The definition of a small business can depend on many factors, but is generally accepted as a business that is privately owned and operated with employees under 500. The type of industry, along with some government programs which offer small business financing, can also have their own definitions.
Starting a small business is becoming increasingly popular because it gives owners creative flexibility, control over their work and life balance, and financial independence. In addition, there are incentives for starting a small business, including financing options and tax deductions.
You feel ready to start your own small business because you believe you have an interesting idea the public will really embrace or perhaps you just want to be your own boss. Whatever your reasons for starting your own business, there are some tried-and-true things to keep in mind before you make the plunge.
Some items to keep in mind when starting your small business include:
- Research: With everything new in life that you want to undertake, you have to do your due diligence. Whether that’s looking into your competition, ways to finance your small business or whether you want to partner with someone, start off on the right note by doing your research top-to-bottom.
- Formation: Whether you decide to go it alone or with a partner, look at what forms small businesses like yours have taken. The state in which you wish to form can also influence your decision, along with whether there are tax incentives for taking a particular form. Popular small business forms include corporations, partnerships and sole proprietorships.
- Teams: Most small business owners will tell you that starting your small business can have you burning the midnight oil every night. If you know you will need help getting things started, identify your team early. Truly understand how much time you and your team will need to devote to the business and what the level of commitment you will need to make for it really grow.
- Marketing: Make sure your business plan includes a good marketing strategy. Even if you don’t consider yourself a rainmaker, you will have to wear that hat to make sure people know about your business. As well, make sure your marketing plan includes some sound principles for picking the right name for your business.
- Licenses, Permits, and Registrations: Most businesses require licenses, permits or registrations before you can begin operating your business. Check with your jurisdiction to determine what you need to do to open for business.
According to the Office of Advocacy, United States Small Business Administration, there are more than thirty-million small businesses operating in the United States. There are myriad methods of financing that these owners have used to get their business started. These include obtaining commercial loans, partnering with investors, and applying for government programs for small businesses.
These government lending programs operate at the state and federal levels and reflect the importance of small businesses in strengthening the economy. These financing options promote the start of new businesses and help to grow existing small businesses.
A business lawyer helps people who are looking to start their own business or who have disputes concerning existing businesses. There are business lawyers who specialize in helping new business startups, whether you are looking to develop, finance or sell your startup business.
People differ on how they define startups. Startups are often new technology companies (though not always) that can burn out quickly or be wildly successful. But, startup is also used to describe any company that is just starting out.
Compared with more established businesses, startups frequently have different challenges. For example, they may not rely on traditional commercial loans for financing, but may seek capital from “angel investors” or venture capital firms.
However you describe your new business, you can benefit from talking to a legal expert in your jurisdiction to understand all the federal, state and local laws and regulations that could impact your business.
Your legal expert can help you identify tax breaks, special financing for your type of business, how to apply for a tax identification number, how to structure your business to reduce your legal liabilities and how to protect your intellectual property.
You have made the personal, complex and highly stressful decision to start your own business and be your own boss. But, your research and due diligence shouldn’t end there. Before you hang out your shingle, consult with a local business lawyer who works with startups to help you identify any legal issues that can increase your liabilities.
In addition, the lawyer can help you with your business format, protect your proprietary interests, and protect your other legal interests so you can focus on running the business.