Start Up Companies

Five items to focus on when starting a new business:

Business plan

Outline who will own the business and what the legal form will be, your qualifications to run the business, the competitive market you face, the products or services you will sell, and how you intend to advertise to prospective customers. How much cash will you need to start up and where will those funds come from?

Legal form

You can incorporate, or operate as an LLC, a partnership, or a sole proprietorship. Consider both tax and non-tax reasons for selecting a given entity.

Location

If your business will consist only of online sales, your world headquarters can be wherever you are. However, if your business needs foot traffic to thrive, you’ll need to research rents and other costs such as utilities, as well as zoning and traffic restrictions.

Taxes

You’ll have to work with the IRS, state tax agencies, and local governments to obtain permits and occupational licenses.

Advisors

Create a business financial team that includes a banker, an insurance agent, an attorney, and an accountant. Involve your advisors early and frequently.

Need more suggestions for getting your business off to a good start? Contact us at consulting@reynoldsrowella.com. We’re here to help.

Staffing errors can spell disaster for your start-up.Here are three to watch for.

1. Staffing the firm with friends and family. While this strategy may work in some circumstances, hiring pals and relatives often spells trouble. For one thing, friends and family members often expect – even subconsciously – to be treated differently from other employees. A double standard, whether real or perceived, can hurt morale and productivity. As a general rule, focus hiring decisions solely on the needs of your firm and applicant qualifications.

2. Trusting in a handshake. Spell out employee arrangements in writing. This can be as simple as drafting employee offer letters that cover compensation, rights to intellectual property, and bonus arrangements. Employee handbooks are also a good way to spell out the responsibilities of your firm and staff.

3. Bringing in a partner for the wrong reasons. Downside risks of bringing in a partner include surrendering a portion of your company and control over important management decisions to someone else. Before selling part of your company, ask yourself what the partner will contribute besides money. Can you find other ways to fill gaps in your team? Choosing wisely can help you avoid ending up in the business equivalent of divorce court.

Are you starting a new business this year? Put these items on your to-do list.