If so, you are not alone. I have met quite a few small business owners who proudly tout their one-page agreements as though they have found the Holy Grail of business contracts. Unfortunately that is rarely the case.

One page business contracts are more like Dixie® cups: inexpensive, designed for uncomplicated situations, and if you drop one on the floor, it won’t make too much of a mess. However, if you step on it, the cup crushes underfoot.

For example, there are only just so many “what ifs” that can fit on a single side of an 81⁄2″ x 11″ piece of paper. Therefore, what usually gets left out of the one-pager business contract are the “elephants” — enormous and threatening issues that can cause major problems down the road (e.g. confidentiality and intellectual property violations).

If legal issues arise that are not covered by your business contract, it’s like an elephant stepping on a Dixie® cup. You and your company get flattened.

Here’s a look at some of the “elephants” that are often omitted from one-page business agreements and why they may be significant to your small business:

1. Confidentiality

Are you sharing your company’s confidential information with someone else? For example, imagine that you are working with a business strategist to help develop a business idea and then the strategist turns around and uses it with a better-capitalized colleague. How would you like it if they swiped it? Or used it for their own ends?

2. Intellectual property

a. Copying: What are the specific uses that you are permitting for the creative work you provide? For example, you can limit the usage of your work to specific people instead of per say, an entire company. Consider this: will you permit copying of your work? Or taping of a strategic presentation?

b. Other uses: In the course of your work, you may be generating ideas or deigns for a client. What happens with the ideas that the client does not choose? Have you made sure to retain them for your use with other clients?

1. Three Legal Tips to Help Entrepreneurs Avoid Social Media Liability

As the popularity of social media being used as a business tool rises, so does the risk of legal implications. Though many attorneys see social media as too much of a liability and advise their clients to avoid it, social media has proven that its benefits far outweigh its risks.

Here are three tips to help entrepreneurs avoid social media legal mishaps. Read more

 2. Is Your Website Legal?

There are certain requirements and guidelines regarding websites one must follow in order to comply with federal and state laws. We may see reading privacy policies and terms of use agreements as boring or unnecessary, but their presence on websites, especially those that collect any type of information from its visitors, are essential to avoid any lawsuits or legal trouble. Is your website in compliance? Read more

3. This Means War: 24 Small Business Attorneys Share How to Deal With a Business Breakup

Business breakups, much like relationship breakups, can be hard on both parties, causing stress, bitter feelings, and an unclear horizon for the future of your business. While the cliché “nothing lasts forever” may bring some comfort to those dealing with a partnership bust, it makes the breakup no easier to navigate.

Here are some tips from twenty-four of the nation’s top small business attorneys to help prepare, manage, and cope with a business breakup. Read more

4. 10 Intellectual Property Tips Entrepreneurs Can’t Afford to Ignore

Intellectual property, or IP, is a very important legal consideration for startups. It covers a wide array of legal ownership claims, including copyrights, trademarks, patents, industrial design rights and trade secrets.

Protect all your creations with these ten key tips and avoid possible infringement and expensive legal fees down the road. Read more

5. Law and Startup Order: Protect Your Small Business With These 5 Insurance Coverage Options

According to LegalEthicsandReform.com, Jim Cramer, host of CNBC’s Mad Money and co-founder and chairman of TheStreet.com “regularly mentions that civil litigation in America costs the economy 2% of GNP (Gross National Product) each year. In other words, the sum of goods and services in America is reduced by 2% because of the economic confusion, distractions, delays, and dislocations caused by the American method of handling civil litigation.”

There are several ways and reasons your business could be sued, but here’s five small business insurance coverage options that could help protect your company and employees. Read more

You have built a success small business. You have also created valuable intellectual property, and you have a great stable of solid clients. Every entrepreneur needs employees to move the business forward, but the last thing you want to do is spend valuable time and money training your competitor–which is what a former employee has the potential to become after leaving your company.

Employee poaching happens every day — when a company hires an employee from a competing business.

How can you protect your business?

Through the careful use of non-compete agreements.

