How Often Do Legal Suits Affect Small Businesses And Can They Cause Financial Harm?
Starting and running a small business effectively and successfully for the long term is an extremely difficult task in the United States. Even though just under 100% of all businesses in the United States are small businesses, the grand majority struggle to even last 5-10 years and a large portion do not even last past 12 months. There are many reasons why a business may not be successful. It can never be known how the market and the future will be for a new business which is why starting a brand new venture can be so risky. If you do find that your entrepreneurial adventure did not quite work out as you planned and you are simply unable to bring in the cash flow you need to stay open, then it may be time to connect with a professional.
In New York, Harry D. Lewis is a New York City business bankruptcy attorney with over four decades of experience helping business owners and leaders find optimal ways to reduce and manage overwhelming debt.
Can Lawsuits Impact a Small Business’s Operations?
It should be expected that a business that has any amount of success or is in business for some amount of time, eventually will face a legal suit. This is the nature of operating a business with a public consumer market. And, if an expensive legal suit comes about with substantial grounds, overcoming such a situation can be devastating for a small business. Depending on the circumstances that the suit came to be, what the allegations are, the suit’s success, and the value of the suit, a small business may falter and be unable to absorb such a situation. As a result, the financial implications and those that affect a business’s reputation may be much more than a small business is able to withstand and pay for.
The reality is that lawsuits are a part of running businesses.
- Every year in the United States as high as 53% of small businesses are sued.
- Threats of lawsuits on an annual basis happen to 43% of all small businesses.
- It is estimated that at any time, about 45% of small businesses across the country are dealing with active litigation.
- Liability suits can be pricey with the average coming out to $54,000 or more.
- During the time a business is in operations, it is more likely than not to experience a lawsuit. As high as 90% of all businesses are subject to legal challenges.
- Small business industries in the United States are subject to, at minimum, 12 million legal challenges annually.
- If a small business is earning at least $1 million a year, the average legal cost paid is $20,000.
Speak to a New York Business Bankruptcy Attorney
Legal challenges and lawsuits are so prevalent for business owners that more than 75% of those in operation across the country list concerns over these issues as a primary source of distress. A lawsuit may or may not be the reason why your business becomes financially insoluble. However, paying legal fees does not help your bottom line. If you would like to review your options when your business finances are not where they need to be, please do not hesitate to reach out and call the New York business bankruptcy lawyer Harry D. Lewis at 212-813-8393.