Here is a quick list of issues that are important to consider if you’re planning to start a business or have recently done so:

Why?

Know and understand all of your reasons for starting the business.  Don’t start a new business just for the thrill of it.  Owning your own business is hard work and the name of the game is usually to make a profit.

Legal structure

Determine which type of legal entity you are going to use to in your business to protect your personal assets.  There are various options for liability protection and you should consult your advisors to decide which entity will work best for you.

Taxes

Consult your tax advisors to assist in obtaining your tax identification number and making appropriate tax filings for your business.

Record keeping

Continue to document your corporate activities and keep corporate records. This is often difficult when you are busy, but it is important for at least two reasons.

First, for liability protection, you need to demonstrate that you are treating your business as an entity separate from yourself. Second, you need to be prepared for various audits that may occur.

Make sure you have policies in place that meet applicable legal requirements for the retention of company records.  It is also important to monitor the storage and retrieval of documents as required.

Compliance

Provide for a system to monitor compliance with applicable statutes and regulations for your business.  Put in place policies and provide for someone to monitor the policies.  Without a system in place to monitor them, they are easily forgotten.

Family support

Demands of a new business often take 80 to 100 hours per week.  As a result, success and survival takes serious support from the entire family.

Families must make financial and time sacrifices.  Involve everyone in the family in the decision and planning process for these reasons.

Financial resources

Don’t underestimate your financial needs.  New business owners often spend their capital more quickly than they anticipate. Realize that few customers pay promptly, and plan for that.

Realize that cash will be tight. Develop realistic budgets and stick to them.

Marketing

Take time to thoroughly investigate the market.  Target the customers and competition for your particular business.  Take the time to answer the question, “How will I make money?”

Research pricing options for your product or services.  Cheaper is not always better.  Do the math: Calculate fixed and variable costs carefully.  Research the market, as well as the competition’s fixed and variable costs.

Do not skip the marketing step.  Plan and budget for marketing in the early stages and throughout the life of your business.

Employees

Employees are an important part of most businesses, and the most important part for many. Don’t forget to plan for the handling of employee issues.

An employee handbook is a good idea. A handbook provides written and defined policies for job performance, hiring and firing, compensation, benefits, and a variety of other employee issues. Defined written policies help avoid legal problems and low morale.

Protection of information

Take appropriate actions to protect your proprietary information.  The protection of intellectual property and customer lists from competitors can make or break your business.

Management

You cannot do everything yourself.  Realize what you can do best and delegate the rest.  Find the strengths of others and use them to further your business. If you attempt to do everything yourself, the business is destined to fail.

Advisors

Consult appropriate advisors. The failure to consult advisors often costs more later. Issues that weren’t handled correctly from the beginning grow to be even larger and more costly than if they were handled correctly from the start.

Continuous improvement

The biggest mistake is not to learn from your mistakes.  Take the time to realize what you have done right and what you have done wrong.  Repeat your successes.  Avoid repeating your failures.

Starting a business is a huge decision.  Mistakes will be made but planning and researching in advance effectively can minimize those mistakes.