Of all the considerations an entrepreneur has to make when starting a business—what to name it, how to price the products and more—the legal considerations are perhaps the most important. From determining a business structure, to complying with local labor laws, to ensuring you prepare for and properly file your taxes, forgetting to account for any of these aspects could lead to disastrous legal consequences down the line—ones that may be impossible to recover from.
To ensure you don’t make any legal missteps as you begin your entrepreneurial journey, consider the advice of those who have experience dealing with the legalities of starting a business. Here, 10 members of Young Entrepreneur Council outline some of the most important legal considerations to make when starting a business and why handling these tasks should be at the top of your to-do list.
1. Accurate Tax Filing And Documentation
Ensure accurate tax filing and documentation from the very first year. Missteps in this area can lead to significant penalties, audits or even legal actions in the future. Also, early mistakes can snowball over time, making them more difficult and costly to correct later. Investing in a competent accountant or tax professional from the outset can be a wise decision to prevent such potential issues. - Yury Sokolov, Finazon
2. Registration For Data Protection And Privacy Compliance
For immigrant founders, it's really important to have the right immigration status when starting your business and to own the company IP. Some founders register their company in the U.S. for sales primarily and then have their development offshore to protect IP rights to the software. If you are building a data-centric organization, take the legal considerations one step beyond to prioritize registering for data protection and privacy compliance. Validate your customer and product usage data rights and make sure your business is registered in a country or state where you can outline ownership of data as part of your terms of service. - Surbhi Rathore, Symbl.ai
3. Clear, Detailed Contracts And Agreements
When you start a business, it's really important to create clear and detailed contracts and agreements. These are legal documents that explain the rights and responsibilities of everyone involved in the business. Having good contracts helps prevent disagreements and protects everyone's interests. It also shows that your business is trustworthy and professional. Contracts make sure you follow the law as well as help you run your business smoothly. It's a good idea to get help from a lawyer to help customize the contracts to fit your needs and review them regularly. By focusing on clear and comprehensive contracts, founders can keep their businesses safe and build good relationships with customers, partners and all others involved. - Kazi Mamun, CANSOFT
4. Your Business's Legal Structure
The first legal consideration that founders need to consider when starting a business is the entity’s legal structure. Depending on your business type, desired operations and long-term vision, you’ll need to decide on whether you want to start an LLC, S corporation, C corporation or nonprofit organization. Not only does this decision impact things like taxation and investors, but it also affects your liability as an owner and founder. Always start by limiting your personal liability from the company’s liability. From there, you can worry about obtaining legal counsel, securing appropriate licenses and maintaining the right insurance. But protecting your personal liability must always be the first step. - Ian Blair, BuildFire
5. Proper Insurance Coverage
When embarking on an entrepreneurial journey, new founders must prioritize obtaining appropriate insurance coverage for their businesses. Starting a business involves risks, both known and unknown. Insurance acts as a safety net, protecting you from potential financial losses that may arise from unexpected events or liabilities. By securing the right insurance coverage, you mitigate risks and gain peace of mind. A few reasons why insurance should be high on the priority list includes liability protection, property protection, business interruption and professional liabilities. It demonstrates your commitment to responsible and prudent business practices, instilling confidence in stakeholders and potential partners. - Abhijeet Kaldate, Astra WordPress Theme
6. Employment And Labor Laws
Employment and labor laws are absolutely essential considerations for every founder to take care of. You need to protect the interests of all parties involved—your business, yourself, your employees and other stakeholders. You have to understand the classification of employees, overtime pay and more. You also have to follow fair practices, ensure there's no discrimination and protect your and your employees’ intellectual properties and contributions. Make sure that you hire the right people to help you comply with labor requirements right from the start to avoid problems down the line. - Syed Balkhi, WPBeginner
7. Intellectual Property Protection
