If you dream of starting your own business and breaking free from the rigidity of a 9 to 5 job, you may be interested in a startup. Entrepreneurs who intend to start their own business have a great number of issues to contend with. Although television shows like Shark Tank can make it look easy, building a successful startup is a challenging process full of potential pitfalls. Almost 90 percent of all startups eventually fail. However, proper preparation and working with an experienced business law attorney can help you avoid pitfalls and build a thriving business.

Do Not Underestimate the Amount of Capital You Will Need

Most people hoping to start a business greatly underestimate how much money they need to actually start the business. You must consider not only initial costs but ongoing costs. It is also important to have some “cushion” so you can cover any unexpected expenses you face. Bank loans, private loans, and investors are usually the first places entrepreneurs look when building capital.

Reach Out for Help And Advice Before You Need it

Humility and a willingness to accept advice are two crucial traits of any entrepreneur. Do not be afraid to ask successful business owners and entrepreneurs for advice. They can tell you what mistakes they made when they were starting their businesses so you avoid making the same mistakes. Furthermore, work with a skilled business law attorney to make sure you do not put yourself in a position to experience any unexpected legal problems in your business.

Business owners have a number of options for structuring and managing a business. Determining the ideal structure can sometimes be difficult, and different types of business entities can provide certain advantages and drawbacks. In many cases, structuring a business as a limited liability company (LLC) is the best option. If you are starting a new business, bringing new partners into an existing business, or looking to change the way your business is structured, you will want to consider whether an LLC is the right choice for you.

Benefits Provided by LLCs

When a business is a sole proprietorship or general partnership, this may provide owners or partners with flexibility, but they may be personally liable for business debts. On the other end of the spectrum, a corporation may provide protections from liability, but owners or shareholders will need to meet a variety of complex requirements when operating this type of business. A limited liability company can offer a middle ground between these options, and it may provide a number of advantages, including:

• Protection from liability - As the name implies, an LLC places limits on the liability that applies to a business owner. An owner of an LLC usually cannot be held liable for business debts. Similarly, business partners and the business itself will be shielded from liability that affects one partner, such as the requirement to pay a judgment in a personal injury lawsuit. However, it is important to ensure that there is separation between the personal finances of an owner and the finances of the business. If an owner’s personal finances are intermingled with their company, a judgment against the company may “pierce the corporate veil,” and an owner may be personally liable in these cases.
• Tax benefits - An LLC may use “pass-through” taxation in which the business’s profits or losses will apply to the members’ personal income taxes. A pass-through deduction is available in these cases, which can provide significant tax savings.
• Flexibility - Members of an LLC are free to establish whatever management structure they choose. This will allow for simple decision-making and easy adjustments to business procedures whenever necessary. Members also have flexibility when determining how profits earned by the business will be distributed, and this may be done based on each partner’s level of investment or involvement in the business or other factors.

Contact Our DuPage County Business Formation Lawyers

If you are a business owner, it is important to make sure your company is structured in a way that will provide you with financial advantages and protection from liability. Stock, Carlson & Asso. LLC can advise you of your options during the business formation process, including helping you determine whether an LLC is the best option for your company. We will make sure you take the correct steps to establish a business structure and formally register your business, and we will also help you meet any other legal requirements that may apply to your company. We can assist with other business-related issues as well, such as creating or updating contracts or resolving disputes through civil litigation. Contact our Wheaton business law attorneys today at 630-665-2500 to learn how we can provide the legal help you need.

For many people, starting a business is the ultimate dream and though it may seem unattainable to some, it has been a reality for millions of Americans. According to the Small Business Administration (SBA), there were 31.7 million small businesses operating in the United States in 2020. Small businesses play an essential role in the U.S. economy, as they are responsible for employing nearly half, or around 47.1 percent of the American workforce. Starting your own business may seem daunting, especially when it comes to the legal side of things, but a business formation attorney can help guide you through the process. Here are a few things you should keep in mind when starting your business:

Make Sure You Have a Clear and Understandable Business Plan

The first step to creating any successful business is having a business plan written out. A business plan is exactly what it sounds like -- a plan for your business. A thorough business plan will contain information about the industry in which your business will operate and information about the scope of your business itself, a sales and marketing plan, how the business will be owned and managed, the way the business will operate, and basic information about the business finances.

Research the Market You Are Interested In

Before you start your business, you should do a lot of research. Writing your business plan will take a lot of research, but you should be intimately familiar with your industry if you are not familiar with it already. You should have a basic idea of what your competitors are doing, what they are selling, and how they are selling it. This can also help you develop and implement goals for your own business.

Most of us, at some point or another, have had those fleeting thoughts about a product or service that could serve as the foundation for a new business. On the other hand, maybe you have watched another company offer goods and services while knowing that you could do it better. So how does one go from the “idea” phase to the “action” phase of starting the actual business based on the idea? There are, of course, many steps, but the first important one is to determine whether or not the idea is truly marketable.

What Is Your Idea?

Not every business idea is going to grow into the next Microsoft or Google, and that is okay. A successful service or product is not necessarily going to break records or reshape the world as we know it. In order to be profitable, your idea simply needs to solve some type of problem for those you intend to reach.

Savvy entrepreneurs often pool their skills and resources to increase the chances of success. Unfortunately, when a partnership is formed under the wrong conditions, this pathway to success can quickly become a business owner’s worst nightmare. Learn how you can avoid the most common business partnership killers in the following sections, and discover how a seasoned business law attorney can help you proactively mitigate the possibility of a failed partnership.

Partnerships Born from a Lack of Money or Skill

In an ideal partnership, business owners have “synergy,” or a way that they complement one another. As an example, one partner might have the marketing tools and resources that the company needs to be successful while the other has a knack for thinking “outside the box.” Unfortunately, if one partner “needs” another in order to achieve success - perhaps one person has the idea and marketing skills while the other possesses the capital to start the business - any potential benefit of a partnership may be lost. To avoid this issue, partners are encouraged to share expenses, not capital. Also, you should never give away something that is yours (i.e. information, ideas, etc.). Instead, create an iron-clad contract that can protect your ideas and concepts, even if the partnership ultimately fails.