Starting a Business
Starting a business always begins with an idea. But entrepreneurs must be savvy about devising business plans, securing small business loans, and making critical moves from the beginning. What business owners do in the early stages of a new business sets the tone for the future of their business.
FindLaw's extensive collection of start-up resources will help you set business goals and get the know-how you need to start your strategic plan for your new business. These resources will help you navigate which business structure to choose, devise a business plan, understand business law, comply with state and local regulations, and find other important materials to help you start your business.
Before making any decisions, make sure you speak to a business lawyer in your state about your small business plan and business structure.
Are You Ready To Start a Business?
The idea of being your own boss is an attractive one. Entrepreneurs typically go into a field that excites and inspires them. They get to create company culture, set their own pricing, and develop their roadmap for success.
But the reality of all of this is the genuine possibility of failure. More than two-thirds of startups fail. Having a great business idea or improvement on an existing business is not enough to succeed. It costs money to start a business, and finding lenders can be difficult. There are also substantial time commitments and legal liabilities that come with being your own boss.
Going into business for yourself can be extremely rewarding. But there are risks. Make sure you have a good understanding of what you're up against. Even the most successful businesses typically only have positive financial statements a few years into operation.
Choosing Your Business Structure
Before you can dive into startup costs and operation plans, you should carefully consider your legal structure. Sole proprietorships, partnerships, LLCs, corporations, and nonprofits are types of business structures you can choose from.
Sole proprietorships are the simplest business formation and allow owners to maintain a fair amount of freedom. But there are still several legal issues to consider.
- Checklist: Starting a Sole Proprietorship
- Sole Proprietorship vs. LLC
- Sole Proprietorship Advantages and Disadvantages
- What Are the Disadvantages of a Sole Proprietorship?
For many people, going into business with a partner provides security and peace of mind. Why go it alone when there's someone out there whose skills complement yours? But partnerships can present their own unique challenges. These articles can help you start your partnership on the right foot.
- Write a Partnership Agreement
- What Are the Disadvantages of Partnerships?
- 5 Clauses Every Partnership Agreement Should Include
Limited Liability Companies
Many small businesses organize as an LLC to protect themselves from liability and double taxation. Learn more about starting an LLC by viewing the articles below.
The word "corporation" is often associated with large businesses. But there are some situations where a small business would want to incorporate. Of course, there are pros and cons to forming a corporation.
Nonprofit organizations provide essential support to their communities. If you have an idea for a non-profit, the articles below can help you get started.
The Business Plan
Only some people who start a business write a business plan, but the most successful small businesses do. Before you start writing your business plan, you will want to consider what service or product your business provides and the need it serves. Figure out your potential customers and how you plan to reach them.
The business plan is your roadmap that defines your business and its goals. It consists of:
- Executive summary (your business snapshot) with a company description
- Mission statement
- Management team description
- Market analysis, market research, and marketing strategy for the first year
- Competitive analysis of similar companies or products if you have a new product
- Details on your target market or ideal customer
- Financial plan and financial projections for the first year. Knowing your costs, overhead, and planned profits will help you budget your financial resources
- Balance sheets
- Projected income statement
- Cash flow statements and cash flow analysis
- Short-term and long-term milestones for the new business
- Long-term plan for how you will reach profitability
A good business plan not only helps you stay on task but is required by most lenders and potential investors. You can write your business plan yourself or hire someone to write it.
For more details, visit Contents of a Written Business Plan.
The Marketing Plan
A marketing plan is different from your business plan, but it should be mentioned in your business plan. It lays out how you will reach customers and what advertising you will target. Your marketing plan is important at startup and as you expand as a business.
Small Business Financing
Financing your startup requires small business owners to understand the various options available. You may need different kinds of funding at different stages of growth. Before choosing a lender, entering into a leveraged buyout, or accepting money from private investors, consider the long-term implications of each source. For example, you may need to seek debt financing if you believe fast growth is required in order to get your business to where it needs to be. Inadequate funding can sink an otherwise promising startup before it has a chance to prove itself.
Too much funding, or the wrong kind, also can ruin a new business. For example, venture capitalists and angel investors may be able to infuse a large amount of capital at once. Still, they typically take a large piece of the company in exchange. If growth expectations are unrealistic, too much capital may set your business on the wrong path.
Learn more about these and other aspects of starting a business by clicking on a link below.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.