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5 things you need to know before you start a new business

On Behalf of | Apr 9, 2021 | Business Law |

Starting a business requires that you know a lot about many different topics. There’s a reason that so many people go to school for a degree before they try to start a business or assume control over one.

However, you don’t need an MBA to run your own plumbing company. You just need to think about how to protect yourself before you take any major steps. The following list of five things are considerations that every individual who wants to start a business needs to learn and think about if they hope to succeed in business.

  1. You need a business form that fits your needs

Creating a formal business structure creates many layers of protection for you and the company. The nature of the business and who else you plan to involve and it will influence what kind of business structure will work best for your plans.

Whether you choose an LLC or a partnership, you will want to have everything documented. Additionally, if you are going into business with someone, you will want contracts between yourself and those other parties, especially if they will be your partner.

  1. There is likely insurance for whatever you plan to do

Before you open your facilities to the public or start performing services in clients’ homes, you want to protect yourself from liability. There are many forms of insurance that might benefit your business, from business interruption insurance to workers’ compensation policies. You need to look at all the places where you may have liability and then try to protect your company and yourself.

  1. Ensure that you understand the laws in your area of business

There are laws that regulate everything from the legality of picking up the feather dropped by a songbird to the word that you use on your product packaging. No matter how simple your business model seems on the surface, there are likely state or federal laws that could affect how you operate. Making sure you know what laws apply to your company will help ensure you don’t break them.

  1. Contracts are crucial to your success

You don’t want to do anything informally as a business entity. You want to have records and documentation of everything to protect yourself. From the first person you hire or the first client that hires you, you want to use written contracts for every agreement you enter into on behalf of your business. Contracts make expectations and requirements clear and also give you recourse if someone doesn’t follow through on their promises.

  1. Create a plan with your eyes on the future

Everything from your business plan to your contracts should be customized to suit your specific needs. You want to draft documents and create a framework that will support both your immediate needs of a startup and your long-term goals as a business.

Trying to navigate the process of starting a company on your own can be difficult, but support and careful planning can go a long way toward helping you achieve success.

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