There are precious few moments in one’s career more exciting than making the bold decision to start your own company. As you prepare to take the big leap toward being your own boss, you’ll want to make sure you take all the time you need for planning in order to lay the groundwork for success. As rewarding as launching a business can be, there are numerous potential pitfalls lining the golden path toward growth and profit. You can help yourself tame the complexities of starting up by taking stock of some do’s and don’ts.
- Consider incorporating or organizing your enterprise as a limited liability company to control your personal liability exposure.
- Strongly consider securing the services of an attorney with business law experience to help you navigate the startup process.
- Be completely honest and open with your attorney. Disclose all the details of your business proposal and any prior experience in business, whether good or bad.
- Carefully consult with your attorney or another business expert concerning the advantages and disadvantages involved in the different legal ways to organize your business (e.g., corporation, LLC and partnership).
- Ask your attorney to thoroughly explain the corporate formalities you will be required to follow in order to preserve the liability limitations you would enjoy if you choose to incorporate your company.
- Talk to your attorney about the need for comprehensive, written buy-sell agreements with potential business partners.
- Discuss with your lawyer the possible need for detailed, written employment agreements containing non-compete and confidentiality clauses.
- Consult your attorney on the potential need for an employee handbook.
- Apply for a federal tax identification number as soon as possible. This is a requirement for most businesses.
- Consult a tax professional to understand your tax obligations and schedules and to develop a tax budget.
- Research and invest in current technologies to promote efficiency and productivity in your enterprise.
- Develop and write a detailed business plan including realistic projections of expenditures, revenues and growth over various time periods.
- Contact organizations such as the Service Corps of Retired Executives and Small Business Development Centers for advice on starting and growing your company.
- Join and become active in your local chamber of commerce, civic organizations, entrepreneurial organizations and trade groups.
- Consult with a trademark attorney and have extensive searches conducted into federal and state trademarks (both existing and pending) before printing any business cards, stationery or promotional materials.
- Create bonds of trust by developing relationships with suppliers and customers beyond simple business transactions.
- Foster and utilize personal and professional networks.
- Waste money on costly offices and furnishings unless your business is in an image-focused industry.
- Request or allow employees to breach non-compete or confidentiality agreements they may have with prior employers.
- Touch money that is required to be preserved separately for employee withholding and other tax obligations.
- Sign any contracts in your capacity as an individual. All contracts should be signed on behalf of your company as a company officer.
- Procrastinate when it comes to the important step of securing insurance for your business.
- Trade away large percentages of your enterprise to investors in an effort to secure funding.
- Miss out on opportunities to take advantage of free publicity.
There is a lot to consider and accomplish when starting a business, which inspires the last “don’t.”
Don’t Be Afraid to Seek Help
Beginning a business venture involves myriad laws, tax considerations and relationship management. It is important, particularly for first-timers, to recognize that going in completely alone may not serve your interests. While it isn’t impossible to be successful without consulting professionals such as business attorneys and corporate tax experts, relying on their experience and specialized knowledge could help make the startup process much smoother and help bring the rewards of business ownership closer.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.