Starting a business is a thrilling, but stressful time. There is much more that goes into running a successful business than just a great product or transformative idea.

Thorough planning can go a long way in making the startup phase a smoother experience. Knowing where to start minimizes bumps in the road and possible liability for business owners down the line.

5 Point Checklist For Your Startup

Here are the top five working steps for starting a business:

1. Select An Entity & Formation

The first step for starting a business is to choose the type of business entity that makes the most sense for the business. Making appropriate filings in the states where the company wants to do business can be a quick process. However, consider the different options of entities beforehand, such as:

• Corporation
• Partnership
• Limited Liability Company (LLC)

Important topics to consider are tax classifications of entities and the expected funding sources for starting a business. LLC provides benefits to owners through pass-through taxation. Business owners should seek guidance from an experienced professional.

2. Set Up A Website

A crucial step for starting a business is to set up a website, which plays various roles in the company's business operations. There are several factors to consider when creating a website:

• Privacy Policy: It shows which data the website collects from its visitors and how the website will use that data.

• Color Scheme & Style: Founders need to think about the most appropriate message to send to consumers through the website's design.

• Terms & Conditions: The company's website should have well-drafted Terms & Conditions. It explains what uses of the website are authorized and what uses are not.
  

3. Create A Business Plan

Founders should consider everything from financial projections to corporate culture. The main points to consider are:

• In some cases, founders make some or all Directors or Board of Managers who have the authority to make operational decisions for the company. Other decisions might require the shareholders' vote. These are important things to consider when founders determine who will manage day-to-day operations and make decisions on behalf of the company.

• Owners should make important employment considerations. For instance, if they will only act as shareholders or will be employees themselves and whether the company will hire independent contractors or full-time employees.

4. Create A Brand Name Or Logo

Another major factor to contemplate when starting a business is the brand name and logo of the company. Business owners should consult an experienced IP attorney to review if their desired brand name:

• is at risk of infringement
• can afford trademark protection

Founders should want unique and new brand names. So, the brand names can be memorable to the company's target market and stand out.

5. Draft The Company's Corporate Documents

Founders should prioritize drafting and executing the company's corporate documents such as:

• Bylaws of a Corporation
• Shareholders' Agreement
• LLC Operating Agreement
• Employee Handbook
• Contracts

These agreements describe how the company is going to run, who has the authority to do specific actions, and how profits and losses would be disbursed to the company's owners. Owners must ensure to keep an accurate and up-to-date cap table. The cap table represents membership interests or securities in the company, who owns what amounts, and how much cash or services several owners have contributed.

The Bottom Line

By starting with the basics, along with the guidance of an experienced corporate attorney, you can be sure that you're starting a business the right way. This action works to provide protection and value in the future.

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