Business formation issues are more common than you think

On Behalf of | Mar 13, 2020 | Firm News

Starting a business is not an easy feat. If it were, anyone would try his or her hand at it. Of course, you feel passionate about your business idea and feel ready to put in the hard work needed to create a sustainable company. Still, even with your best intentions in mind, you could still fall victim to certain business formation mistakes. Because starting a business is so complicated, anyone could stumble when just starting out. Unfortunately, some of those mistakes could spell doom for a new business, so you may want to watch out for some of the common errors that prospective entrepreneurs make. Common mistakes Though you want to put your best foot forward, starting a business takes more than just a good idea. Before you can start selling a product or providing a service, you will need to take many planning steps. Some issues that could arise during the startup phase include the following:
  • Not obtaining the proper business license
  • Not utilizing written contracts and agreements
  • Choosing the wrong business entity
  • Mixing personal funds with business funds
  • Not keeping thorough business records
  • Not creating a business plan
  • Trying to do everything on your own
  • Not keeping money set aside for taxes from the start
  • Undercharging your for service or product
  • Not taking measures to protect your intellectual property
  • Forgoing business insurance or not getting the right kind
  • Not having enough funding for startup expenses

After reading this list, you may think that you would never fall victim to such missteps, but they could happen to anyone. Unfortunately, any of these issues could cause a substantial amount of trouble for a new business, including potentially leading to legal issues. How can you avoid mistakes? As mentioned, one mistake is trying to do everything yourself. Without the right help from knowledgeable parties, you could easily obtain the wrong information or think certain information applies to your situation when it does not. As a result, enlisting help from the get-go could help you avoid a number of other potential errors. Fortunately, experienced business law attorneys can help address many issues that could occur during the business formation process. Plus, your legal counsel could instruct you on following Ohio business laws, guide you in choosing the right business structure and ensure that your business starts out on the best footing possible.