Avoid These 5 Critical Mistakes When Starting a Small Business
It’s a staggering fact that 20% of new businesses will fail in their first year. And half will not make it to the five year point. Starting a new small business can be challenging and is often overwhelming. But the best way to ensure success is to be prepared right from the start. Don’t jump into anything without doing your homework first – and avoid these common mistakes at all costs.
Not Spending Enough Time Planning
You can never be too prepared when launching a small business. Take the time during the important planning phase to develop a strong business plan, including a detailed financial plan for the business and an effective marketing strategy. Thoroughly research who your ideal customer is, and examine the market in order ensure that your product or service is priced appropriately. You will likely need this information in order to obtain a small business loan, and it will give you a solid foundation on which to grow the company.
Not Hiring an Experienced Small Business Attorney
From beginning to end, there will be legal issues to contend with, documents to prepare and submit, licenses to apply for, and employment matters to understand. Making a mistake at any time can wind up costing your business unnecessary fees or fines, or much more if a lawsuit is filed against the company. Churchill, Quinn, Richtman & Hamilton, Ltd can be a valuable resource for any legal challenges your business may face.
Choosing the Wrong Type of Business Ownership
Don’t be hasty in your decision of how to classify your small business. You can choose from sole proprietorship, partnership, limited partnership, limited liability company (LLC), corporation (for-profit), non-profit corporation, or cooperative. Selecting the correct entity structure is crucial to the success of your organization. Our attorneys have in-depth experience in business formation and can help you determine the best option for your small business.
Not Investing in Marketing
It’s wise to spend cautiously, especially in the start-up phase, but there are some things that require an investment in order to help your business grow. Many new businesses believe word-of-mouth advertising will be enough. Chances are – it will not be. With competition from brick and mortar businesses, as well as seemingly unlimited online outlets, letting potential customers know about your business and setting yourself apart from the rest is important to survive.
Not Putting Agreements in Writing
Written contracts are extremely important, as they eliminate any possible misunderstandings that could lead to a lawsuit against your company. Always insist on written agreements before providing a product or service or before entering into a partnership. Our experienced attorneys can help create appropriate contracts for these situations, as well as non-disclosure agreements, non-compete agreements or general employment contracts.
Churchill, Quinn, Richtman & Hamilton, Ltd is highly proficient in business law and we are committed to helping our clients achieve the highest levels of success. Contact us at 847-223-1500 to learn more or to schedule an appointment.