Last week, we discussed how with unemployment numbers rising, that many people are considering starting their own small businesses in 2021. And, it makes sense. If you're having trouble finding solid employment, why not start your own business, especially if you're highly skilled within a specific trade. However, we find that when small businesses are started out of an urgent need rather than a well-designed strategy, that some small business entrepreneurs may try to cut incredibly important start-up costs to maximize their net profit. Today we'll discuss four more of the most expensive small business mistakes to avoid in 2021.
Expensive Small Business Mistake #5: Being Naive
Very few first-time small business owners know everything they need to know about starting a business. And while ignorance is bliss for a number of situations, being naive to think that "what you don't know can't hurt you" can cost you greatly.
Rather than spending countless hours learning everything you need to know about starting a small business, we suggest hiring a small business attorney who can work with you to get your business off on the right foot from the very beginning. Our small business attorneys in Raleigh can teach you how to document agreements correctly, advise you on what insurance to purchase, and help you understand which tax rules to follow.
Expensive Small Business Mistake #6: Not Ensuring Intellectual Property
To piggy-back on the previous point, a brand new small business may naively create intellectual property in the way of logos, branding, or a website so they can start marketing their products and/or services without giving much thought to ensuring the content they've created. Unfortunately, not ensuring your intellectual property can become a costly mistake. Your small business lawyer in Raleigh can help you determine what is considered intellectual property within your business (trademarks, patents, copyrights, database rights, logos, designs, etc), how to protect it, as well as how to maximize your intellectual property's value.
Expensive Small Business Mistake #7: Not Having a Will or Trust
We recently wrote 5 Reasons You Should Create an Estate Plan in 2021. Not only do these lessons apply to individuals, but they also apply to small business owners. While no one wants to think about their own mortality, entrepreneurs should think about what will happen to their business in the event that they become incapacitated or die.
While we strongly advise our clients to create a comprehensive estate plan that would document how a business will be managed should the owner pass away (along with a number of other details), we recognize that creating an estate plan while also trying to start up your company may be a lot to tackle at once. As such, we recommend that small business owners have a will or trust, financial power of attorney, health care proxy, and succession plan in place just in case.
We also strongly advise against creating any of these documents on your own as the chances of them being executed properly are very slim. Your small business attorney is much better equipped to walk you through the steps to correctly manage these documents.
Expensive Small Business Mistake #8: Trying to Do It Alone
Much like raising a family, managing a successful small business takes a village. As such, one of the most expensive small business mistakes you can make is to try to do it all rather than hire professionals to help you. That team of professionals should include a bookkeeper or CPA (certified public accountant) to keep track of your revenue and expenses, as well as advise you on how to manage your taxes. That team should also include a financial advisor who can help you grow your business, and a relationship with a local bank so that you can have a line of credit available if you need it. Finally, that team of professionals should include a small business attorney. Not only will a good lawyer help you get your business off the ground, but they can help guide you in the event that you face any legal challenges in the future.
Contact our law office at any point if you have questions regarding incorporation, partnership agreements, forming a business or other legal inquiries. Our small business lawyer in Raleigh is here to help you from the beginning stages of your new business.
