Starting your own business can be exhilarating. You have the opportunity to control your own destiny, determine who you work with, and have the chance to translate something you enjoy doing into financial rewards – all on your terms.
But before starting a business in California, you need to have a solid business plan and consider the associated legal issues, which include:
- Selecting the right business structure
- Acquiring the necessary licenses and permits
- Protecting the business name
- Putting together contracts for vendors, employees, etc.
Here are five tips that will improve your chances at establishing and growing a successful business.
Tip #1: Put together a simple but solid business plan
Many aspiring business owners never make it past this stage because they assume they’re supposed to create a detailed document with everything perfectly mapped out for the next five years. All a basic new business needs is a short plan that cover key issues like the following:
- What goods and/or services you offer
- How you will deliver them
- Your customer demographic
- Your marketing strategy
- Proposed pricing
- An action plan highlighting immediate focuses
Keep things simple at the beginning, because they will inevitably change once you get started.
Tip #2: Choose a business structure
By default, you are usually a sole proprietorship, but that can change later to a partnership, S-Corp, C-Corp, or LLC (limited liability company). Incorporating or forming an LLC provides an important level of legal protection.
Whatever you decide, you should go to the IRS website to get a tax ID number. You will need one once you start generating sales, hiring employees, and opening business bank accounts. Your business attorney can help you with this process!
When you choose the right structure for your business type and circumstances, your chances of succeeding are that much stronger.
Tip #3: Obtain all necessary permits and licenses
Unless you are going to run the business as a sole proprietorship or an LLC without employees, you will need a federal employment identification number. You also need to:
- Find out if any state licenses apply to your business type and obtain, if needed
- File for local permits such as a zoning variance
- Obtain a local tax registration certificate
Tip No. 4: Protect your business name and brand
Every business, no matter what size or how broad in scope, should take steps to protect their name and their brand. Pursuing a trademark is one way to do this. By definition, generally a trademark is a symbol, word, or series of words officially registered or established by use as representing a product or business. A business attorney can help you create a strategy to protect your brand and your company name.
Tip #5: Create contracts and agreements
When you’re in business, vendor and employee agreements need to be in writing. If your local coffee shop wants to buy its pastries from you, for example, you’ll need a contract that guards everyone’s interests and determines the expectations and obligations of both sides. If and when you hire employees, a professionally compiled employment contract can protect you from an expensive lawsuit, allowing you to keep channeling money into the business.
Questions or comments? Need more help getting your business off the ground? Contact us today to learn more!
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