Chuck’s Chatter – A Blog for Business
PART ONE: SO YOU WANT TO START A BUSINESS?
Maybe you have the next great idea. Maybe you’re recently unemployed or simply unhappy with working for someone else. Maybe you just want the flexibility of being your own boss. Regardless of the reason, starting your own business is exciting, rewarding and, frankly, scary! Over the next several weeks, my blog will examine the myriad of questions, options, roadblocks and solutions that you will encounter on your quest to become personally, if not financially, independent.
The formation of a business or a company can range from a relatively simple process to an extremely complicated one, depending on several factors including size, scope, product, regulations, financing and structure. Regardless of complexities, you want to immediately engage the services of two people – an accountant and an attorney. Avoiding establishing a relationship with either professional at the beginning of the process is the quintessential example of being “penny wise but pound foolish”.
By consulting with an accountant, you can have answered for you such questions as the financial effects of your decision making. By consulting with an attorney, your business can be set up in a manner that protects your personal assets, guides you through any necessary regulatory processes, creates and/or reviews financing documents, advises on labor and employment issues and works with your accountant to set up the business structure that best meets your tax and other financial issues.
For instance, in next week’s blog, we will examine what type of entity you structure for your business. Should you be a sole proprietor (or general partnership) or should you organize as a corporation, an LLC, or a limited partnership? If you choose to be a general partnership, should you have a written agreement? What are the advantages and disadvantages of each business entity type?
We will also need to examine if you need trademark/copyright/patent protection. Is your idea truly unique or are you stepping on the intellectual property rights of another? If your idea is similar to another’s, are you still free to pursue your idea?
Do you have partners/collaborators? What will be their involvement and financial stake in the new business?
Will you be engaging in a business that requires governmental approval or licensing of some sort? Is your business subject to local, state or federal regulations?
Will you have employees and if so what regulations cover their employment? Will you be offering benefits and if so, which ones are regulated?
The list of details to be determined before you begin any business can be overwhelming and, without proper pre-planning and professional advice, you could find yourself with a great idea that you can’t use or, even worse, that costs you more than it is worth.
Hopefully, over the next several blogs, you will be educated as to the steps necessary to laying the foundations of a solid and successful business. During this time, I will give you real life examples of people who have made good and bad choices so that we can learn from their experiences. After over 20 years helping people just like you wend their ways through the exciting but mine-laden field that is known as business, I hope to help you attain the goals you have set for you and your business.
By spending a few dollars with a competent attorney before starting a business you can avoid spending a lot of dollars with an attorney afterward. As a wise man once said, “You can pay me now or you can pay me later. Later is much more expensive”.