It is hard enough trying to generate income when starting a new business. Trying to focus on all of the other things that need to be done can either be overwhelming or simply forgotten. But if you want to succeed, then you need to have a good foundation. As someone who frequently helps new business owners through the process, I thought I would create a checklist of items you will need to ensure your success.

▢ Create a separate legal entity to operate your business.

This is a no-brainer. Doing this protects your personal assets from the risks you engage in as a business. For example, if you are a business that sells cookies and one of your customers gets sick from your cookies and has to go to the hospital, then what happens if they want to sue you because of it? Well, if you have created a separate legal entity, then they can only sue that separate legal entity and the assets it holds, not you personally. However, if you have not created a separate legal entity, then they can sue you and pursue recovery from your personal assets.

▢ Put an operating/partnership agreement in place.

This is the foundation of any good business that intends to last. Without a clear understanding between the owners as to what is going to take place with the business, confusion and distrust usually follows. These agreements do not need to be complicated. It should, however, spell out how much ownership each individual holds, what is being contributed, what happens if things go well and conversely if things do not go well and how the day to day operations of the business will be handled.

▢ Talk to an accountant or tax attorney.

Many business owners get to the end of their first year and just hope they have saved enough to pay whatever taxes may be owed. Taxes can include things like unemployment tax, FICA tax, transactional privilege tax, corporate business tax, personal income tax, and other local taxes. Spending just one hour with a knowledgeable accountant or tax attorney can provide you with certainty in what your tax liability is moving forward. That piece of mind alone would be worth it.

▢ Figure out if you need any special licensing for your business.

Many businesses do not require you have a special license to operate. However, if you are engaging in trades or services industries, then there often are licenses required to perform the trade or service. For example, electricians must be licensed through the Arizona Registrar of Contractors before performing any services. Before starting your business, it is necessary to understand what licenses you will need.

▢ Get insurance.

There are multiple types of insurance ranging in importance for new business owners. However, only two are specifically mandated by Arizona law. The first is auto insurance, which you should already have for any personal vehicle you have been driving. The second is workers’ compensation insurance. Failure to secure workers’ compensation insurance can result in not only personal liability for any injuries suffered on the job by workers, but it can also be a class six felony.

▢ Get a separate business bank account.

Co-mingling business funds with personal funds is bad business. Not only does it cause confusion as to what money you have, it also can expose you to personal liability if anything were to happen to your business. Setting up a separate bank account is not difficult and only requires your Federal Employer Identification Number and business name. If you do not have a separate legal entity for your business, then you just need your social security number and personal information.

▢ Set up an online presence.

Having an online presence, even for primarily referral based businesses, is key to making customers feel that you are a legitimate enterprise. Whether you decide to hire a third party to create your website, or you use a company like wix.com to create your own, it is important that your online presence portrays a clear idea of what service or product you offer and how the customer can engage with your business.

▢ Find a marketing/advertising company.

This can be a daunting task. There are so many different marketing and advertising companies all of which say they are the best at getting your search results ranked at the top of Google. If you engage a marketing group, the key is to define measurables and have clearly outlined objectives to reach those measurables.

▢ Establish your lines of communication.

Getting your email and phone set up may be very simple for small business owners. Usually because you will just use your existing phone or email. However, If you want to establish separate phone lines or emails, the process can be fairly simple, but requires a few minutes of your time.

▢ Protect your intangible assets.

Filing the appropriate copyrights or trademarks timely is critical so that someone else does not use, or worse steal, your brand (think of Apple or Google). If you have something that needs to be patented, this is even more important to have done early. In the early stages of a business, it is also critical to have Non-Disclosure Agreements signed by anyone contributing to the start of your business. This will protect your valuable intangible assets before you can get them properly protected under the law.

▢ Protect your other intangible assets.

Putting in place employment agreements and independent contractor agreements with the appropriate restrictive covenants is critical to not letting your other intangible assets (employees, customer lists, business processes, etc.) walk out the door. If you do not have contracts with employees and independent contractors outlining what you want to protect and the consequences for breaching those contracts, then be prepared to lose them.

▢ Create a company culture.

While it is difficult to think about your internal company culture at the start, take some time to think about how you want people within your company to act and treat each other. It is easier to start the right company culture than to correct a bad one later on. This is most typically outlined in an Employee Handbook. Here you will detail the expectations of employees and their compliance with appropriate rules and laws. You will also introduce your company slogan and make sure it is understood.

Contact Counxel Legal Firm

Doing all of these things will help you get your business off the ground and go in the right direction. If you need help with any of these items, then contact Counxel Legal Firm at 480-536-6122 or intake@wordpress-457010-3165254.cloudwaysapps.com.

This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact intake@wordpress-457010-3165254.cloudwaysapps.com or 480-536-6122 to request specific information for your situation.

*Conveniently located off the 101 Freeway and the US 60 in the middle of Phoenix, Scottsdale, Tempe, Chandler, Gilbert, Mesa, and Queen Creek!