Identify a Customer Need
When starting a business, you want to make sure there is a demand for the product or service you're planning to offer. Begin by identifying a need, developing an idea, and taking action on it.
Entrepreneur and startup coach Chuck Cohn did just that when he launched his tutoring service. He remembered struggling to find a tutor for his Advanced Placement classes in high school. He saw the potential in two of his college friends to be great tutors. Now, his tutoring service boasts 60 workers who support a network of more than 1,000 tutors.
"It's not about having that 'billion-dollar idea,'" Cohn said. "It's about identifying something that you feel you can do better."
Want to start a business? Keep these tips in mind:
- If your business is based on a novel invention, research existing patents that may be similar to your idea using the U.S. Patent and Trademark Office's patent search tool.
- Start bulletproofing your business by incorporating to protect your financial interests.
- Create business contracts and agreements as you start moving beyond the idea phase.
- Consult with a lawyer to make sure you are taking the proper steps.
Seek out someone with experience in the industry you want to enter to make sure you have a solid understanding of it. Talk to an attorney who is well-versed in business law and make sure to take the right steps so you don't hit any legal snags.
Protect Your Business Legally
Starting a business can be a risky venture if you don't take the right steps. It's important to protect your own assets and bulletproof your business to keep it running smoothly.
Once you accept any funding or enter any agreements with potential partners, even if it's just a verbal OK or a handshake, your business moves beyond the idea stage into something more substantial. You want to be protected at this stage of starting a business so your idea doesn't end up in legal jeopardy before even getting off the ground. Consider the following:
- Incorporate your business. Incorporation establishes the legitimacy of your business and protects your personal assets, including personal savings and your house. Consider which business entity to choose.
- Apply for a provisional patent. This protects your ideas and controls how others use them.
- Make sure to follow any corporate requirements from the beginning. Keep the proper records and comply with all the steps required to make sure you are running your business in compliance with the law and that it follows the best operating procedures.
- Research what types of business contracts are needed, and make sure to get everything in writing as you start accepting funding and hiring employees.
Check out our "7 Ways to Bulletproof Your Business" for more tips and advice. Remember, we can connect you with a Rocket Lawyer network attorney for affordable legal advice and answers to questions specific to your business.
Find Partners
Many people start a business alone. But for others, that can be daunting. They may lack all the necessary skills or the time to commit to building the business by themselves.
Starting a business and turning your ideas into reality requires evaluating your skills to see if you have what it takes to bring your idea to fruition on your own. If not, identify your weaknesses and find people who can fill those gaps.
Join a business networking group and participate in online forums. Search out budding entrepreneurs at area colleges by talking to professors and students. Talk to coworkers.
Remember to protect yourself and your idea once you start seeking help. There are cases where courts sided with business owners' partners without the owner even necessarily agreeing that the people were their "partners." Get everything in writing with a Partnership Agreement.
Create a Business Plan
You wouldn't drive across country without mapping out the way first. Why skip this step when starting a business?
A Business Plan is a roadmap that helps you arrive at your destination safely. It makes sure you follow the right route and helps guard against detours along the way by plotting out potential roadblocks. Rocket Lawyer provides you with a free Business Plan document to help you outline business goals, projections, marketing strategies, financing and other important facts as you start your business.
Comply with Tax Laws
Starting a business has its share of expenses. Many of these expenses, including paying for consultants and buying initial supplies, can be written off your taxes.
It is important to make sure you take the right steps to comply with federal tax regulations and those imposed in your state. The Internal Revenue Service recommends the following steps for starting a business:
- Apply for an employer identification number if applicable.
- Select a business structure.
- Choose a tax year, calendar or fiscal.
- Have employees fill out required forms, such as Form I-9 and Form W-4.
- File your business tax return and pay any taxes that you owe.
It is also important to track your expenses and income carefully with a Profit and Loss Form. Bulletproof your business by making sure you take all the necessary steps to comply with IRS requirements.
Many business owners, new and seasoned alike, choose to work with a tax professional to make sure their taxes are prepared and filed on time and they receive the credits and deductions to which they're entitled. Rocket Lawyer can now match you with a tax pro for affordable and convenient tax filing services. Don't do your taxes™ – Let us do them for you.
Following these steps as you start your business will help you turn that great idea into a successful enterprise. If you have legal questions specific to your business, reach out to a Rocket Lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
