Every year, over 100 million startups are launched with nearly 50 billion dollars invested. Unfortunately, nearly 90 percent of these businesses end up failing, many within the first year. While starting a company can be rather easy, giving it a solid foundation takes a lot of forethought and preparation. Here are the basics of creating a start-up that has the makings of a success story.
Create a Business Plan
The foundation of any company is to have a solid business plan written. Outline the need you hope to fill, how you plan to fill it, exactly what your services or goods will be, who the customers are, and why they will want or need your product. Paint a clear picture of who you deem to be your competition and what sets you apart from them. Create a framework for your financing, operating costs, and expected income. You should have a complete structure formed of how you plan to run your business. This includes the manner in which you will market your brand, the advertising dollars you have allotted, how the company will be managed, and a description of any insurances that you may need. Your business plan shows your company’s legal structure and is basically a map with which you will navigate every aspect. If you are seeking investors, the strength of your plan will often be the make-or-break factor in whether they consider your company to be a worthwhile gamble.
Consult With an Accountant
Consult with an accountant about what legal structure would best suit your particular type and size of business endeavor. He or she can guide you on the benefits and drawbacks of registering as an LLC, sole proprietorship, corporation, S corporation, cooperative, or partnership.
A professional accountant is well equipped to handle the complex nature of business-related tax issues and can inform you of how to organize your finances from day one so you are not faced with any surprises come tax time. Obtain your tax identification number based on the legal status you choose and register for state and federal taxes.
Choose a Location
If you are opening a brick-and-mortar location, choose a spot that will not only be easy to find, but also will offer adequate parking and safety for customers. Take note of any zoning laws that apply to the location you are considering. While you may seek a place you can grow, do not go overboard on size, which can result in a higher lease, increased heat and air conditioning bills, and other costs that add unnecessary burdens during the early stages of starting up.
Register the Name
Once you have established your business name, register it with the local and state databases to secure it for your own use. If you fail to register, and a competing company chooses to utilize the name for their own purposes within the same industry, you can find yourself with muddled legal issues, which can be costly and time consuming. It can also cause confusion with your customers, leading to a substantial loss of profits. Pick up any online domain names that are similar to the one you registered.
Obtain Proper Licenses and Permits
Find out which licenses and permits you are required to have for your type of business and apply for them early on. Allow adequate time for approval prior to opening. Know the costs of each application and fee upfront and have them budgeted into your business plan.
Do not let your excitement of creating a start-up keep you from giving the preparation stage its due diligence. Take the time to fully research the industry in which you hope to land and arm yourself with all the knowledge and groundwork necessary to give you and your start-up the best chance of success.
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.