Top 7 Frequently Asked Questions About Starting a Business
Starting a business is usually an exciting time for entrepreneurs. The ability for people to work towards a dream or passion on their own accord is an attractive way to make money and raise a public profile. However, starting a business can be difficult and risky. Working on a business is usually highly stressful work that can produce little fruit until the entity takes off, and it can sometimes seem like hard work was for nothing if the venture ultimately fails. Working with a skilled business formations and planning lawyer can take a lot of stress out of the process.
Those looking to start a business usually reach out to mentors or industry leaders in order to discuss ideas or inquire about the strategies and advice other entrepreneurs relied on as they launched their business ventures. Some of the most frequently asked questions about starting a business include:
- What Should My Entity Choice Be? The type of structure a company is formed under can have significant ramifications once it is time to pay taxes, especially considering some of the changes under the new Tax Cuts and Jobs Act. LLCs are usually a popular choice but can be overly complicated for new people to set up, while a partnership can open up business owners to a host of liability problems.
- What about NDAs or Non-Competes? Business owners who believe they have a good idea are usually inclined to have those involved sign a non-disclosure agreement, or even a non-compete agreement depending on the industry. These types of agreements can lead to problems because they can sometimes scare off potential investors.
- Do I Need A Business Plan? Many businesses rely on a concrete plan to detail their goals for a product or service. However, too strict of a business plan can hinder a company if it want to innovate or deviate to pursue a different path.
- How Do I Get Money? Businesses need money to survive, and trying to find funding resources can be very difficult. The vast majority of businesses start out small, with expenses paid for through credit cards, personal funds, or money from friends and family. Angel investors, bank loans, and crowdfunding sites are other ways businesses can attract funding.
- What Kinds of Records Do I Need to Keep? Keeping detailed records of finances, taxes, stockholder minutes, and bank account information can make life much easier for tax reporting and general operational tracking.
- How Should Equity Be Distributed? Business owners should work out questions about equity among themselves, and with any other co-founders, in order to prevent problems down the road if someone wants to cash out with their share.
- What Are Some of the Biggest Mistakes Business Owners Make? Many of the same business mistakes echo across different industries. More common mistakes include not starting with enough money, underestimating marketing, and a failure to adapt to changing markets.
An experienced business lawyer will be able to answer questions about starting a business and be able to advise owners about local laws and tax regulations that can help save time and money. Schedule a consult with a business lawyer at Willcox, Buyck & Williams, P.A. today to discuss the business options that are most advantageous for your company.