Why should you be careful? Because non-compete agreements need to be worded carefully as their basic purpose is to prevent a departing employee from working. Or, at least, from working in any capacity that is the same or similar to what she was doing for you.

Courts (and the state laws) try to balance two perspectives. They want to reconcile the company’s need for protection with an employee’s need to obtain alternative gainful employment. Become too extreme in your wording (e.g. telling a file clerk he can’t work for a competing company anywhere in your state for five years after leaving your company) and a court will strike down your non-compete.

However, yes, you can come straight out and say “you can’t work for a competitor.” That’s the traditional form of non-compete. There are also a handful of other ways to protect your company and prevent employees from entering into competition with your business.

1. Non-solicitation agreements.

These kinds of provisions prevent employees from reaching out to your client and customer base (a fertile source of leads for the competition). They can also be worded to prevent former employees from poaching your current staff, luring them away to work for a competitor.

2. Confidentiality and non-disclosure agreements.

These ensure that any trade secrets your employee learns on the job stay with the company. They define the kinds of records and information deemed confidential and prevent the employee from disclosing them to a competitor or otherwise. The information really has to be proprietary, though. Don’t include public information–like a client list on your website–in your definition of confidential. It won’t fly.

3. Work-for-hire agreements.

Generally, intellectual property belongs to the person who created it. But not if you have a written work-for-hire provision.

These terms ensure that ownership of any documents, software, inventions, concepts–anything–that an employee created on the job remains with your company. In other words, the employee was hired to create the work for you, not for her own purposes.

Learn how they launched a multimillion dollar brand, fell victim to trademark infringement by one of the world’s largest beauty companies and won an $8.5 million dollar settlement against all odds.

Mixed Chicks’ Founders Build Multi-Million Dollar Brand

Several years after being introduced at a family gathering, Wendi and Kim instantly hit it off. They both shared a common problem as women of mixed heritage: frustration with using a concoction of several different products to tame their curly locks.

Mixed Chicks founders Kim Etheredge, pictured left and Wendi Levy pictured right.

As their friendship developed they soon realized that their common problem could become a viable business. The two entrepreneurs then set out to start a curly revolution and develop specialized hair care products for women of mixed race.

Armed with a new business idea they contacted a lab to develop their new hair care product. “We made lots of samples and shared them with friends,” said co-founder Wendi Levy. ”We knew that it was a hit based on the feedback from all of our friends.”

In 2004, Wendi and Kim debuted their new company Mixed Chicks, a hair care solution for women of mixed heritage. Using a grassroots advertising approach they built awareness of their e-commerce website and it soon took off.

“I’m sure at first we were happy with two sales, three sales a week,” said Wendi. “We would be like – ‘Oh my gosh! We got a sale!,’ she fondly remembered. Then our first retailer was a natural health food store [that became aware of our product due to our sampling efforts].

Their savvy sampling strategy drove word-of-mouth and demand. “People started to ask retail outlets for the product and that made them come to us and ask us about the product. Fortunately the grassroots approach worked for us,” Wendi noted.

When Small Businesses Face Trademark Infringement

As their business grew, by 2005 both Wendi and Kim realized they needed to move more product and started exhibiting at trade shows. Two years later, in 2007 the founders were approached by Sally Beauty Supply, the world’s largest retailer of professional beauty supplies.

When a Business Opportunity Knocks

“They were very interested in our product [at the time],” Wendi explained. “In 2009, they came to us again and said ‘it is a great day for Mixed Chicks.’ We were like really? Why?”

The beauty retailer was interested in carrying Mixed Chicks’ products in their retail outlets. For a small business, the prospect of partnering with a large retailer (boasting 4,000 stores) represented a big opportunity. Both Wendi and Kim were excited given they did not have a distributor and were selling directly to salons at the time.

However, after further discussions — learning more about the retailers buying policies — they realized the partnership was not feasible. “At that time we were working out of my garage,” Wendi explained. “And if they had a 60 thousand unit order, they [could] return it whenever they wanted. Trying to resell that product and just house it would have broken us as a small company.”