One critical legal consideration that new founders need to prioritize is protecting their intellectual property (IP). This includes trademarks, copyrights and patents. Safeguarding IP assets is crucial for establishing a competitive advantage, preventing others from using or copying your unique ideas, products or brand identity, and maintaining the value of your business. It is advisable to consult with an intellectual property attorney to identify and protect your IP assets through proper registrations, contracts and confidentiality agreements. - Ismael Wrixen, FE International
8. IP Or Patent Violations
When starting a business, it's important for founders to be wary of intellectual property and patent laws and to make sure they don't violate any. Intellectual property laws may apply to even the most basic of things that aspiring entrepreneurs are either unaware of or fail to consider, such as the name of the business, the company's logo, item design, content and so on. Violating these laws would not only lead to the demise of a business before it has even started, but it could also cause the founders to face severe penalties that would haunt them for quite a long time. Research is the key to avoiding such legal complications and helps new founders kick-start their businesses successfully. - Stephanie Wells, Formidable Forms
9. Proper Industry Licensing
One of the most important things to do is get proper licenses for the industry you're in. This is especially critical because having the right licenses ensures that your business operates legally and doesn't risk being shut down by authorities. Plus, the added benefit is that you appear legitimate and more trustworthy to your audience and customers. You can show that you comply with industry regulations and build a positive reputation, attracting more customers—something that is essential for success. - Blair Williams, MemberPress
10. Former Non-Compete Agreements
Consider if you still fall under any previous non-competes. Many entrepreneurs are inspired to start their businesses based on their past experiences; however, issues can arise if you are in breach of any non-compete agreements you signed in the past. Think hard about whether or not your new business directly competes with a previous employer. Review the contracts you've executed to determine the exact prohibitions and their expiration dates. When in doubt, seek legal advice or start a different business instead. You don't want to burden yourself or your business early on with such an avoidable issue. - Firas Kittaneh, Amerisleep Mattress
Diversifying your projects and upskilling rather than upscaling are two tried and true methods to get through these hard times.
The future is uncertain. Inflation is surging, a recession seems inevitable, and war continues to rage. But in Libya, this situation isn't new. A struggling economy and unpredictable external circumstances? That's the norm for us.
Businesses, especially the tech industry, are doing mass layoffs, rescinding job offers, you name it. If your business is going through a bit of a lull, here are a couple of tips on what to try to get over the hump.
1. Diversify the projects you have on the go
When I returned to Libya in 2017 after living in the West for several years, I came home and saw many issues. They were things that wouldn't have been a problem in a place like San Francisco — getting a passport, for instance — a non-issue in the West and a non-starter in Libya. There was an overwhelming lack of modern infrastructure.
I saw these issues as problems that I could help solve, though. I just had to figure out which one to pursue first. Eventually, I landed on a project, but that didn't stop me from compiling a list of ideas for further down the line. With each idea I came up with, I would also register a domain name so that when the time arrived, I'd have what I needed to do the job.
Founders tend to avoid diversifying their projects because they don't have the resources — financial or human. But that doesn't mean that lulls don't hit. You need to be prepared to pivot when necessary — that means you're always able to provide value.
Diversifying isn't about trying to have a finger in every pot – it's more like nesting dolls really. You have to make an informed selection about which projects fit neatly with one another and make sense to work together.
Recently things have slowed down with our current project. Rather than sit around twiddling my thumbs, I returned to my old list of ideas and looked to see if there was any room to diversify my current projects. There were plenty – in fact, I had to once again make a careful decision about which angle I wanted to pursue.
The digital addressing system we'd created highlighted the overwhelming need for digitization in other realms. We had the tools and the people at our disposal to try digitizing the new frontier — digitizing the archives of private and government entities. Any time you diversify, you're taking a risk — but taking risks can pay off in big ways — trust your gut.
2. Upskilling not upscaling
With the markets as unstable as they are it might not be the right time to scale up your business. But there's virtually no bad time to upskill your workforce.
The phrase, "You are who you surround yourself with," is even more true when it comes to business. As a leader, who you have on your team is absolutely crucial. Your employees are the people that you're choosing to help execute your vision; they're the people who share their big ideas with you. Ensuring you have a highly skilled workforce isn't just beneficial to your company but also keeps your staff happy.
