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Key Steps When Starting A Business

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The Importance of Timeliness When Starting a Business

For the majority of entrepreneurs and new business owners, time is a precious commodity. Finding time – and managing an existing schedule – is a challenge. When launching a new business, however, it is critically important to follow a proper timeline. Failure to execute the new business start-up steps in the correct order can cost a fledgling enterprise much-needed funds. More importantly, waiting until the last minute to handle important tasks can seriously jeopardize a business’s likelihood of success.

By working with an experienced business attorney, a new business owner can stop worrying about the legal details and focus on running their business. The following are some of the initial steps that should not be left until the last minute:

Creating a Unique Business Name

There are several considerations that contribute to choosing a business name. For a variety of reasons, business owners must choose a name that is not too similar to an existing Arizona business name. The name should not infringe on an existing federal trademark. Ideally, it should also be available as an Internet domain.

Separating Personal and Business Accounts

Many first-time business owners make the mistake of relying on personal credit to launch a new business. Understandably, they do not always have access to business credit as a means of funding a new business. By pledging personal assets, however, they expose themselves to business creditors. A business attorney can help a new business owner find a solution that does not put the business owner’s personal credit and assets at risk.

Planning for Intellectual Property

Copyright and trademark law is complex. Business owners must ensure they do not violate other businesses’ work, while at the same time guaranteeing they protect their own efforts. This is where the help and knowledge of an experienced business attorney is invaluable.

Drafting Business Contracts

Many business owners are tempted to create their own contracts or rely on agreements they pull from the Internet. Although this may initially seem like a money-saving step, it can be a critical and costly mistake in the long run. Arizona courts construe ambiguous contracts against the drafting party. Harford v. National Life & Casualty Ins. Co. (1956), 81 Ariz. 43, 45, 299 P.2d 635, 637; see also, Sears Roebuck and Co. v. Avery (2004), 593 S.E.2d 424 (North Carolina applying Arizona law). Business owners who create confusing, misleading, or simply incomplete contracts just to save a little money could end up losing a significant amount of funds should a dispute later develop.

© 2014 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website has been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

Five Things To Consider When Starting a New Business

 

If you’ve recently launched a new business or you’ve been contemplating starting your own company for some time, chances are you’ve put a considerable amount of thought into how you plan to achieve your dreams of business ownership. Most entrepreneurs are driven, energetic people who devote considerable time and effort to strategy and planning.

Despite the best intentions, however, the majority of new business owners fall victim to the same mistakes when starting out. Although this is by no means an exhaustive new business checklist, it is a solid overview of some of the most common things people neglect when starting down the road to being their own boss.

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1. Business Structure Is Crucial

The way you structure your business is arguably the most important decision you will ever make as a business owner. The corporate structure of your business has far-reaching tax and personal liability implications that can make or break a fledgling business. Unless you plan on operating as a sole proprietor, the options generally come down to organizing as a limited liability company or as a corporation. Both entities involve complex legal analyses that require the in-depth knowledge of a business attorney who understands the pros and cons of each structure and how each could support your business. In summary, corporate structuring is not a decision to be made on a whim.

2. A Credit Line or Alternate Cash Flow

Cash flow is the lifeblood of business. Even a small start-up operating from a basement office has overhead costs. Late-paying customers or a series of unexpected expenses, may cause a drought in your cash flow. Having a backup funding source, such as a business line of credit, is crucial to keeping business finances afloat while waiting for income to begin flowing back in.

3. Profitability Takes Time

Most business experts recommend saving at least one year’s salary before launching a new business. Other advisers suggest saving for a minimum of two years before going out on your own. You shouldn’t rely on turning a profit right away. With money in reserve, you can focus on building your new business for the long term rather than worrying about how you will pay your everyday living expenses.

4. Employer Regulations

Hiring an employee is a monumental step that goes well beyond shaking a candidate’s hand over a resume. Employers must comply with the variety of federal and state regulations that govern everything from workers’ compensation insurance and income tax withholding to Social Security tax and OSHA regulations. Failure to observe the myriad of laws that govern the employer-employee relationship can result in severe (not to mention expensive) penalties for employers.

5. The Importance of Well-Drafted Legal Documents

Most business owners prepare for start-up costs. They have a plan for buying equipment, renting a location, and paying for advertising. Surprisingly, however, many new business owners cut corners and omit working with an attorney who can help them protect everything they are working so hard to build. When you’re starting your own business, that often includes personal assets as well as property owned by the business. From creating solid, operating agreements, personalized contracts and commercial lease agreements that anticipate contingencies to insulating your personal assets from the reach of business creditors, a business attorney will work one-on-one with you to reduce the long-term costs of doing business. Your operating budget may function on a shoestring, but your legal budget should be more robust. Your business will reap the benefits in the long run.

© 2014 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This information have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.