Also “because they were such a large distribution channel they wanted deep wholesale discounts. We were so small that we didn’t have enough margin to give them that kind of discount.”

Over the next couple of years, Wendi and Kim continued to nurture the business relationship in hopes of one day doing business with the large retailer.

What they did not know is that during the same period, Sally Beauty Supply had developed their own product line for mixed race women which came in packaging that looked all too familiar. With a cheaper price tag, the retailers’ imitation brand threatened to ruin everything both entrepreneurs had built.

All is “Not” Fair in Beauty and Competition

In 2011, Wendi and Kim learned through other retailers that Sally Beauty Supply had infringed the trademarks of Mixed Chicks’ products. Their retail partners were unknowingly furious that the entrepreneurs were selling their products so cheaply — however, it wasn’t Mixed Chicks at all. The new brand, Mixed Silk, launched by the beauty retailer was eerily familiar to the general public and the co-founders.

“Our customers were questioning our integrity and everything else; people were so confused,” co-founder Kim Etheredge explained.

“We got the call immediately, because it was advertised in their circular that goes out to salon professionals and individuals that are our customers.”

Some of the most successful businesses exist today because of great partnerships. For instance, an incredible 1970s partnership between the late Steve Jobs and Steve Wozniak brought about several of the most popular mobile devices consumers love — the iPhone, iPod, and iPad, produced by Apple Inc.

Indeed, partnership is a strategic move if all parties contribute beneficial resources and share a common vision. However, there are many inherent risks in a partnership arrangement, and for that reason, you must have an iron-clad partnership agreement in place.

What Your Next Partnership Agreement Should Address

Apart from the name of the partnership, the partners’ names, and the place of business, here are six things that every partnership agreement should include:

1. Business Description.

Describe what activity you plan to engage in. Keep in mind that it must be a lawful activity in your state for your agreement to be enforceable.

2. Duration.

Specify what date the partnership will begin and when it will end. It’s okay to state that it will end upon termination of the agreement or by some other occurrence.

3. Conflict Resolution.

Inevitably, differences in opinion will arise in any relationship, a business partnership being no exception. Put in writing how you will handle conflicts so that your business can continue despite varying opinions.

My advice: Begin with the end in mind.

The most important question to ask yourself about a strategic alliance is: Do I really need one?

Many small business owners run around “collecting” partnerships for the sake of having them, without focusing on whether their own business needs will get met. Or whether the work to create and sustain a business alliance will outweigh its benefits.

Don’t start by thinking, “I want to form an alliance – who can I bring on as a partner?” Instead start with, “I have a business goal and an alliance is a good way to get me there.”

Selecting Power Partners in Business

What are your immediate business goals? The answer to this question is vital, because it will help you decipher a) whether you will truly benefit from an alliance b) if so, who is the most appropriate ally for your company, and c) what is the best way to engage them.

For instance, let’s say you have decided that you can achieve your business goals better, faster, and more efficiently with an ally — rather than by yourself. If so, it is time to choose the right “power partners.”

Power partners are people or companies that can give your business the boost that you’re seeking in the way that you’re seeking it.

How do you choose? Before you align yourself with a new business partner you’ll want to ask yourself if the person or company:

1. Offers products or services that complement yours (direct competitors are often not a good power partner choice)?

2. Attracts the kinds of clients you want to attract?

3. Has a reputation that is unscathed (do your homework on this one)?

4. Is in an industry that you want to move into?

5. Is a larger (or smaller) business, and if so, will that make a difference in who controls the relationship?

6. Has the right type of experience?

7. Is enjoyable to work with — what is their “corporate culture” like?

8. Has clear goals to collaborate with you and your company? Are their goals compatible with yours?

Many small business owners don’t take time to pre-qualify their power partners . . . a significant reason why so many arrangements fail. But if you can answer “yes” to most of these questions, then you’re off to a great start.

Most small business owners have. But in their excitement, many overlook the fact that, in the process, they are creating something new. And just as human children need our protection, our “brain child” – or intellectual property – also needs our protection.