One of the biggest reasons employees leave their jobs is a lack of growth or learning. By offering workshops and courses to your staff, you are investing in your employees and creating highly skilled workers and giving them a sense of purpose and helping them grow. Making these kinds of learning seminars beneficial on two counts — a highly skilled workforce; and better employee retention.
When we first entered this slow period, I could see my team was bored. They were feeling scattered and aimless. Since we had more time, I decided now would be the perfect opportunity to offer English lessons. And the program flopped… I had wanted everyone in the company to be fluent in English so badly that I didn't notice that some team members weren't interested in learning the language or didn't even see its value.
So, I met with all of the department heads and asked them what kinds of skills and courses they thought would be most valuable to each team. They had a whole bunch of ideas that uniquely fit within each area of the company – email skills, working as a part of a team, and yes, English. By focusing on the unique needs of particular subgroups within the company, we could offer courses that provided real value to our employees and empowered them within the workplace and outside of it too.
When you invest in your team, you mold them into better workers and create passionate, intelligent individuals who believe in your vision. There's no tradeoff.
Image Credit: Pexels.com | Photo by Kampus Production
In this article, we delve into bold, assertive self-confidence and its crucial role in fostering success in life and business.
Bold, assertive self-confidence can be conceptualized as an unshakable faith in one's abilities, skills and competence. It's a firm conviction in one's potential to navigate obstacles, achieve set objectives and make informed decisions. More than simple self-assurance, bold, assertive self-confidence involves proactive action based on your deeply held beliefs, instilling a sense of agency and control over your life's trajectory.
This dynamic construct plays a pivotal role in pursuing personal and professional success. Bold, assertive self-confidence shapes how we perceive and react to challenges, transforming potential roadblocks into opportunities for growth and learning. It enables us to take calculated risks, fosters resilience and promotes a growth mindset. When cultivated and harnessed, assertive self-confidence acts as an internal compass, guiding us toward our goals and visions, even amidst uncertainty and change. It's the fuel that powers our journey, empowering us to envision success and actualize it. Hence, assertive self-confidence is not merely an attribute; it's a catalyst that propels us toward our desired future.
The power and impact of bold, assertive self-confidence
There are substantial positive outcomes to be gained when the belief in yourself is aligned with the effort required to achieve your goals. You must be willing to do the work. Below are five key measures of the power of bold, assertive self-confidence:
Cultivating bold, assertive self-confidence: Practical strategies for implementation
In essence, assertive self-confidence is the key to unlocking our potential and achieving lasting success in our lives and businesses. Only by believing in ourselves can we develop the courage and resilience to face any challenge with assurance and grace. As entrepreneurs, we must take the initiative to foster a culture of trust and optimism in our organizations.
When we all work together to create and sustain healthy, positive beliefs — through self-compassion, positive self-talk, goal setting, learning and visualizing success — our collective journey will be filled with meaning and accomplishments. With unshakable trust in ourselves comes an abundance of strength that drives us forward while keeping us grounded. So, let's dare to dream big; it's time to let bold, assertive self-confidence lead the way!
Image Credit: Pexels.com | Photo by eberhard grossgasteiger
Truly loving your business and thriving off of what you do is the single most valuable key to business success.
Starting a business, let alone growing one, is not for the faint of heart. It takes time, patience and a lot of humility. In 10 years of owning my own business, our growing pains have had their own growing pains, but at this point, I can safely say they have transformed into gains.
I've learned the hard way that expansion is a necessary step in growth, but doing so in a manner that doesn't feel like two steps back for every one step forward has been the most challenging part for me. Growth should be an exciting process that couples a thoughtful approach with some creative bootstrapping and an unwavering "go get 'em" attitude.
Sometimes growth proceeds only one slow step at a time, but that one step may be critical to the future of your business, so dedicate yourself to making each advancement as "right" as it can be, followed by another and then another. This will likely take some fine-tuning and adjusting. You couldn't learn the ropes of first grade until you'd mastered kindergarten (yes, as a mom of five, parenting analogies consistently make their way into my writing!), and the same philosophy applies to business.
