You’ve made it so far, congratulations! You are ready to truly create your business but are not sure what steps to take, no worries! We’ve got your back. We are going to walk you through what questions to ask yourself and what items to prepare so that you can start your business without fear of failure.
The Road Ahead
The first thing to think about when taking the final steps in creating your business is internalizing the amount of work ahead of you. As you’ve made it this far, you are well aware there is a lot that goes into a startup, but have you really got the fire in you to commit fully to your big idea? The commitment and determination required to start your business will also exceed you and include those in your inner circle. Think about things like:
- Are your partner and family on board with your decision?
- Will you have genuine support from those that you care about?
- Do you have financial concerns or time constraints?
Maintaining your stamina when the going gets tough is difficult alone so ensuring that those around you are just as excited about your idea gives you a soft landing pad to fall back on when the challenges arise. Answering these questions will help you position yourself to avoid potential pitfalls in the future of your business.
Setting Up A Legal Entity
Once you’ve got your support group in place and are confident that you are ready to hit the ground running, setting up your company as a formal entity is your next step. Look into what it takes to set up an S-Corp or LLC and never start your business off as a sole proprietorship as it puts you and your assets at huge risk. You also need to talk to multiple attorneys about their fees and how to proceed to legal proceedings. Being legitimate and legally sound will not only keep you out of jail but save you so much time, energy and headaches in the long run.
Building Your Team
If you have multiple founders, or anyone outside yourself, starting the business alongside you, sit down and make a Plan B, and Plan C and Plan D while you are at it. How is your equity going to be split? What are your respective roles and responsibilities? What will your incomes look like and in what frequency? What happens if one of you wants to buy the other out? What does the ownership structure look like? At this stage, setting up a buy/sell agreement and having a procedure in place for any potential issues is a must. It is also important to note that answering these questions is important, but having the answers documented in writing will help navigate any future decisions and ensure no one can try to pull the rug out from under the other.
Hiring Your Team
Outside of founders, it is also important to begin thinking about staffing. The people you surround yourself with will become your work family and are pivotal in terms of your success as a founder and business owner. Some of the first roles you will want to hire are accounting and human resources. A human resources individual can assist with the hiring process, confidentiality agreements, and help write things like your employee handbook. Getting an accountant and accounting software not only makes you more legitimate but will remove obstacles and stressors in the near future. While on the subject of accounting, it is also important to think about bank selection and account distribution. Keeping your business and personal bank accounts separate is crucial as well as setting up a tax id or EIN. If you are still fundraising or know you will be requesting funds in the future, this is also a good time to prepare a pitch deck.
You also should think about how many employees you will need to start out, or if you will need any. What will you require from potential candidates and what are your expectations in the interview process? What does the path for growth and advancement look like for those you bring on to your team? What are hiring requirements in your state and what formal offers need to be made to comply with state and federal regulations? What will your firing process look like and what state laws are in place to protect your employees? I know these questions may seem daunting or nit-picky, but thinking through the little things before you get there will not only give you insight but peace of mind. Choose the people you bring onto your team wisely and be diligent about creating a success-driven environment.
Space, Insurance, and Permits.
Other last-minute pieces to think about when creating your business are insurance, physical office space, and permits. What type(s) of insurance will you provide those you employ? Does your product or service come with insurance? What coverage do you as a business owner need? What kinds, if any, of permits will you need? Insurance may be scary, but finding a few business insurance agents in your network and talking to them about your needs is nothing to be afraid of.
What about a physical location to conduct your business? In what state and city do you want to be your home base? Are you going to be downtown or in the new suburb? Is that where your target market is? If not, do you own your own domain to conduct your business online to reach your intended audience? Have you purchased similar domain names and even potential misspellings of your domain so you can redirect users to your site? Location, both physical and digital, is one of the most important elements to consider when starting your own business.
Overall, creating a business is exciting, promising, and even a little risky. However, you have the power to avoid some associated risks by asking yourself important questions and planning ahead as best you can. If you have more questions about starting your business, feel free to check out our ebook at https://codelation.com/validate-your-startup/.