6 questions to ask before you start your own business
SPONSORED — When the daily grind feels a little, well, like work, you might fantasize about owning a company. As an entrepreneur, you have the freedom to do what you love — as a job. But starting a business isn’t just about turning your favorite hobby into a thriving money-maker; it takes some hard work, dedication and a bit of bravery. Before you start your business, you need to ask yourself the tough questions.
Am I ready?
Unhappy at work? Itching for the freedom of becoming your boss? Starting a business is a big, serious commitment. Before you take the plunge, you want to make sure you’re doing what’s best for you. Even if you’re ready to work for yourself, you’ll want to assess your financial situation as well. According to Intuit, 64 percent of entrepreneurs started their business on less than $10,000. While that might not seem like much, you’ll want to keep in mind that it could be a while before you see profits start rolling in.
Do I have a new idea or product?
Chances are, something inspired your desire to start a business. That could have been an idea for a new product, service or a completely new business model. If you’ve got something proprietary – like an invention or an idea for the perfect name or logo, you’ll want to protect it. Contact an attorney quickly to ensure you’ve got your nondisclosure, intellectual property and contribution agreements in place. You’ll also want to talk about filing patents, copyrights, trademarks and domain registration for anything proprietary.
How do I set it up?
You might have all the ideas and drive you need for your new business, but creating the actual business entity is a legal matter. You’ll need to decide which structure (LLC, S corp, C corp, sole proprietorship, partnership, etc.), is most appropriate and advantageous. An attorney experienced with entrepreneurs and startups can explain all the details and help you become a legitimate business. This also includes drafting governing documents, like articles of incorporation, bylaws, shareholder agreements and partnership agreements.
Where’s the money?
You already assessed your wealth before deciding to quit your job. Now it’s time to determine how best to fund your burgeoning business. Forbes suggests some time-honored ways of funding new businesses, including personal savings, family and friends, new investors and small business loans. Additionally, you might look into more out-of-the-box methods, like crowdfunding. If you have investors or partnerships down the line, you’ll want to make sure your attorney helps you execute the appropriate paperwork to protect your new business.
Who’s on my team?
Working for yourself is one thing, but managing employees is another. If you’ll be hiring help, you’ll want to make sure you’re following all applicable employment laws. You’ll need to consider pay structure, incentive structures, whether you’ll hire employees or contractors, and whether your startup requires or could benefit from a board of directors and advisors.
Where do we go from here?
Maybe you’re happy with your small, successful business. If you’re dreaming big, you’ll have to take some grand steps — and risks — to launch your startup to the next level. This is likely going to require extended funding, from either business loans or increasing company shares. When it’s time to expand, you’ll need to consider franchising, real estate considerations for additional sites, employment issues for a growing staff, possible mergers or acquisitions and myriad other situations. Because of this, you’ll want a great business attorney on your side, ready to answer questions and give you direction when you need it.
And be sure to hear KIRO Radio’s Dave Ross talking with Ryan Swanson’s Brenton Twitchell about starting a new business here