A recent survey has shown that many small businesses have a lack of awareness when it comes to the legalities of running their company. The study, by the Department for Business Innovations and Skills, shows that only 32% of small business owners feel confident in their understanding of employment law and their role as an employer.

Most worryingly, 34% of those asked think employment law obligations are ‘not relevant’ to their business, while 20% had concerns as to whether they were meeting these obligations- even if they understood them.

Employment relations minister Lord Young said: “We know that running a small business is both challenging and rewarding – and that this combination often fuels a successful enterprise.

“The essential job of managing employment law need not be one of these challenges.”

The findings coincide with Business Link launching a new tool to help small business understand the legalities of starting up: www.businesslink.gov.uk. The tool covers all elements of employing staff, including pay and pensions, managing staff and dealing with employee issues.

Ken Winnard, founder of graphic design consultancy, Design Force, has used the My Business tool to help develop his company, Ken said:

“As we’ve grown the business, the site has helped me with areas like recruitment. When we employed a new business person a couple of years ago, I needed to create a new employment contract, and the site’s tools helped me achieve this by setting out the information I needed to include. I would otherwise have had to have used a solicitor, so it definitely saved me some money.
“You can also check your legal responsibilities towards staff as an employer and make sure you’re compliant with different regulations, with the site taking you through the recruitment process.”

If you’re running a business and you want to expand, you’ll need to consider the best options for meeting your needs – these could include outsourcing or training existing employees, or recruiting new staff.

Taking on people will always mean some form of investment, but if successful, employing staff will allow you to expand and make your business more valuable in the long-term.