What type of company should I establish?
The four most common types of business enterprises are a Sole Proprietor, Limited Liability Company (LLC), C Corporation and S Corporation. It is very important to research each type of entity for the state that your company will operate in, as there are pros and cons to each type such as what your state would require in having corporate document paperwork filing, liability to owners individually and ability to raise any needed capital. The tax laws are also important to understand which company best fits your business model. Some business types have income and expenses that flow to the owner’s personal tax return and some have completely separate filing required.
What should the name of my company be?
Ensure that whatever name you decide upon, you search at a minimum, your state database to ensure that the name is not already being used. Be careful when choosing a name that could be mistaken as another entity protected by copyright laws. In the event of a bad business decision made by a similarly named entity, it could have negative ramifications to your company’s reputation and cause unnecessary cost if legal issues arise when you would have to defend yourself to prove your innocence of wrongdoing.
Do you have a business plan?
When starting a new company, you want to ensure that you have a roadmap for even the smallest or earliest-stage idea. It can foster alignment, set the tone for the business and even help you craft your brand messaging. The business plan will help with expense projections, revenue forecasts and keep a small business committed to its long-term goals. If financing is needed to move your company forward, without at least two years of operating history to look back upon, a bank or other funding organization will want to see the commitment by research completed to ensure success in the future.
Who will help guide me to reach my goals?
It is very important to meet with and interview at a minimum; an attorney, an accountant, a banking/financial expert and a mentor who has worked in your field of business. These partners should all know about each other and their experience so that when you reach a new goal or point in your business plan, you know who can provide you with guidance and lead you toward the next step. In the very beginning, the attorney and accountant are the most important to help you establish the type of company and financial tax basis and reporting best for your operations.
