3 Legal To Dos Before Starting Your Business
There’s a lot of noise out there about what you need to do legally when starting your business. The lists range from 5 to 15 items long.
But here’s the thing: when you’re first starting a business, you’re really testing an idea to see if it gets any traction. And the reality is that you might have to test that idea in many different ways before you find a market fit.
You might have to tweak the idea or pivot it into something else entirely before things really start to take off for you.
If you’re lucky, things will take off in 6 months to a year. But if you’re normal, things might take a couple of years to get off the ground.
So that list of legal things the experts say you just “have” to do when you start a business tends to be pretty unrealistic and overly complicated in my opinion.
Here’s my simplified list of legal To-Dos for starting a business.
Got a clever business name? Then DO check to see if that name’s available. Do a domain search and grab the domain if it’s available. Then DO a web search to see if other businesses use that name. If the business is in another country, worry less. If it’s in your country but not in your local community/region, make a note to revisit the issue when you’ve found a market fit. Consider brainstorming a different name if they have a presence in your country and your local community or region.
DO make your business official by registering it as a formal entity. The easiest registration option is an LLC in the state where you live. If you don’t have a business name, you can use your name as the name of the business entity. You can always change it down the road. You can complete the registration online in a few minutes, and LLCs have very minimal filing requirements. LLCs are also the easiest entity formation to change down the road. Registering your business allows you to get a tax identification number, which you’ll need to open your business bank account.
DO figure out what kinds of contracts you’ll need to run your business. If you’re selling a product, you’ll need Terms and Conditions for the sale. If you’re offering a service, you’ll need some kind of service agreement with a fee structure, statement of work, and appropriate warranty and liability provisions. If you think you’ll need help from other people, you’ll need an independent contractor agreement. Once you know what kinds of contracts you’ll need, you can create templates for each type of contract so you have them ready. If you need someone to review them and make sure you have your basics covered, you can use my contract review service.
Once you’ve got these 3 things complete, you’re ready to start testing your idea in the market.
Congratulations, you’re officially a business owner and entrepreneur.