You might also be considering having a business partner. If you are going into business with a partner, even with a friend or family member, it is crucial to document their roles, rights and responsibilities at the outset of the relationship in either a carefully written operating agreement for an LLC or a shareholder agreement for a corporation. If problems with a partner arise down the road, such documents can help provide a roadmap for resolving disputes or terms for a partner’s exit. Too often, business owners neglect to enter into these types of agreements at the outset of the relationship or use form documents online that very often do not reflect the realities of their business and partner arrangements.
Finally, you may be considering renting a physical location for your business. In negotiating a lease, some of the paramount considerations are: a) the rental structure and whether the rent is fixed or fluctuates based on expenses such as the landlord’s common area maintenance, taxes or insurance costs; b) the extent of your maintenance obligations as a tenant; and c) whether there is a personal guarantee by you individually for the business’s rental payments or obligations under the lease. It is always wise to have an attorney review a lease before signing it to help you understand your obligations as a tenant and negotiate items that are material to you.
This is not an exhaustive list of considerations but some items new business owners often overlook. With careful planning during your business setup and through enlisting the help of professionals such as attorneys and accountants, you can help minimize common pitfalls and ensure the success of your new business venture.