Forming a new business is one of the most exciting times in a corporate lifecycle. Whether it is a gigantic corporation or a small start-up, your new business will be built off of your passion and smart ideas. Unfortunately, cutting corners at this stage of the process can also lead to disaster. We have worked with enough businesses to know what is a warning sign when you are in the formation phase.
Setting yourself up for success is the best thing you can possibly do when starting a new business. Here is our list of 6 business formation mistakes that you want to avoid at all costs:
Jumping in Too Quick. The planning phase of a new business is one of the absolute most important elements. If you skimp on creating a plan for any one aspect of your new business, you are setting yourself up for failure. You want to create a plan for how your business will operate, who will operate it, what you will be selling, how much of it you plan to sell, and how much that all will cost to undertake. Lowballing your expenses is just as deadly as not planning at all.
Not Locking in Contracts. The best advice we can give to new businesses is to get everything down in writing. Whether it is your collaborations with business partners, employees, or important clients, you’ll want to have thorough contracts in place that detail your expectations for those relationships. These contracts should be approved by your trusted legal counsel.
Biting Off More Than You Can Chew. No matter the size of your business, you need to set realistic expectations for the first few years of operations. If you start by extending your means, things are just going to get worse and worse as time goes on. This is not an issue of size – even the biggest corporations in the world can overextend their abilities. It is an issue of scale, and of properly setting expectations.
Ignoring Marketing. All too often, business owners rely on the old adage of “if you build it, they will come.” Sadly, in the business world a more appropriate metaphor would be “if you build it, no one will have any idea that you built it.” Marketing is absolutely key to letting others know what your business is all about. You need to properly invest in it in order to be successful. If you think this is the area that you can skimp on, you should expect to see your sales and brand awareness continue to dwindle.
Leaving Your Intellectual Property Unprotected. The world of Intellectual Property includes trademarks, patents, and copyrights, and focuses on your ability to protect your own creations. Before you start your business, you should check to make sure that your names are not already trademarked by someone else. After you commit to your names, you should immediately begin the process of protecting your own Intellectual Property. This process can be lengthy, but it is rewarding.
Not Asking For Help. Trying to go in alone always leads to more problems down the line. Whether it is helping you draft contracts, helping you register your trademarks, or helping you form your own corporate entity, Cueto Law Group P.L. is there for your business every step of the way. Contact Cueto Law Group P.L. today with any of your business’s legal issues. From boardroom to courtroom, we’ve got you covered!
