As you are thinking of starting your own business, you’ll need to get clear on a number of issues to ensure both you and your operation are properly positioned for success. Oftentimes, aspiring entrepreneurs jump headfirst into business ownership, with false expectations of what it takes to run a successful business, and they quickly find that the reality of owning a business is not at all like they thought.
As with any serious endeavor, you need to approach your new venture with eyes wide open. With this in mind, here are 8 questions you should ask yourself to get a better idea whether or not business ownership is the right path for you. Of course, these are just a few of the factors you’ll need to look into when starting a new company, so before you open your doors, make sure to meet with us, your Family Business Lawyer™ to discuss the specifics of your particular operation.
01 | WHAT ARE YOUR MOTIVATIONS FOR STARTING THE BUSINESS?
If you are starting a business because you want to make more money and work less hours, consider whether business ownership is the best path. Yes, when you own a business, you do not have any cap on your income, but starting and running a business will require you to work harder than ever before, likely with little to no pay in the beginning, and none of the security or certainty of a 9-5 job.
And even then, there’s no guarantee your company will succeed. Make sure you are opening your business with the right motivations, and you are being realistic about how hard it’s going to be, how much money it’s going to take, until you get to where you want to be with your time and money.
If you’d like to have a conversation with us before you open your business to ensure the time and money equation make sense for you, so you are going in eyes wide open, give us a call and we can have a LIFT Business Start-Up Session for your business before you even launch.
02 | IS THERE A MARKET FOR WHAT YOU ARE SELLING?
Before you launch your business in full, you may want to conduct some market research to ensure that there are buyers for what you are selling. If you were a big company, you’d hire a professional market research firm like Nielsen, Gartner, Forrester, or IDC to conduct your research. But if you don’t have that kind of funding, there are several low-to-no cost methods that can give you insight into whether buyers will buy what you are selling.
First, clarify where your target market of buyers spends their time and money, and go there (whether virtually or in-person). Begin by talking to as many people as you can, inviting them into conversation with you from a place of curiosity about what you will be selling.
Is there immediate interest? If not, you may want to reconsider what you are selling, or clarify whether you need to figure out a better way to talk about what you are selling. If you’d love to have a brainstorming session before you bring your product or service to market, give us a call and ask about the LIFT Business Start-Up Session.
03 | ARE YOU CLEAR ON YOUR TARGET CLIENT OR CUSTOMER?
If you aren’t able to take action on determining if there is a market for what you are selling because you don’t know who your target client or customer is or where to find them, pause everything until you figure out who your ideal client or customer is and where to find them.
04 | HOW MUCH FINANCING WILL YOU NEED?
New business owners tend to have unrealistic expectations about what it actually costs to get a new business off the ground. Rather than guessing how much startup capital you need or expecting to finance your startup or growth out of sales or ignoring the financing altogether, contact us and ask about getting our support to create a “Money Map” with you that clearly outlines your venture’s funding needs, including paying you, if you need to get paid from your business.
When you work with us, we will support you to clearly identify your company’s financial needs not only in the startup phase, but on a regular basis throughout your company’s lifecycle using a process called Money Mapping. Additionally, we can help you determine if your business is properly structured to hit your financial goals, and help you make the appropriate adjustments to your operation whenever necessary to hit those benchmarks.
05 | DOES YOUR PRODUCT OR SERVICE HAVE HIDDEN COSTS OR OBSTACLES?
Of course it does! Part of being successful in business is navigating the hidden costs and obstacles, not whether they exist. Your job is going to be to prepare for those hidden costs or obstacles, so when you hit them, you can see them as opportunities for creativity.
06 | CAN YOU BUILD A SUCCESSFUL TEAM?
Few people start, run, and grow a successful business alone; most companies have numerous talented people working together to achieve a common mission. To this end, you’ll need to find the right people to build your business alongside you.
As your Family Business Lawyer®, we can be an invaluable asset when it comes to building your legal, insurance, financial, and tax (LIFT) team of advisors. You definitely don’t want to do this part alone. Instead, get our support as you build your advisory team.
07 | DO YOU HAVE INTELLECTUAL PROPERTY TO PROTECT?
Your intellectual property (IP) is one of your company’s most valuable assets. In fact, a recent study found that up to 80% of the value of today’s typical business is made up of different forms of IP. Given the value your IP represents, you’ll want to take the appropriate steps to protect it and get the most benefit from it.
To ensure you see what you have from an IP perspective and that you’ve properly protected it, you want to have an experienced business lawyer like us perform an IP audit for your company. An IP audit is a comprehensive, systematic review that identifies all of your IP assets, and evaluates all of the potential risks and opportunities associated with those assets. Contact us, your Family Business Lawyer™ today to make sure your company’s intangible assets are properly protected and leveraged.
08 | DOES YOUR COMPANY HAVE THE RIGHT LEGAL FOUNDATION?
The business entity structure you choose for your new company is of paramount importance. Indeed, your choice of business entity will affect everything from the amount of taxes you pay to the kind of records you keep and even how vulnerable your personal assets are to lawsuits and debt incurred by your business. Given how important your entity is, it’s crucial to consult with us before making a decision on your choice of entity.
However, your choice of business entity is only one pillar of your company’s legal, insurance, financial, and tax (LIFT) foundation. You’ll also need to make certain your business has the right insurance, financial systems, and tax strategies. Fortunately, as your Family Business Lawyer™, we can support you in all of these areas
TAKE YOUR BUSINESS TO THE NEXT LEVEL
As your Family Business Lawyer®, we have systems in place to get proactive with your business and training to help you keep more money in your business, watch out for risks and pitfalls, handle sticky situations, and effectively tend to the parts of your business that are especially challenging, particularly those involving the legal, insurance, financial, and tax (LIFT) components of your operation.
Before you start your new business—or if you’ve started but may not have all of your legal, insurance, financial, and tax systems and advisory team in place—take our free LIFT 20-Point Assessment. Just taking the 20-Point Assessment is a huge benefit, as it shows you the gaps in your business’ foundation that need the most attention.
From there, meet with us to conduct a thorough audit of your business, so you can implement our full LIFT Foundation System into your operations. In addition to helping you establish a solid LIFT foundation, we will serve as a trusted advisor to help you sustain and grow your business for years, and even generations, to come.
To this end, our services go far beyond simply creating legal agreements and other documents for your business and then never seeing you again. In fact, we’ll develop a relationship with you that lasts not only for your lifetime, but for the lifetime of your business and your successor, if that’s your wish. If you are ready to take your business to the next level and reach goals you previously thought were unattainable, schedule a LIFT Start-Up Session or LIFT Business Breakthrough Session with us today.
This article is a service of of Liz Smith, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule your appointment at 907-312-5436, or find a time for us to call you.