Unfortunately, entrepreneurs often don’t realize — before it’s too late — that when working on new partnerships and ventures:

a. They had intellectual property that could have been protected; and

b. What steps they could have taken to protect it.

A Tale of Two Friends with an Idea

Let me share an example of how this scenario often plays out.

Sarah, a former school psychologist was having coffee with her fiend Fiona, the owner of First Financial, Inc., a company that provides books on financial education and financial management for adults. Sarah was complaining to Fiona that more and more, she was having difficulty conveying information to the kids in a way that “resonated” with them.

Fiona interjected, “Have you thought about including ‘how to get the “bling” and other things you want out of life’ in your workshops?”  “Maybe adding a “Show me the money!” component would keep their interest,” she added.

Given Fiona’s background in showing adults how to overcome resistance to learning about money, she was eager to help Sarah do the same for children. And Sarah, who had experience dealing with children, was very happy to have Fiona’s assistance and knowledge pertaining to money issues.

When Collaboration Turns into Uncertainty in Business

Over the next couple of months, Sarah and Fiona met regularly to develop their idea. Ultimately, they created a plan for an interactive workshop and board game, called “Hard Knocks.”

However, their collaboration hit a roadblock when Sarah mentioned she wanted to use “Hard Knocks” for her own project with at-risk adults, after being approached by a non-profit. At that point, Fiona realized that “Hard Knocks” – if used by the general adult population – might steal her company’s thunder . . . and profits. So, Fiona started to pull back from the project, which left Sarah wondering if Fiona still wanted to be a part of it.

How can these two friends untangle their web of uncertainty and move forward with their new business idea? Here are four things every entrepreneur should consider before collaborating on new projects:

1. Maintain open communication.

In an idealist self-preservationist world, Fiona would have thought through the ramifications of collaborating before she started freely sharing her wonderful ideas. But life is rarely ideal.

The solution: As Fiona’s first step, she should sit down with Sarah and explain her concerns. Working out a fair, written agreement concerning your intellectual property is always better belatedly, than never.

2. Consider what’s at stake.

Even if Fiona and Sarah never have a written agreement, copyright laws provide them with some measure of protection.

We live in a litigous society and there are many reasons your company could be sued. From asking unlawful pre-employment questions, termination errors and dishonest employee evaluations to uninformed medical request decisions, millions of civil lawsuits are filed every year in the United States.

Jim Cramer, the host of CNBC’s Mad Money and a co-founder and chairman of TheStreet.com, “regularly mentions that civil litigation in America costs the economy 2% of GNP (Gross National Product) each year. In other words, the sum of goods and services produced in America is reduced by 2% because of the economic confusion, distractions, delays, and dislocations caused by the American method of handling civil litigation,” according to LegalEthicsandReform.com.

“Two percent (2%) does not seem like much but consider that economists believe that one percent of GNP translates into about 1.2 million jobs. So it could be said that the American civil litigation system causes about 2.5 million people to be unemployed who would otherwise have jobs.”

So rather than lose sleep over these issues, you can take precautionary steps to protect your company; one of them is purchasing small business insurance. Since most entrepreneurs can’t self-fund attorney fees and possible awards resulting from a lawsuit or claim, it’s a worthwhile investment.

What options should you consider to protect your small business? Here are five coverage options every entrepreneur can benefit from:

1. Form a limited liability business entity for your company.

While not strictly a form of insurance, it can go a long way in shielding your personal assets (although not business assets) from creditors. Should your business encounter lawsuit abuse at least you won’t have to lose your home and personal finances in the fallout.

2. Commercial property insurance coverage.

Sure you and your employees may be very careful, but you cannot control the carelessness of others. Commonly experienced business losses including property damage and theft can significantly impact business operations. Should your business’s valuable assets be stolen, damaged or destroyed, with small business insurance coverage you can rest assured you will be adequately compensated.

