Entrepreneur's start with a dream...
Financial and Personal Independence...
Providing for their family...
Living the American Dream...
While dreams can and do come true, it's easy to miss some simple legal steps that can make the success of your business a reality and provide a solid foundation for the business as it grows.
When you're starting your business, keep these five tips in mind:
1. Don't Mingle Personal and Business Funds
When you start your business, file with the Secretary of State the appropriate paperwork to lay the foundation of your corporate structure. Forming a limited liability company or corporation will help to avoid personal liability, reduce the likelihood of tax audits and keep your personal assets from being at risk from corporate actions.
You will also need to file for a Employer Identification Number (EIN) and can be done easily by filling out an SS-4 or going online to www.irs.gov and searching for EIN Online.
Once you receive your corporate paperwork and have an EIN you should open a separate bank account for your business. All deposits and checks for the business should be made from the account. Never take cash out of the business account for personal expenses.
2. Register Your Company Trademark
A Trademark is an intangible asset. Your biggest intangible asset is your reputation and you've worked hard to build that reputation with your customers through great customer service and quality products. If another company is running a business under the same name as your business but doesn't have the same integrity for customer service or products your reputation can and will be damaged. Trademarking your company name gives you the legal right to protect your reputation.
Trademarks aren't just for the IpodTM and GoogleTM. Your small business needs one, too. Consult with an attorney about how to protect your reputation through a Trademark.
3. Find and Hire a Really Good Accountant/Legal Advisor
Amazon, Nolo Press and even Barnes and Noble have hundreds of books on business, but having a relationship with a trusted advisor, such as an accountant and attorney, is invaluable.
Your accountant should do more than complete your tax returns every year. You should actually seek out a Certified Tax CoachTM, individuals who have decided to be proactive with their business clients by performing tax planning and not just simply tax compliance. Not only will they know what deductions are yours for the taking within the tax code, they'll also provide you with a detailed plan on how to minimize your taxes and establish procedures to protect you from an IRS audit.
4. Protect Yourself with Written Employment Policies
All businesses have information that is extremely valuable to the operation and success of their business. It can range from a product trade secret, a customer list or key vendor contacts. You don't want this information revealed, but you need to have written non-disclosure and non-competition policies and signed by your employees. This will help prevent former employees leaving with and sharing this valuable information
No one wants to be sued. But ignoring a lawsuit is worse than being sued simply because you believe there is no merit to suit.
Every lawsuit must be answered, period! Do not put this off. If you are sued contact your legal advisor immediately so they can deal with the matter accordingly and avoid what may be a simple matter becoming a nightmare.
Building and growing a small business can be one of the most rewarding experiences in a lifetime, for you personally and for your family. Follow these simple steps and you can be sure that your business will be off to a good start.