Here's how to identify focused steps to take to grow your business.
1. Careful planning and strategic decision-making
The importance of careful planning and strategic decision-making cannot be overestimated but is often overlooked when you're running full steam ahead toward business growth. The last thing business owners need is wasted time on unnecessary work that could've easily been avoided with a little thoughtful preparation. Speaking from my own experience at the helm of R Public Relations, I decided to embrace one instrumental but utterly simple expansion strategy: finding my firm's service niche area and sticking with it.
The truth is, my firm and my team can do more than we actually do, but we had to start saying no to services we didn't really want to focus on so that business growth would be in the right direction. Mine is a PR company, and yet at one point, I had more content writers and editors on staff than publicists. So I had to shift that imbalance, stay hyper-focused on our service niche and then use that very service to promote ourselves, brag about ourselves and show our potential clients how good we are at shouting the good news from the rooftops.
2. Finding your client base
Just like I had to narrow my circle of employees and contractors to those who would most directly contribute to business growth goals, I had to zero in on the client base I wanted to feed my business by offering products and services that would most appeal to them. This step involves understanding your customers' needs and wants — both current and future — and conducting market research to determine them. You don't have to have a degree in data analysis; you just need to be a good listener when speaking to your clients. If you ask and show genuine interest, they'll tell you exactly what they want from you that will keep them on your roster and, in turn, keep your business growing.
3. Setting pricing and service offerings
I'm frequently asked, "How much should I charge for so-and-so?" You can't stay in business if you don't get paid appropriately for what you deliver, but just expanding your menu of offerings to bring in more revenue isn't always (or even usually) the best route to growth. Diversification and specialization can make all the difference, so when you're reassessing your service line, make tweaks where needed and, in some cases, eliminate some services altogether.
In my firm's case, we took inventory of all the feedback we received from our clients, and guess what we found out? We were providing not only more than they were asking for but much more than they were paying for! Not good.
When we raised our prices to keep in line with costs, client demands rose in kind. I ended up with a burnt-out staff and clients with unclear expectations until I eventually realized that the trick was to scale back on extraneous services without disrupting client satisfaction. In other words, we stopped overdelivering and instead set definite and finite targets that could track both client growth and our own. We defined and set a value for our services so that we could price them properly and better manage client expectations.
4. Understanding your market landscape
This step could just as easily be labeled "stalking your competitors," and there's no shame in that. In fact, you can learn a lot from scoping out what the competition is doing and then figuring out ways to do it better or differently or with more personalization. When I was just starting out in the hospitality market, there was a "cool kid" on campus, and we wanted to be cooler. So we'd pitch to the same clients and often win — maybe based on price or our extreme commitment or a combination of both; but the point is, we learned how and what to pitch precisely by following the lead of our competition and then putting our spin on their moves.
Continually assessing where you can stand out in your market and how you can actualize your exceptionality keeps your current clients from jumping ship and attracts new clients to the buzz you've created around yourself. And you can achieve this with a small team and a small budget. When I had limited amounts of both, I prioritized deepening my relationships with my clients through active listening and customization. In the process, I gained valuable insights into market preferences that allowed my firm to tailor strategies to current market trends, strengthen existing client bonds and foster new ones.
5. Being passionate about what you do
Clichéd as it sounds, truly loving your business — thriving off what you do — is the single most valuable key to business success. Clients want to work with you when you're enthusiastic, energized and fun. When your passion for what you do is visible, it becomes a viable path to growth because people want to join you on that path, follow you on that path and share in the rewards that come from an enjoyable journey to a set destination.
I'll keep walking that path, recruiting fellow travelers wherever and whenever I can, because we're all aiming for the same thing: successful, blossoming businesses that stand the test of time and evolve with an ever-evolving marketplace.
Image Credit: Pexels.com | Photo by Yan Krukau
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