In times of change, like the one we are currently experiencing, entrepreneurs have a chance to thrive. Many new ventures fail (if perpetuity and incredible wealth are the standards for success). Some businesses, by their nature, will not last forever, and that does not define the business as unsuccessful. Nevertheless, for companies that “succeed”, disproportionate rewards can be expected.
Many businesses start as a hobby or “side hustles.” Sometimes the new “business” remains a job that the business owner maintains independent of a more permanent full-time job. Other times, the new business may grow to such an extent that the business owner may try to make it their new permanent full-time job.
Regardless of where a new business may be in its infancy, there are several steps every entrepreneur must take as that new business grows.
First, every business owner should have a close relationship with the business insurance agent. Every activity we undertake in this world can give rise to liability and present the possibility of someone suing the business or the owner of the business. Obviously, not all lawsuits will be successful, but the best part of good insurance is that the insurance company will pay the legal fees to defend the business or business owner.
Second, make sure the business has the required government licenses and permits. Businesses may need vendor, food service, solicitation, concession, and various other professional and other licenses that are necessary for the business to do what it does. Suffice it to say that if a company is making even decent money, chances are the service/product area of the company is overseen by some government authority that requires a license to at least identify those who are in that certain field of service or manufacture.
Lawyers can help identify the licenses a business needs, but often proper Google searches (using legitimate government websites) can provide initial guidance to business owners regarding the licenses needed for a business. a company does what it does or intends to do.
Third, discuss taxation with an accountant. Businesses may be subject to certain taxes not applicable to individuals. Conversely, companies can sometimes be uniquely qualified to use certain tax benefits. The accountant the company works with should be more than a tax preparer. A proper business needs an accountant who does tax planning and advice.
Fourth, get organized. Most entrepreneurs cannot afford a professional business manager. The business owner must therefore himself find a way to manage the various aspects of the business in an organized manner. Almost every business should buy and use accounting software like QuickBooks or NetSuite. The free software that comes with the purchase of a computer or tablet is insufficient for most businesses.
Finally, if the business presents a potential risk of an incredibly large scale (possibility of a potentially devastating crisis), the business owner should consider creating an entity such as an LLC.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agricultural matters in Northwest Ohio. He can be reached at [email protected] or 419-659-2058. This article is not intended to be used as legal advice, and specific advice should be sought from the licensed attorney of your choice based on the specific facts and circumstances facing you.