Top 8 Tasks for Business Startups

Launching a new business can be overwhelming. There are many critical actions to take during the initial phases of this process that will have a significant impact on the success of your new venture. Without the proper guidance, you run the risk of overlooking an important and essential task. For this reason, you should always work with an experienced startup business lawyer who can help you navigate this challenging and complex process.

While there may be additional tasks and actions required based on your specific situation, the following list will give you a good starting point for the action items you need to take when launching a new business. Elizabeth Lewis has been providing legal guidance to startup businesses since 2007, and she can help ensure you make the right decisions to set your new company up for success.

Create a Business Plan

Creating a business plan is one of the most critical initial steps for a startup business. It will help you clarify your goals and provide a roadmap for building your new company. In addition, a well-formulated business plan is essential if you plan on applying for a business loan or seeking money from investors. It’s unlikely any investor will even consider your request without a business plan to review.

Make sure your business plan includes the following components:

Executive Summary – This is an outline of everything contained within your business plan.
Business Description – This should include your industry, the company structure, any relevant background information, your value proposition, and your short-and long-term business goals.
Market Analysis – This analysis should assess your new company’s position in relation to your target customers, primary competitors and industry trends.
Product/Service Description – Provide an overview of the products or services you intend to provide to your customers.
Financial Projections – This should include your profit goals, pricing and sales strategy, and investor information.
Operational Overview – This overview details the logistics, production and distribution plans for your business.

Determine Your Startup Costs

Before you can seek funding, you will need to estimate your startup costs, as well as when you project your new business to start making a profit. Startup costs typically fall into the following categories:

One-Time Costs – These costs are required when you set up your business, but will not occur again. They include lease deposits, state business registration fees, and any one-time equipment costs necessary to run your business.
Labor Costs – Always include your salary in addition to the wages for any employees you’ll hire.
Overhead Costs – This includes monthly expenses such as rent, utilities, production costs, taxes and any equipment that must be purchased regularly.

Secure Your Funding

While it’s likely that a portion of your startup capital will come from your savings and existing assets, most businesses will require additional funding to get off the ground. It’s always best to secure all necessary funding for your startup costs before spending money. If you can’t fund your startup costs on your own, the following options can help you obtain the money you need:

Small business loans from a local bank
Third-party investors
Crowdfunding campaigns

Choose a Business Structure

Before launching your company, you’ll need to choose a business structure. The structure you choose will have legal and tax implications for your business once you begin operating. There are four types of business structures, and the right option for you will depend on the specifics of your new business:

Sole Proprietorship – This is the simplest business structure, but it makes no distinction between the business and the owner. This structure entitles you to all profits, but also makes you personally responsible for all debts, liabilities and losses associated with the business.
Partnership – This structure is similar to a sole proprietorship, but it is used when there is more than one owner. The co-owners will create a partnership agreement that details how legal obligations, financial obligations and profits will be split.
Limited Liability Company (LLC) – Owners of an LLC work as a “member” of the company. This structure protects your personal assets from financial liability in most cases, but it is important that it is setup correctly to ensure limited liability.
Corporations – A corporation makes your business a legal entity that is separate from its owners and as a result, provides the strongest level of protection against personal liability. This structure may be an ideal option if you’re seeking outside investors or plan to take your company public in the future.

Choose Your Business Name

Choosing the right name can often play a significant role in the success of your company. A catchy name can help attract customers and investors, and it can also provide a point of differentiation with your competitors.

If you plan on trademarking your business name, you’ll need to do some research to make sure the name hasn’t already been trademarked by someone else. You can use the US Patent and Trademark Office’s Trademark Electronic Search System (TESS) to see if your desired name has already been trademarked.

Register Your Business

You’ll need to register your business with the IRS and obtain an Employer Identification Number (EIN). Your EIN will be used for tax purposes, as well as whenever you apply for business licenses, open a bank account and hire employees.

In addition, you may also need to register your business with your state government. You should also contact your local government office to determine whether any other registrations or permits are required to do business in your local area.

Obtain Licenses and Permits

The State of Colorado doesn’t require generic general business licenses for most businesses. However, depending on the specifics of your new business, you may need to secure certain licenses or permits to be allowed to operate legally, especially with your local jurisdiction. These licenses and permits vary by industry, and it’s best to consult with your startup business attorney to ensure you comply with all regulations that apply to your new business.

If you sell physical products, you will also need to obtain a sales tax permit with your state.

Get Insurance for Your Business

Before opening your business, you will need to make sure it is properly insured. All businesses should have general liability insurance, which covers you in the event someone suffers an injury on your property or due to the activities of your business. Depending on the nature of your business, you may also need to purchase one or more of the following types of insurance policies:

Workers’ Compensation – This covers all medical expenses and lost wages for any employees who get injured on the job.
Professional Liability – This covers you in the event that you make an error or omission that costs your clients money.
Property Insurance – This covers any loss or damage to physical property, including your company equipment or commercial real estate space.
Business Interruption Insurance – This covers any lost revenue suffered if your business must temporarily close down after a natural disaster or other unforeseen event.

Elizabeth Lewis Can Help

Getting the right legal advice on how to set up your new business is critical to your long-term success. It will help you lay the foundation for a well-run organization that has the ability to grow and scale over time. At the Law Office of E.C. Lewis, we can provide the guidance you need during this important formative stage of your new business.

Elizabeth Lewis has helped a wide range of small businesses in Denver and throughout Colorado navigate the requirements of business formation. She understands the complex legal requirements associated with starting a business, and her expertise will provide you with the important protections you need as you launch your new venture.

Please contact us today to schedule a consultation. Elizabeth Lewis is a small business attorney serving Denver and all of Colorado.