Advice for Starting a New Business

Advice for Starting a New Business

Starting a Business has many legal processes that any entrepreneur or individual starting a business will need to consider even prior to starting the new endeavor. The legal processes involved in starting a business can determine its success in the future. If an entrepreneur lacks the proper legal insight and documents then the business can be subjected to failure before the initial start of the business. If you intend to start a business you should definitely consult with an attorney or other business advisor professional to ensure that your business has a stable foundation for growth and development.

Make a Business Plan:

One of the first steps to developing a new operation is to create a plan which will outline for 3-5 years how you intend for the business to develop and grow. A business plan should include an executive summary, company description, market analysis, business management/structure, outline of products and product/ service lifecycle, marketing and sales, funding request, financial projections, and appendix. Writing this plan can be done by you; however, you will need to consult with an attorney and other financial professionals in order to help support your projections to obtain particular requests. Again it is important to obtain appropriate legal and accounting advice, assistance, and training. One of the most important steps is to hire either an attorney or financial advisor with business law experience. These professionals are able to assist in the starting the operations and establishing management, obtaining loans and grants, and contracting agreements and arrangements.

Business Location and Financing:

Even selecting a location for your operation may have legal components that may need to be taken into consideration. One must determine if the demographics of the area, competition in the area, and taxation range of the area will be appropriate for their business when choosing a location. It is important to talk to an attorney with business experience to determine if there are zoning regulations, hidden cost, taxes, and government economic incentives. Searching for a location may also require financing the business to obtain a business location. There are multiple ways to finance a business and an attorney or legal advisor can assist in determining which type of financial loan or borrowing program is right for your particular aims outlined in your business plan. Some financial options for small businesses include general small business loans, microloan programs, real estate and equipment loans / CDC / 504, or disaster loans.

Legal Structure / Taxes:

You will also need to determine the legal structure of your business as it will determine your federal and state tax obligations. An attorney or financial planner may assist you in determining which type of business entity you should pursue such as sole proprietorship, partnership, and or LLC. Your selection of type of business may in fact alter the IRS collection of federal and state taxes on your business or corporation. Once identifying which type of business structure you will be pursuing it is important to obtain a tax identification number and register for local and state taxes.

Registered Business Name:

You will also need to register your business under a particular name if operating under a name different then the owners name or an incorporation of the owners name and title. Business names other than just a simple name are also known as DBA’s or “Doing Business As” name and will need to be registered as a DBA. Registering a DBA is often done through the legal system, with the clerk of courts office, within the local government. The benefit of a DBA is that it allows the owners name to be the default name of the corporation and effectively ties the owner to the corporation, LLC or partnership. Business names can be difficult to develop and maintain. Attorneys may need to be consulted if a name appears too close in nature to another commercial opperation within close proximity as there may be a domain issue. Other name related issues and trademarks can also arise that require attorney revisions and other legal procedures to exercise business under a particular name. Once a name is obtained it then becomes possible for the business owners to obtain licenses and permits required to conduct financial transactions.

Understanding Employer Responsibilities:

Lastly, as an entrepreneur / professional it is important to conduct your business transactions and employer responsibilities in an appropriate manner. Failure to conduct appropriate employer responsibilities can lead to breaches in contract and other legal consequences that would require the hiring of legal counsel. Unaddressed legal issues can lead to the diminishing revenue, unexpected and unmanageable expenses and eventually a collapse and failure of the operation.

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