Starting a new business is exciting, but it’s easy to get caught up in the excitement and fail to properly execute an action plan. There might be issues that you don’t think are overly important in the beginning, but can mean the difference between future success and failure. With some simple planning now, you can help avoid future legal and financial headaches.
Structure YOUR Business
Failing to choose the right business structure for your needs is one of the most commonly made mistakes. Business structures include the corporation, the limited liability company, a partnership, or a sole proprietorship. Whether you are operating by yourself or with partners, it is important to understand the risk of liability for everyone involved with any business structure you might choose. Your friend might be encouraging you to start an LLC because it seems like the popular route, but you need to make sure that it makes sense for YOU and YOUR business. Each business structure comes with its pros and cons. Take the time to understand the commitment that must be made for each type.
Get it in Writing
Even if you decide to form a general partnership with a friend or family member, a handshake is never enough! It is always best to have something in writing. You might both be excited and getting along just fine in the beginning, but one never knows what can happen in the future. Consider the following questions…
- What should happen if one partner wants to sell their interest?
- What happens if one of the partners dies?
These questions are much easier answered now rather than after they become overcomplicated in the future.
Have a Plan
It’s important to understand the market for your product or the type of service you’re selling. Even if you are not trying to entice investors for your company, you should have a business or marketing plan prepared from the start. The plan should serve as a checkpoint for you throughout the year, refer back to it to see where you have been meeting your financial goals and where you have not. These types of plans help you to set realistic financial goals by identifying what marketing challenges you may face for your business in your area. Preparing a business plan will force you to think about your business’ future in a more objective manner. You will be able to better project how much money you need now to get things going, and the income you can expect to, or hope to, make.
Call in the Pros
Bottom line is, if you don’t have years of experience practicing law and keeping books, you probably shouldn’t trust yourself with something so critical for your own business. Experts are considered experts for a reason.
About Oakstone Law, PL
Oakstone Law PL was founded by Bob Kleinknecht. A member of the Florida Family Trust Company Subcommittee, the Estate Tax & Trust Planning (ETTP) Committee and the Real Property, Probate & Trust Law (RPPTL) Section of the Florida Bar, Kleinknecht has 15 years’ experience.
Prior to founding Oakstone law, he spent more than eight years serving as a personal, in-house estate, tax and charitable planning attorney for a Forbes 400 family in New York and Florida. Before that he was an estate planning and estate settlement attorney with prominent firms in Boston and Washington, D.C. after beginning his career with a boutique firm in Naples, Florida.
Licensed in Florida and Massachusetts, Kleinknecht has developed a practice model that eliminates billing by the hour and offers a streamlined, customized client process supported by technology, security and a personal approach.