Nearly 40 percent of Americans have a side business in addition to their full-time job, and just more than 30 percent are fully self-employed with that number rising. Before you start a new business there are four questions that every entrepreneur should ask:
How do I make money? This question should be asked throughout the business’ lifecycle, and you should be able to answer it in three minutes or less. You need funding, people and a product or service to offer. After you have identified the foundations of your business, put together your business plan and an assessment of your barriers to market entry – know exactly what your challenges are.
Whom should I partner with? Will you have business partner, or will you be a solo entrepreneur? If you are choosing to have business partners, find compatible partners with shared passion, vision and values (and who can live without money from the business in the first few years). But do not give away more than necessary – keep your equity for the long-term play if possible.
Have I put together the best team possible? No, we aren’t talking about your employees – yet! This team is your advisors. Find experienced outside legal, accounting, tax and business professionals who have already seen failures and successes. They will help you set up your business correctly, ensure you are profitable, help with taxes, and give you advice throughout the course of your business’ life cycle.
Have I built the strongest possible foundation? Choose the right type of legal entity (LLC, corporation, partnership). Form the entity and prepare the required legal documents. You should spend as little as possible on legal services at startup – instead focus on driving revenue and lowering overhead. An experienced small business legal team can help ensure that you are set up from success from the start, not trying to figure it out afterwards.
Robert S. Reder is the managing partner of Blythe Grace PLLC, a boutique law firm located in in Phoenix and Best of Our Valley winner.