The best time to start a business is 20 years ago. The second best time to start a business is now. While the pandemic may have turned a lot of things upside down, there's no better time than the present to start living out your dreams.
Many people feel emboldened by the goalsetting that comes with the changing of seasons, and going back to some level of normalcy after a year in lock-down. Maybe you've been relieved of your duties or maybe you've finally decided that it’s time to strike out on your own - to build your own business, to live your dream, and to work for yourself.
As we enter the last quarter of the year, now's a great time to plan ahead. Specifically, the first quarter of the year is a great time to start a business. New business owners will have a full year to operate and grow before they have to consider filing their income tax returns or an annual report. Furthermore, you can take advantage of a longer runway if you start earlier in the calendar year. When starting a business there are many things you may want to consider, which we can help you address.
Create a Plan Before You Start a New Business
With a few months left in 2021, now is a great time to turn your idea into a plan of action. You can do this by creating a business plan.
- Determine what your expected revenue for the first year will be.
- Determine what your operating cost will be.
- Determine how you will market your business gain customers earn their trust and keep them coming back.
A well-thought-out business plan is not only good for you to lay out your idea, but it is necessary for obtaining loans and financing. Whether you work with an institutional lender, or from shareholders, they'll want to see a business plan before giving you any money.
While the business plan itself is not necessarily a legal service, there are many items within the business plan which do require the advice of a good business attorney. Here are a few steps you may want to consider.
1. Establish Your Business Name when you start a new business
One of the first steps to start a new business is to register your business name. If you are unsure as to what names are available, we can help you determine what is available and whether or not your preferred name is too similar to other business names that are already on record.
Even if a name you want to use has been dissolved on the register, it does not mean that the North Carolina Secretary of State will automatically give you their name or consider it to be fully available. As such, we'll explore your options.
2. Determine the Structure of Your Business
In the process of establishing your business name, you will also need to consider what your business structure will be. When we refer to business structure, we mean whether the business will be treated as an LLC or a corporation. While there are many similar aspects between the two they are just as many differences.
An LLC is potentially easier to run but a corporation provides so many more options for its operation. In considering the structure, we like to determine how you intend to capitalize, or raise money for your company, and how you intend to pay yourself and your employees.
3. Limited Liability or Professional Corporation?
We also have to consider whether you need to be a professional limited liability company or a professional corporation. A professional limited liability or a professional corporation is one which is operated by a licensed professional and offers services to the public which are regulated by a licensing board.
The state of North Carolina does not issue a single business license for every single business that operates here. In fact, your particular business may be subject to state, city, county, and or federal regulations which may require you to get a business license.
4. Consider Taxation when you Start a New Business
While setting up the business, you should also consider some taxation situations. As attorneys we are not able to offer the same tax advice as a CPA might (and similarly a CPA cannot offer legal advice such as choice of structure, forming your company, filing your articles or filing your annual report). If your questions involve complex questions we may refer you to an accountant who we trust to assist with these decisions.
Once your company is formed, there are a few more items that you want to consider such as your obligation to any employees you may have and whether or not unemployment insurance and workers compensation insurance is required. These items are not required for every single entity but when you do reach a certain number of employees it does become necessary for you to purchase or workers compensation insurance policies.
