Starting your own business doesn’t happen overnight. There are several pieces of the puzzle to connect before you have the legal backing of a proper business entity. If you’re new to the business world, the steps to success can be somewhat discombobulating.
Take some time now to begin learning a few important tips to running a business. Check out a brief overview of a some of the most vital things you should know before you start a business.
Know how to legally structure your business
When it comes to the legal formation of your business, you’ll need to consider the path you wish to take with your new entity. There are five different types of business structures, and it would behoove you to study them all before deciding which to utilize.
- Sole Proprietorship – Best when there is only one owner. Less legal paperwork and more relaxed stipulations.
- Limited Liability Company – Also for sole ownership. Protects owners against any legal consequences, unless there is intentional wrongdoing.
- Partnership – When there are two or more owners, a Partnership is formed. Taxes for the organization are filed by owners personal tax claims each year.
- C Corporation – Most big-named companies are C Corps. C Corps are their own entity, and they go on after the death of the original founder.
- S Corporation – S Corporations are also their own legal entity. When there are less than 100 shareholders, an S Corporation is best.
Decide if you need to hire a Registered Agent
There’s a professional to handle all of the legal paperwork and filing for the state, and that is where your Registered Agent comes in to do work. A Registered Agent is especially beneficial for larger business entities.
It isn’t a well-known fact that your business may be required by state law to retain the services of a Registered Agent, so make sure to do the proper research. Stay “in the know” regarding your business from day one.
Keep insanely detailed records of everything
Every aspect of your organization will come under some scrupulous eye at some time in the life of your business. It is vital that you records prove that everything is in order and done by the book.
When it comes to finances, it is especially crucial that your records are detailed and easy to access. Use the perks of technology for this step and for future storage needs. There’s no need to have a hoard of filing cabinets.
Never underestimate the power of a business plan
Building a solid business plan prior to launch is particularly helpful in avoiding catastrophe. Though your plans may never go exactly as you had hoped, it is best to create a starting point.