- Business Form: In today’s market, businesses take on many different shapes and sizes. There are sole proprietorships, partnerships, corporations, Subchapter S Corporations (S Corporations), and Limited Liability Corporations (LLCs), to name a few. Why is the business form decision so important? Because, depending on your state, it will likely affect how much you pay in taxes, the amount of paperwork your business is required to prepare and file, the personal liability you face and your ability to borrow money. Notably, sole proprietorships remain the most popular business structure, which is likely due to the ease of their formation (you may not even realize you’ve created one!).
- Exit Strategy: It may seem like a strange proposition, but arguably just as important as considering how to get your business off the ground is considering how to get out or how to get others out. What’s your plan if you or one of your partners wants to withdraw from the venture? How much are you being paid to go or paying your partner to go? What other terms will apply to your or their buyout? What happens if one of you passes away unexpectedly? These are key issues to consider (and document) when starting a business to avoid confusion down the line.
- Employees: Whether you have one or one-thousand employees, make no mistake: employee issues will arise. The number of employees under your hire will determine whether you are subject to certain laws (such as those relating to age discrimination, for example), but regardless of the number of your employees there are several key provisions to include in your agreement to hire. The two most important are non-compete and non-disclosure agreements. It is your obligation as the employer to make the terms extremely clear as ambiguity in a contract is read against the party who drafted it. If you’re not sure what to say and/or how to say it, you should consider speaking to a business law attorney in your area!
- Dollars and Cents: It’s a beautiful thing to start seeing money come in, not always so beautiful seeing it go out. However, you have to be incredibly diligent in accounting for both. Bookkeeping is critical in managing finances, and a small mistake today could cost you big down the line if you don’t exercise caution. There is software and CPAs to help you manage your dollars and cents, and this is one area you definitely don't want to spare.
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