You are thinking about starting a business. Great! Many people dream of the day when they will finally be their own boss, joining the 543,000 others who start a new business each month in the United States.
Starting a business can be extremely rewarding from the perspective of financial wellbeing and emotional fulfillment. However, even if you have the drive to succeed, a desirable product or service, and financial backing, legal issues could prevent your business from getting off the ground or cause it to fail before reaching its full potential. In fact, according to Bloomberg, eight out of 10 entrepreneurs who start a business fail within the first 18 months.
That's right. 80 percent of new businesses fail in less than two years. That is a staggering statistic, but we hope it will not discourage you from following your dream of starting and operating your own business. The good news is that there are steps you can take before launch that will greatly improve your odds of succeeding long past the 18 month marker.
Preparation. Preparation. Preparation.
From doing your research on the market you are entering and choosing the right location to ensuring you have a rock-solid business plan, the preparation you undertake before starting your business is critical. As the old adage goes, an ounce of prevention is worth a pound of cure.
Determine the right business entity for your needs
Can you personally afford to absorb any financial losses your business encounters? Do you have a family you want to protect from liability? Does your business venture include partners? Your answers to these questions will go a long way toward determining the legal structure you should choose for your business. Options include:
- Sole proprietorship
- Limited Liability Company (LLC)
When it comes to the formation of your business entity, a small investment of time and money with a proven lawyer can make all the difference in protecting your legal rights and financial wellbeing in the future.
Hire the right people
As your business expands, you are going to need at least an extra set of hands. The introduction of employees to the equation also introduces employment laws and tax laws into the equation. At this point, an experienced business law attorney can assist you in creating an employee handbook, making sure you are in compliance with employment laws, and helping you avoid the bad side of the IRS.
Never forget how you feel right now
Once an attorney has helped you dot your i's and cross your t's, that drive you feel in your heart will sustain you. Never forget why you decided to start your own business and never forget the exhilaration that comes with taking control of your life and pursuing your dreams.