Industry research by Small Biz Trends suggests that only about 40% of startups would rise in popularity. Moreover, a mere 9% of all startups survive ten years. The boom in technological advancement as well as the rise of faster internet services has allowed thousands of startups and small businesses to crop up over the years. Owning your own company is much easier now than it was a few decades ago.
Yet, local laws haven’t changed much. From determining the structure of your business to ensuring you don’t overstep any legalities, navigating the business world can seem quite confusing. Here are five essential tips every business owner should keep in mind!
1. Listen to Your Gut
It isn’t uncommon to encounter situations where certain suppliers or business partners divulge some information that doesn’t sound or feel right. However, we let go of that gut feeling and proceed with the deal anyway.
It is important to listen to your gut and, if not sure, then to consult an expert and get a professional opinion as to whether you have overlooked a crucial fact. Most experts do not charge for an initial conversation, which may be all you really need to put those worries to rest.
2. Access Help Early on in the Business Cycle
All businesses need legal assistance. However, this should start early on in the business cycle. You need legal help the most when you are just starting out. You may feel less burdened with legalities at the start, but this is the time when you begin developing your business idea and need to get the initial considerations out of the way.
Involve an attorney as soon as possible and avoid being caught off guard with complications such as co-founder ownership or complexities relating to the company structure. An absence of legal documentation can damage the company in the future.
3. Evaluate Carefully the Entity You Are Dealing With
The way you deal with partnerships would be entirely different from how LLCs, C-Corps, and a variety of other business structures work. For example, an LLC is a legal entity of its own, which means that it can be sued. However, when it comes to a partnership, the partners are the legal entities.
If you don’t know the legal person you are dealing with, it is important that you ask. A limited company structure provides owners with some protection through limited liability. However, directors are still responsible to the company so if any fraudulent activity occurs from their end, they can also be held personally liable.
4. Keep Up with Tax Rules and Regulations
One of the areas where most new business owners struggle would have to be taxation requirements. Although they might not be a priority immediately, they should turn into one quite soon.
Tax problems can affect the company’s credibility and can scare off potential investors. Moreover, the more penalties pile on, the harder it will be for your startup to survive in the future.
5. Filing and Documenting Everything is Key to Success
Document everything to avoid issues later on in the business cycle. Documentation isn’t just important for internal affairs. In case of any legal or court-related issues, proper documentation can definitely come in handy.
Having all the company’s records in order allows you to report reliably on any incidents, deal with investigations, and provide evidence. It adds credibility to the company as it reveals specific preventative systems that were kept in place at the initial stages.
Here’s a handy checklist you can use!
Corporate Documents:
- Articles of Incorporation
- Bylaws
- Meeting minutes (Board of Directors and Shareholders meetings)
- Corporate resolutions
- Ownership agreements (partnership, shareholder, or operating agreements)
Financial Records:
- Balance sheets
- Income statements
- Cash flow statements
- Tax returns and related documentation
- Bank statements and reconciliation reports
- Expense receipts and invoices
- Payroll records
Legal Documents:
- Contracts and agreements (with clients, vendors, partners, employees)
- Employment contracts
- Non-disclosure agreements (NDAs)
- Intellectual property documents (patents, trademarks, copyrights)
- Licenses and permits
- Compliance documentation (industry-specific regulations, safety standards)
Operational Documents:
- Standard operating procedures (SOPs)
- Training manuals
- Project plans and reports
- Inventory logs
- Quality control and assurance records
Communication Records:
- Email correspondence
- Meeting notes and summaries
- Customer service logs
- Marketing materials and campaigns
HR Documents:
- Employee records (applications, resumes, performance reviews)
- Benefits and compensation records
- Time and attendance records
- Disciplinary action documentation
- Termination and exit interview records
Insurance Documents:
- Policies and coverage details
- Claims filed and settled
- Risk assessments and mitigation plans
IT and Data Management Records:
- IT policies and procedures
- Data backup logs
- System maintenance records
- Cybersecurity incident reports
Final Thoughts
Leave no stone unturned when it comes to incorporating certain legal strongholds within your organization. If you are unsure what your business needs at your current stage of operations, it is always wise to bring on board an expert who knows exactly what they are doing.
Expert Orlando, FL, criminal defense lawyers can be brought on board, not just to solve problems but also to set certain preventative measures in place that prevent issues from occurring. Experts can also guide you through taxation issues and penalties, audits, claims when your business rights are transgressed, and much more!
Why wait? Act now and secure the future of your business. Make sure your startup stands out in its strength when pitted against other giants in the industry.