sue you,” she says. “They’ll say, ‘Hey, you’ve been using this name. I don’t care if you’ve made $500. I want my percentage of that $500.”’

Why it pays to speak with a lawyer

The biggest mistake aspiring side hustlers make is not thinking about the future of their business, Harris says. While your content creation or crafting business may seem like small potatoes now, it will ideally grow into something bigger and in need of evolving legal protections.

“You have to think big,” Harris says. “Where do you want to take this, and how do we protect not only what you’re doing now, but your plans for the future?”

The last thing you want to do, she says, is build a thriving and lucrative brand only to find out that someone else is legally entitled to a piece of your profits.

That’s why an aspiring entrepreneur would be wise to sit down with an attorney, who can provide an intellectual property strategy that goes beyond a few legals documents you may be tempted to find for cheaper online, Harris says.

Harris says she’d be wary of any firm charging less than $1,500 to get your documents in place and to help you come up with a strategy.

Other protections to discuss with your attorney include copyright — similar to a trademark but for work you’ve authored, such as photographs, songs or articles — and forming a limited liability partnership, which helps separate your business and personal assets, and protects you financially in the event of a lawsuit.

“A lot of times people underestimate what they’re building. They think, ‘Oh, it’s just a side hustle,'” Harris says. “But if they’ve been using this name, they’ve been building this image or this brand, it’s so important that they own it.”

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