For example, employee theft, known as “defalcation insurance,” should be a consideration for every small business owner with a large on-site staff. Other unforeseen hazards could impact your business location: such as flooding, earthquakes, tornado’s and hurricanes. Don’t forget to cover your business possessions as well as potential damage to the premises. If you are leasing corporate office space, chances are your landlord will have specified minimum coverage amounts in your lease.

Roberto Guerrero , Owner of San Francisco-based Cumaica Coffee shop is one of them. “It began when Roberto received a letter from a customer who claimed that certain features in Roberto’s store violated the Americans with Disabilities Act (ADA).”

“All were minor violations such as a recycling bin placed too close to a door and a pastry case located too close to a counter. Roberto did not realize his store was in violation of the ADA but quickly made the requested changes and notified the customer. The customer acknowledged that Roberto made the requested changes yet sued anyway and sought nearly $90,000 in damages,” according to the U.S. Chamber Institute for Legal Reform.

After a year of litigation, Guerrero wound up settling the case for $20,000. However, Roberto wasn’t the only small business owner targeted. At least 16 neighboring businesses were also sued by the same plaintiff. Two of them were forced to close.

Most small business owners, like Guerrero are unaware that they are courting potential disasters (legal action) that could cost them — their company and livelihood. In fact, if you think most business lawsuits effect Fortune 500 companies, think again.

Fifty-seven percent (57%) of lawsuits impact companies making less than $1 million in revenue and 1 in 3 small business owners are sued or threatened with a law suit.

Current trends and small business lawsuit facts may surprise you:

$100 billion: How much small businesses spend on legal action in the U.S. annually

25%: Number of harassment claims has risen since 2006

$404 Million: Price to settle discrimination related law suits each year

$104 Billion: Annual cost to settle tort liability

How to Protect your Business from Lawsuit Abuse

We live in a litigious society. “Any day you get served with a lawsuit is not a good day for your business. You cannot ignore the lawsuit without suffering a judgment against your business, and you know that defending the lawsuit will involve an uncertain amount of time and money.”

Lawsuit abuse hurts small businesses. Joe Ramirez, the CEO of Pacific National Security, knows this fact first-hand.

“[We] started the same way countless other small businesses got their beginnings: with a loan from a friend and a lot of hard work … After spending my own personal money, paying bills with credit cards and with no help from any banks, the entire company’s existence was threatened due to an abusive lawsuit,” said Ramirez.

“Although I had done nothing wrong, my business faced a class action lawsuit alleging violations of California’s incredibly strict employee regulations. Due to the extremely high cost of fighting the lawsuit, I was forced to settle with the plaintiff. It cost my business at minimum $40,000, which affected my financial capabilities and threatened the closure of the company altogether.”

Basically, IP covers an array of legal ownership claims that include copyrights, trademarks, patents, industrial design rights and trade secrets. Given that IP is broadly defined, there is substantial room for mistakes and oversights.

Protect all of your creations with these ten key steps.

Patent Protection: Protecting Products and Processes

1. Formalize ownership agreements amongst founders.

If your company is just getting off the ground and you’re about to look for some serious funding, hope for the best but get a clear agreement between everyone involved as to who owns what and how any dividends created by your intellectual property will be divided either when you grow larger or if the company just flat out implodes one day.

2. Patent filing is expensive, so spend strategically.

Keep any patent expenses to a minimum and focus them exclusively on strategic IP protection. For example, although you may want to enter international markets one day, first focus on domestic patent filings. Save the international filings for when you reach some of those markets or enough fame to have people overseas even know who you are.

3. Keep your mouth shut about your inventions and patent ideas.

Keep outward information flow to a minimum when it comes to your ideas and intellectual property. It’s understandable that you need to gauge investor interest, however keep to a basic policy of limiting information flow to only those who need to know. Truly sensitive ideas and core patentable plans should only be shown to people who have agreed to sign a non disclosure agreement (NDA).

4. Start with a provisional patent applications first.

Filing a provisional patent with the U.S Patent and Trademark Office (USPTO) is a nice stop gap before a formal application. Provisional applications allow you to create temporary IP protection with much less legal hassle and expense. Consult with legal professionals first before making a decision.