This brings to a close our series on starting a new business (see below for past links), To review, the following are steps that should be considered in all new businesses:
- Passion for your new idea. You should be able to describe the new idea and identify the market niche that meets some need or demand for consumers or businesses;
- Get a good name that can be readily found by an internet search. If possible, have some descriptive aspect to the product or service you will provide;
- Have a uniqueness to the name and search the internet to make sure that name is not already in use by an existing business. Also search your state to make sure the name is available;
- Purchase the domain name from Go Daddy or other domain name provider. If you are not on the internet, you are not in business;
- Strive to protect your intellectual property and register your trade name with the state, and obtain trademark and copy right protection from the U.S. Patent and Trademark Office;
- Contact a business attorney to help you choose the entity structure, whether it is an limited liability company or a corporation, and to protect you financially;
- Get an EIN from the Internal Revenue Service;
- File the necessary documents for the initial organization of your company with the state;
- Go to the internet and obtain a template for a business plan and complete that plan. Remember this is an organic document and as your ideas evolve, your business plan with also evolve;
- Check your potential competitors and get ideas from them. Focus your business where you have an opportunity to make money;
- Go as far as you can on your own and keep full control of the enterprise. You most likely will need expert advice and other resources to get your idea off of the ground;
- Contact a certified public account to set up your financial controls and necessary records so they’re in place from the beginning. Learn how to read financial statements;
- Open a business account with your bank or credit union, and limit signators on that bank account;
- Project your financial needs with a pro forma showing for your intended business operations.
- You will always need financing and capital. Do not give away control of your business. If pressed, start out by allocating 5% for key partners/employees—but not exceeding 20%–so that you retain 80% of the control;
- Contact an insurance broker and obtain general liability and product liability insurance at a minimum and probably others as well;
- Hire prospective employees and consider non-compete and non-disclosure agreements. Don’t fall in love with an employee unless you see some passion and performance on his or her part. Have an “at will” form for all employees to sign;
- Do reference checks on all employees, and consider background checks for key personnel;
- If you need an outside office, consider short term leases with options to renew. Be careful about signing personal guarantees. If a personal guarantee is demanded by the landlord and this is the ideal space, be sure to limit the guarantee in time, i.e. six months or a year, and amount, i.e .a maximum dollar amount;
- Register your entity for any business occupational licenses required, including possibly a transaction privilege tax application with the Arizona Department of Revenue;
- Have a professionally designed website;
- Get a search engine optimization provider to get you to the first page for searches with your specific key words;
- Kick off your business with a big splash;.
- Provide a quality product or service. If you want repeat customers or a good reputation, maintain good quality control; and
- Implement your envisioned marketing plan.
Good luck. All successful businesses depend upon passion, good luck and timing, but mostly on good luck and timing.
Lat J. Celmins
Disclaimer: This blog is for information purposes only. Legal advice is provided only through a formal, written attorney/client agreement.
Links to previous blog and original article: