New business owners assume risk. Nobody wants their startup to crash and burn before it takes off. You’re probably well aware of the fact that over 75 percent of new businesses fail within the first five years. Here are some common questions and answers that can get you pointed in the right direction:
How do I come up with a great name?
Choose your five favorite names. You can then search those names on the internet to see if they’re being used by somebody else. Make sure that you can use that name on a website, too. If you’re going to use a trademark, you can search that through the U.S. Patent and Trademark Office. Avoid the likelihood of confusion with another name, website or trademark. That’s a good way to get sued and get put out of business quickly. You don’t have to register your trademark to obtain state and federal protection. For starters, just put the TM symbol next to your mark. Register it when a little more money is available.
Do I need a formal business plan?
Yes, you’ll want a written business plan. It’s your blueprint and your guide to your goals. Since nobody knows your goods, services or objectives better than you, you’re the person who should write that plan. You’re also the person who might look to banks or investors for financing. They’ll want to see the plan, and you’ll want to be intimately familiar with it.
Do I need to incorporate?
It’s not really expensive to set up a corporation, and it’s highly recommended that you do so. If you’re merely a sole proprietorship, you’re going to be paying a self-employment tax on top of any other taxes. You’ll probably want an S corporation that’s formed in your own state. By incorporating, you’re drastically reducing or even eliminating the need to pay that tax. Incorporating can also protect you from personal liability if the company gets sued or even goes belly up. Your assets are protected.
Do I need an accountant?
You’ll probably want an accountant. You’ll learn quickly that you can get deluged in records. Your accountant can maintain some of those records for you. Some of the records you’ll want to maintain are:
- Employee records
- Financial statements
- Corporate and stock records
- Tax records and returns
- Accounts payable and receivable
Do I need an attorney?
You should probably have somebody lined up. You’ll be dealing with legal documents like:
- Suing or getting sued
These issues are beyond the expertise of the ordinary business person. You’ll want to be focused on what you do best. That’s your product or service. Many attorneys and law firms provide very reasonable retainer options for businesses in their start-up stage. Make sure he or she is a business lawyer, and not somebody that does divorce or criminal work.
Even if you think things out as much as possible, you’ll get blindsided from time to time. You’re just developing business experience, and you’re growing with your business.