Step 1: Work with legal counsel
Lawyers do more than argue and try to fix problems. In fact, a lawyer may be the most important resource a new business owner can rely on. Lawyers understand the legal requirements of starting a business and the best way to protect your assets and grow your revenue. Many attorneys, particularly lawyers with litigation experience, have seen just about everything that could go wrong for new business owners. They know the pitfalls and what to do to avoid them.
The business that you establish can be set up in many different ways. It is crucial that you find the entity that is right for your specific situation. Partnerships and corporations offer certain advantages and protections that must be evaluated to learn what is best for the future of your company. Selecting the wrong entity could end up costing you time and money in the long run.
Step 2: Start small, take incremental steps
Every business, whether large or small, is going to have very specific needs. For example, some business owners may need a formal business entity at the outset, but others may be alright operating for a few years as a sole proprietorship before organizing a formal business entity becomes necessary. Others will have to decide on an entity type before they even start offering their idea to the public. You need to make sure that you speak to an experienced lawyer to choose the right structure that fits your budget and allows for flexibility, growth, and the ability to pivot if the need arises.
Step 3: Identify your business assets and learn how to protect and profit from them
As a business owner, you will depend upon the income that you generate from selling your idea. Your idea or vision could be extremely valuable independently from the business itself. You need to talk to an intellectual property lawyer to determine the steps that you will need to take to ensure that you maximize the value you obtain from your business assets.
Step 4: Formalize your relationships
You may have started your business with friends or family members whom you trust a great deal. You cannot envision anything coming between you that would jeopardize the business that you all worked so hard to start. But, it is impossible to predict the future. If you fail to put it in writing, it could come down to your word against theirs when problems inevitably arise.
There is an easy way to prevent this from happen to you and your company. You and your partners need to take the appropriate steps to create documents that state what should happen when a dispute between owners develops. This does two very important things: It helps everyone understand the process that will be used to resolve disagreements, and it also helps you preserve your personal friendships.
An experienced attorney can work together with you and your partners to develop the right approach for your business. You will be able to discuss your concerns and needs before finding yourself caught in a no-win situation that puts everything that you worked so hard for at risk.