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Planning particularly important for technology companies

On Behalf of | May 2, 2016 | Business Formation & Planning |

North Carolina residents who are thinking of starting their own businesses are sometimes deterred by the high failure rate among new commercial ventures. However, research conducted more than a decade ago by Bloomberg may give entrepreneurs who plan diligently reason to be cautiously optimistic. Bloomberg concluded that most new businesses do fail within five years, but researchers also found that business owners who regularly revisited and updated their business plans were still going strong after three years 85 percent of the time.

Comprehensive planning is particularly important for entrepreneurs who are thinking of entering the lucrative but unpredictable technology sector. One of the major pitfalls that they fall into is spending the majority of their time developing their device or application while devoting little effort toward finding customers. However, too much planning may actually hurt business owners in a field where the hot product of today can quickly become stale and unwanted as even more innovative solutions are introduced.

Many fledgling technology companies wind up being purchased by sector giants like Microsoft, Google and Apple, and entrepreneurs entering this field may be wise to study the long-term plans of these major companies. Learning what vast research and development budgets have taught Fortune 500 companies could also be invaluable to business owners who would never dream of selling their companies.

While thoughts of launching an IPO or being acquired by an industry giant may be the stuff of entrepreneur dreams, most business owners are faced with more pressing and less exotic concerns. Choosing the appropriate business entity is one of the most important decisions an entrepreneur is faced with, and attorneys with business law experience may provide assistance by pointing out the taxation and liability ramifications of forming a corporation or a limited liability company.