Just like with a high octane architectural effort, your new small business has the best chance of succeeding with a proper build. That means the structure needs to be securely thought out before being put into place. In both cases, accomplishing this takes planning — lots of planning.
Name that category
When it comes to your fresh business, making a go of it begins when you choose what kind of operating entity you undertake. According to the Small Business Association (SBA), the selection is abundant and so you’ll be prudent to work with an expert like a tax attorney or a Certified Public Account (CPA) to pick the right one.
While many new business owners will choose a sole proprietorship, your advisor will likely want you to consider either a limited liability company (known as an LLC) or a full-blown corporation. Sure, the sole proprietorship requires the least effort in terms of red tape and set-up. However, the other two options will likely serve you better in the long run in terms of taxes, legal liability and the future ability to sell your business if that should come to pass.
Another task to put your business in the right realm from the start is to establish a trust. That way, if something untoward is in the offing down the road, your company may be at risk, but your personal assets are not. That said, the few thousand dollars it costs to set up such a trust is money well spent.
Other areas of concern when building a proper structure include discerning your intellectual property from your new business, establishing a solo 401k, and officially registering the name of your fresh firm in the best light possible. The later is highly important when it comes to being able to find lenders willing and able to help launch your new venture.
In general, starting a new business in the right way may very well turn out to be the best business move you can possibly make. Doing so will also likely be a comforting move as you take on this exciting, but often frightening venture. Now who can argue with that?
This article was written by Jane Lasky for CBS Small Business Pulse.