The decision to start a business often begins with an idea for a great product or service, but there are many important issues that should be addressed before launching the business. Funding should be one of the primary concerns of entrepreneurs prior to establishing a business. To determine the necessary level of start-up capital, business owners should assume that the business will not generate any revenue for the better part of the first year and should set aside enough money to cover expenses during this time period.
Obtaining venture or angel financing is a goal for many new businesses, but it can be very difficult to obtain outside investor financing. To improve the chances of obtaining outside investors, business owners should have a business plan and should be prepared to give up a certain ownership percentage of their company to the investors. Roadblocks, such as making investors sign a non-disclosure agreement, should also be avoided.
As a general rule, incorporating in the state in which the business operates is the easiest and least costly option. For more complicated businesses, an alternate structure or state of incorporation may be advised. The company’s name should be unique, easy to spell and with a domain name that is unused or available for purchase. The business owner may conduct patent, trademark, trade name and copyright searches to ensure that the business’ name and products do not infringe on the rights of another business.
Starting a business is about more than having a great idea. There are many issues facing new businesses that should be carefully considered. Consulting with a business attorney may be a great way to anticipate and solve problems and issues before they negatively impact a business. Failure to carefully plan and consult with professionals may make it more difficult for a new business to succeed.
Source: FOX Business, “ 25 Frequently Asked Questions on Starting a Business“, Richard Harroch, September 05, 2013