Updated: Dec 25, 2020
Being an Entrepreneur is not without its challenges. An idea alone does not a business make. As a founder, you’ll get super excited about the idea and think about all the different ways to sell your product. You'll need all the tips you can get for your startup. There are certain basics that often get overlooked.
1. What you name your business. Don't assume that because the URL is available, the name is available. You may be very creative and come up with a unique name or decide you are your brand and using your name is the best name for your new venture. Whatever you come up with, you’re likely to be swayed by whether or not the domain name is available.
Not so fast! Make sure that the name you've chosen isn't owned by someone else. In fact, the availability of the URL does not necessarily mean that no one else owns the name. You must do a trademark search (ideally you’d use a legal service of some sort to do a proper search for you). I found out that the word 'entrepreneur' is owned by Entrepreneur magazine. How's that for foresight?
2. Trademark your business name. Once you know that you have a unique business name, you should trademark the name. If you decide not to do so, you run the risk that someone else will operate a different business under the same name. Not only that, someone else can decide to trademark your business name at a future date at which point you’ll have to change your company’s name.
3. Investigate different corporate structures. Many sole proprietors set up as Limited Liability Companies (LLC). This protects your personal assets from any lawsuits. When your company is an LLC, you file an additional schedule with your personal tax returns. I learned the hard way that while this may be the most attractive way to set up a new company, it is also a way to increase your chance of being audited by the IRS.
Other options include partnerships, corporations, S-corps. Check with your accountant before deciding the best structure for your business.
4. Get Business Insurance. Most states require you to have certain kinds of business insurance. Make sure you don’t want to leave yourself exposed to legal costs if your business should be sued for any reason by a customer or employee. There are many other reasons including protection from data breaches (Cyber Liability Insurance) and protecting from possible property damage by a flood or fire.
5. Have a startup budget. Every business has set up costs. It costs money to incorporate, register your name, open a bank account, and buy insurance. There are costs associated with creating your online business regardless of whether or not you have a physical location. You'll probably have to pay for someone to create your web presence beyond just setting up a website. These costs add up. Plan to have enough funds set aside to keep you going until the revenue starts flowing.
Creating a business can be a lot of fun (in addition to all the hard work), just make sure you don’t forget to pay attention to these important details. If you need some help with the details, email firstname.lastname@example.org or schedule a free consultation here.