Starting your own business sounds simple, but there are a lot of traps and pitfalls that could doom your new start-up before it even gets off the ground. Starting a new business and being successful is extremely difficult. The odds are stacked against you from the start. Preparation BEFORE you go live and start “making money” is of the utmost importance.
Build a name for yourself
First, come up with a name that will get you noticed and in some way expresses the nature of your new business. Try to come up with a name that is unique, not commonplace and sets you apart from your prospective competition.
Another vital aspect is to protect yourself is by trademarking your name and/or design and to then put it on everything you do, from business cards, to invoices, to proposal sheets, and more. This is now you. This is your identity. How powerful is a trademark. Take Nike for example. What is their trademark? It is a glorified check mark, nothing more. But everyone knows the Nike swish. And no one else, but Nike, can use it.
Hire the proper team.
All successful businesses have an attorney and an accountant who have the expertise to assist them.
If you have partners, make sure that you have a partnership (shareholders) agreement in place from the very beginning. This will ensure they remain constructive members of your team. Make sure everyone knows their duties, obligations and responsibilities and are clear on how the new business entity will operate. For instance, WHO IS IN CHARGE? Do not leave anything to chance. A good attorney should draft an agreement that addresses as many potential issues and problems as possible. This can avoid confusion and future conflict. Clients sometimes ask to keep it short. Short agreements are usually shortsighted. Hopefully, you will put the signed agreement in a desk someplace and never see it again. But good lawyers help their clients, “work for the best, but plan for the worst.”
Come up with a good business plan.
Hire a good business accountant to put together a proforma balance sheet and income statement to present to banks and others to obtain credit. You must understand the documents and be able explain the numbers confidently when asked. Be educated so you can educate anyone you may want to assist you with your business.
DON’T SIGN anything without it being reviewed by your attorney. So many times people sign leases or rental agreements or other business agreements without understanding the ramifications of what they are signing because it is a pre-printed form or they are told it is a “standard” agreement. Nothing is standard and a pre-printed form can have a rider or an addendum, A “simple” lease is not so simple. A “standard” loan agreement is not so standard. The “usual” guarantee may not be so usual, or even required.
Remember, all successful businesses are built on a strong foundation. Make sure your foundation is strong by hiring the right professionals from the beginning and above all, preparing for your successful future.
“Starting Your Own Business? Begin With Preparation!” was written by Michael B. Schulman