Starting a business is an exciting, challenging experience. It’s also very scary. You can do everything right and still end up at the bottom of the ocean financially or emotionally. Hiring a business lawyer Oak Park Illinois to help you craft a sound business strategy will lead to success. The Law Office of David Hyde will make sure your business is viable and able to evolve. Call today at 312-210-9598 for a consultation.
The good news is that there are plenty of things you can do to make sure that you don’t have a bad experience or suffer financial losses. There are some common mistakes new entrepreneurs make when they’re just starting out, but you can definitely avoid them going forward.
Choosing the wrong business structure
When you start a small business, one of the biggest decisions you’ll need to make is what kind of company structure will best suit your needs. There are many factors involved in making this choice and some of them can be confusing.
Sole proprietorship – In this type of business structure, everything is owned by one person who acts as both owner and manager. It’s easiest to set up but also comes with exposure risks because there are no legal protections against creditors’ claims or lawsuits against an individual.
Partnership – Partnerships have two or more owners who share ownership equally but don’t necessarily contribute equally in terms of time spent on running operations. Each partner may receive different compensation for their work depending on how much effort they put into managing day-to-day operations. In addition, contributing capital investments that are put into building up their businesses can make an impact on compensation. Contracts are essential to ensure both parties and the business are protected.
LLC – The limited liability company (LLC) is a corporate structure designed to shield its owners from personal liability for the company’s debts and obligations. The regulation of LLCs differs from one state to another, offering flexibility in their formation and management. LLCs welcome a wide range of businesses.
One of the key advantages of an LLC is that it doesn’t pay taxes directly on its profits. Instead, the profits and losses are passed through to its members, who then report these financial aspects on their individual tax returns.
There are other structures to consider and you want to make sure that you are choosing the one that works best for you. Your business is unique and our business lawyer Oak Park Illinois will provide you with the best options to protect your business as you scale and grow.
Not having enough capital
Capital is the money you need to start your business and keep it going. Your startup costs, such as equipment and supplies, will be determined by the type of business you’re starting. You should also consider how much money you’ll need to cover operating expenses while your company ramps up sales.
While there are many ways to get capital for a small business, most entrepreneurs start with personal savings or borrow from family members or friends. You can also try to acquire investors. It’s important not only that investors understand what kind of risks they’re taking when investing in something new like this but also that they feel confident enough in themselves so they can sleep well at night knowing whether or not everything went according to plan. It is also important that you have a sound financial strategy so your business is viable and sustainable.
Mismanaging funds
If you have strategic goals for your business, a plan to meet those goals, and you execute your plan with fidelity, you are setting yourself up to experience success. The Law Office of David Hyde has experience providing business advice tailored to their specific needs. Contact our business lawyer Oak Park Illinois today to get started. The sooner you do, the sooner your vision can be realized.
You need to have a budget. This is a no-brainer, but it’s easy to forget that when you’re starting out and excited about your new venture. Make sure that you have set aside some money for marketing, advertising and other expenses related to getting your business off the ground. And, stick to it.
Keep records of all business transactions in order to stay organized and on top of things as they happen. You don’t want any surprises later down the line when it comes time for tax season. If this sounds like something that would stress you out too much, consider hiring an accountant or bookkeeper who can help keep track of everything for you throughout the year. Understanding how much money should go into each category before spending anything is also a good idea. If possible, try not exceeding these amounts.
Expanding too quickly
Expanding too quickly is one of the biggest mistakes you can make when starting a small business. It’s easy to get caught up in the excitement of growing your company, but expansion is not always a good thing. Expanding too quickly can lead to financial problems, which will make it difficult for you to manage and grow your business effectively. Employees may also become unhappy if they are overworked or underpaid due to lack of funds or resources needed for their jobs. If this happens frequently enough, they may quit or get fired because they feel undervalued by their employer.
If expansion in the future is part of your long term plan, that is great. Make sure you have the finances in place to sustain your business during that period of growth.
A business lawyer Oak Park Illinois will make sure your business is set up properly
Having solid contracts in place before you start your business is essential. Contracts should cover all the points of a business relationship, including payment terms, confidentiality agreements, and non-compete clauses. A lawyer can help you draft a contract that covers these issues and more.
You also need to hire people who have the right skills and that are a good fit for your company and the culture you want your business to have and who can carry forth those values. You want people that are a good fit for your management style.
When you’re starting a business, it can be tempting to go with the flow and do things on your own. However, if you want your company to succeed in the long run, it’s important that you have the proper legal structures and people in place from the beginning and a business lawyer Oak Park Illinois can help. A good business lawyer will help ensure that your company has an appropriate corporate structure, is properly registered with state officials, all contracts are drafted correctly and signed by both parties before being finalized, and anything else you may need to get your business off the ground.
It’s important to remember that starting a business is a long-term commitment. You’ll have a lot of ups and downs along the way, but if you’re able to keep these mistakes from happening in your company then it will make things much easier on yourself. Contact us today for a consultation.