So, you’re ready to start your business venture. Great! Get off on the right track by following a few simple “DO’s and DON’Ts.” For example, you definitely do want to make sure you choose the proper legal structure for your business, but you don’t want to spend too much money on upscale office furnishings unless it’s absolutely important to your business.
- Do limit your liability to your investment in your company by incorporating your business or organizing it as a limited liability company.
- Do disclose everything to your attorney about your proposed business venture and past business experiences, both positive and negative.
- Do discuss with your attorney the advantages and disadvantages of the various forms of business entities.
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- Do discuss with your attorney the “corporate formalities” to which you must adhere in order to preserve the limited liability afforded to you by virtue of having incorporated your business.
- Do discuss with your attorney the need for a detailed written buy-sell agreement with your business partners.
- Do discuss with your attorney the need for a written employee handbook and written employment agreements containing confidentiality and noncompetition obligations if necessary.
- Do apply for a federal tax identification number for your business (necessary for almost all businesses).
- Do talk to a tax professional and budget for taxes.
- Do invest in technology.
- Do prepare a detailed written business plan.
- Do seek advice from organizations such as Small Business Development Centers and the Service Corps of Retired Executives (SCORE).
- Do join your local chamber of commerce, local civic organizations, trade groups, and entrepreneurs organizations.
- Do get to know your customers and suppliers.
- Do network.
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- Don’t make expensive office space and furnishings a high priority unless you are in an “image” business.
- Don’t print your stationary, business cards, and promotional materials until you have had a trademark attorney conduct a search of existing state and federal trademarks and pending trademark applications.
- Don’t ask or permit your employees to breach confidentiality or noncompetition agreements with their previous employers.
- Don’t spend money required to be set aside for employee and other withholding taxes.
- Don’t sign company contracts in your individual capacity. Rather, sign them on behalf of the company as an officer of the company.
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- Don’t put off buying insurance.
- Don’t give up 50 percent of your company to investors in your first fundraising effort.
- Don’t pass up opportunities for free publicity.
- Don’t try to do everything yourself. Setting up a business is complicated, and a business law attorney can assist you in making and implementing the right decisions.