Jeff Haden at Inc.com recently wrote an article entitled “How to Start a Small Business in a Few Hours” (see link below). He recounts how one of his neighbors incessantly talked about starting a small business, but never actually took the first steps toward doing so after sharing his ideas for six months.
Often, new entrepreneurs mystify the process of starting a new business, Haden asserts. They are often intimidated by complexity and their lack of knowledge about what legal tasks are required to actually begin business.
With the goal of helping his neighbor actually take the first steps necessary to launch the business, Haden bet his neighbor they could complete these first steps in under three hours. He provides nine simple tasks that can be finished, together, in under three hours:
- Choose a company name, any name (because that name doesn’t have to be the name of your brand)
- Apply and receive an Employer Identification Number (EIN) from the IRS
- Register a trade name (assuming you know what you want to be called)
- Apply for a business license with the local Chamber of Commerce
- Complete the necessary tax forms
- Determine what permits you’ll need, and apply for them
- Fill out forms for a certificate of resale
- Create a business bank account at a local bank
- Start your own simple accounting system
At the end, Haden says “And now you’re an entrepreneur, with all the documents to prove it”. While any sophisticated lemonade stand-minded entrepreneur might only need concern his- or herself with these tasks, it is much more likely that most substantial business ideas will require many more tasks. The entrepreneur will spend days, if not weeks, launching the business.
Perhaps starting a business isn’t so simple after all—or, at least, if the business idea stands to be highly technical, profitable, or complex (and let’s face it, the best ones are), at least a few more steps are required:
10. Determine an appropriate business structure
Who will own the business? One person? Two people? The financiers and the entrepreneur? Who will run the business? Will the owners be separate, or will they be a part of the business’s launch and operations? What kind of liability protection is desirable for this business, based on the products or services it is contemplating? These questions and more must be answered to determine whether to structure the business—legally—as an LLC, corporation, sole proprietorship, or partnership.
11. Draft contracts and agreements
Smart new business owners know that contracts are their first line of defense against customers, employees, partners, landlords, and even clients. Will the business need non-disclosure agreements? Contracts for sale of goods? Services? How will disputes be mediated?
12. Retain formal legal services
Lastly, for all other major steps, a new business should have the support of a seasoned lawyer to put protections in place and defend the company if need be.
Starting a business still involves complex tasks and questions without clear solutions and answers. Getting past the basic steps, as Haden outlines, businesses should consult with legal counsel to pursue serious opportunities. If you need help with steps 10-12, consider reaching out to Vlodaver Law Offices, LLC at www.vlodlaw.com.
Minnesota Business 