Beginning your first business venture can be so exciting that the last thing you want to do is burst the bubble by sitting down to do paperwork. You want to be out there dreaming up ideas, wowing investors and preparing to leave the competition for dust. Yet, if you do not get your paperwork right, you’ll be out of the game before you’ve started.
Here are some of the tasks that every budding entrepreneur needs to consider:
- Contracts
If there is more than one of you, get some kind of partnership agreement. Use it to set out the ground rules for your working relationship and define an escape route if you discover you do not work well together.
You will also need written agreements for other business relationships, such as those with employees, clients, suppliers or landlords.
- Permissions
Some ideas have not yet been done in your area because they are not allowed. You need to thoroughly investigate all federal, state and local restrictions on doing business. Even if something is allowed in your town, it might not be allowed in your street or your building.
Once you are sure a specific business activity is permitted, you still need to get all the relevant licenses.
- Tax
If you are going to make money, the IRS will want to know about it. Discovering how different ways of forming your company will affect how much tax you pay can give you a massive head start. It’s hard enough to turn a profit when you are just starting without paying more tax than you need to.
If researching the legal aspects of setting up a company is not your thing, get help. You might find it dull, but it is crucial.
