6 Things To Think About Before Starting Your Business
You can surf the internet and find all sorts of information on how to form your own company and file the required documents, but if done incorrectly the owner may not be protected from personal liability. “Fill in the blank” documents are generic and are not drafted to suit your particular business. They are crafted to cover the most common issues and many times are not even crafted with Virginia law in mind. Additionally, to receive the liability protection you are seeking by incorporating, you will need to complete filings that may include by-laws, execute organizational minutes, make certain IRS elections, and many other monthly and yearly decisions that will go a long way to determining if your business will shield your personal assets from suit.
You need to know how to handle agreements/contracts, non-competes, non-disclosures, non-solicitations, and determine which if any employees should sign these agreements. You will need to outline the policies so there is clear understanding of expectations in a handbook that all employees read and sign. Then you need to be consistently and uniformly executing the established procedures. Contractor or employee? You need to know how the IRS defines these terms, as the IRS will not default to how you identify these workers.
There are several questions you need to ask. First, do you need life insurance on the owners? Are your assets properly insured? If you handle sensitive client information, are you insured against computer crimes and hacking? Do you know the difference between D&O coverage and P&C insurance? You need to determine what insurance best covers your business needs and be adequately insured.
Are you an LLC, a PLLC, an S-Corp or a C-Corp? Do you know the difference and how it affects the operation of your business? You must consider taxes, record keeping, and even a documented succession plan to positively maintain the day-to-day operation of your business in case of suit, death, disability, retirement, or tax audit
Protecting Creative Assets /Intellectual Property.
You may not have thought your domain names, logo, brand or IP need protecting, but these are valuable assets. You may hire outside vendors for some or all of this type work, so having an appropriate written agreement in place before work is done is crucial to keeping that work from being reused or resold.
You must have a business plan for more than presentation to a bank or investors. You need to make sure you are thinking long term and not borrowing a large sum to start, spending too much, and then not being prepared for the lean months as you grow.
What Small Business Advisors Can Help?
You need three trusted advisors when starting or operating a small business.
A tax accountant – Because record keeping and paying taxes are like death, required of us all.
An insurance agent – To explain coverages and help determine which type and amount needed to best protect you, your assets, and your company.
A knowledgeable attorney – Being ignorant of laws will not keep you out of prison or shield you from civil liability. An attorney can provide you timely guidance as your business grows.
You need competent professionals that help you make the right decisions. If you have any questions or concerns, please feel free to contact our firm to assist you.