If you are ready to take the big step toward starting your own business, you will have a lot on your plate. You not only need to think about delivering the best products or services that you can, but you also need to consider the legal implications of this major life change.
In this quick guide, we outline some need-to-know issues that you may need to address before you get started. Not every business will need to address each of these, but you should at least consider whether each of these aspects applies to you. Then, when you are ready, contact an experienced Springfield, Missouri attorney to help you take the next steps in the process.
1. Financing the Business
Getting funds to start your company can be tricky. For some companies, the startup investment is minimal, and they can fund the venture themselves. Others may need to consider pulling in third parties to invest or become part owners. You may also be able to get a business loan from your lending institution as well.
Thinking about what you need to not only start the company but also sustain cash flow as you get your feet on the ground is extremely important. The ongoing funds you need to be sustainable is one of the most underestimated items for new business owners.
2. Setting Up a Business Plan
Some new business owners skip this step because they think that it is unnecessary and cumbersome. While it certainly takes some time to develop, having a business plan will help get your company started on the right foot. Creating this plan forces you to think about your target market, long-term planning, expenses, pricing, and a lot more.
Many lenders will require that you have a business plan to get funding, and investors want some kind of evidence that you know what you are doing before they invest. A business plan can provide that type of reassurance.
3. Choosing the Best Business Entity
Many small businesses start as sole proprietorships. However, that does not mean that they should stay that way. There are many legal benefits to choosing a different structure, depending on your type of business and financial needs. You should review the pros and cons with your attorney and determine which option will work best for you.
A Limited Liability Company (LLC) is a very popular choice, but is not a one-size-fits-all solution. Additionally, creating an LLC is more involved than it may seem, requiring not only the initial filing(s) with the Secretary of State, but also requiring an operating agreement, as well as often needing first meeting minutes, share or unit certificates, tax identification numbers, Transfer On Death (TOD) designations, as well as many other items. It is best to consult with an attorney when making these decisions, and many clients hire an attorney to create many or all of the above documents.
4. Naming the Business
Picking out a catchy or fun name can be a challenge. As you go through that process, you should also note that your business name needs to meet precise legal specifications, as well. For example, you may not be able to have the same name as another business in Missouri; and if you do, it can create special legal problems that you really should understand, prior to investing in your business cards, letterhead, website, and promotional items. If you plan to operate in other states, you will have all the same issues operating in that state, also, so it is important to have a keen understanding of what is at stake and the issues involved.
There are databases that you can search to determine whether a name is taken or reserved by someone else. It can be a time-consuming process, but having your attorney do these types of searches before you start your company can save significant time, expenses, and headache down the road.
5. Business Licensing by Federal, State, County, Municipal, or Industry
Not every business will need a license to operate, but many do. Licensing requirements are tricky because they work at several levels. You may need, for example, local licensing in addition to federal licenses. What your company does will dictate what you need in this arena. For example, a company that provides food service has very different legal requirements compared to a business that offers paper shredding services.
6. Addressing Permits and Zoning Matters
If you are planning to have a physical location for your business, you will likely need to deal with permitting and zoning issues. Even your signage must meet specific qualifications in Springfield.
Many commercial buildings cannot be placed or operate in residential areas, for example. In some situations, you cannot run your business out of your home, depending on the regulations in your local area or even your HOA restrictions. Again, doing some investigation ahead of time to address this can be extremely helpful.
7. Hiring and Paying Employees
Hiring your first employees comes with an array of additional federal and state laws that apply, and in a post-COVID business environment, there are now even more laws than before that govern employee / employer relations. Additionally, making sure that you have taxes taken care of can be challenging. Before you post your job opening, talk to your attorney about what you will need for the hiring process and what you need to do to ensure you are meeting all of your requirements.
8. Securing Business Insurance
It is almost always a good idea to have some kind of business insurance. However, the type of business insurance that works best for one company may not work for your situation. Additionally, there are many different types of insurance to consider when owning or running a business, such as health insurance, life insurance, disability insurance, premises insurance, and errors and omissions or malpractice insurance, just to name a few. Evaluating your risks and talking to an insurance broker can go a long way.
9. Attracting and Retaining Customers
There are many things that businesses today must do in regards to customers. Most businesses will need to have a website, in order to attract customers, or legitimize the business if you already have other ways to attract customers. Many businesses will need engagement agreements or employment agreements when a customer is ready to hire the business. Additionally, most businesses today must solicit customer reviews, reply to customer reviews, or eventually deal with unhappy customers or negative customer reviews online.
An experienced business attorney can help you with all of the above, and so much more.If you are ready to talk about your next steps as a business owner, contact the Piatchek Law Firm by calling 417-882-5858. We can help your company get a good legal footing as it starts to grow.