Small Business Startup Tips... You May Have Missed
A small business startup can be overwhelming. So much so that many people choose not to and many of us who do start small businesses often miss a piece of the small business puzzle.
In this episode, I’m going to share three things you need to do when you’re starting your business that might not be on your list… yet!
Let’s get… started!
You’ll find highlights below. Watch the livestream recording or listen to the podcast version on your favorite podcatcher for all the details!
Listen to or Download the Audio Podcast
Small Business Startup Tips | Show Notes
Starting With the Basics
When you get the bug to do a small business startup the challenge may seem overwhelming and if it doesn’t… you’re probably missing something. Let’s face it there’s a lot to do.
Some of these things are easy to find:
- Who’s your ideal customer?
- What product or service are you going to sell?
- How are you going to finance the business?
- What does your product development process look like?
I want to give you three important but less often talked about actions you need to take when starting a business.
Three Less Common Small Business Startup Actions
- Establish a Separate Legal Entity
- Get the Right Insurance
- Separate your money
Establishing a Separate Legal Entity
One of the first things you’ll want to do before you start selling products, signing contracts, or hiring employees is to create an independent legal entity. Properly done, this provides you, as an individual, protection against liability for issues related to the operation of the business.
You may find articles or posts around the web that suggest that it’s ‘okay’ to operate as an individual but this is not a best practice and puts you at risk of legal and financial liability on behalf of your company.
Another reason that a separate legal entity can be helpful is to help ensure your taxes are properly reported and that you aren’t overpaying or underpaying.
Finally, some corporate structures require the use of a separate legal entity and your business attorney can help you ensure these requirements are met.
I’m not a lawyer so make sure and connect with an attorney that understands business law in your area to get this done right.
Getting the Right Insurance
It’s probably not the first thing you thought of when you decided on a small business startup, but having the right insurance(s) in place will give you peace of mind and protect your business in the event of a product liability concern or difficult situation.
There are a number of types of insurance you should consider discussing with your agent.
- General Liability
- Worker’s Compensation
- Home and Auto Riders (If you work from home or use your personal vehicle for work)
- Property Insurance
- Business Interruption
- Bodily Injury
You may need to discuss different insurance products with different agents and companies as each business and situation is different.
The key is to ensure you have the proper insurance prior to shipping products, delivering services, hiring employees, or entering into contracts.
Separate Your Money
If you’ve listened to Up and to the Right before you’ve probably already heard me talk about this. In order to really understand how your business is doing you must make sure that your personal and business finances are separated.
- Where is your money going?
- Who are your best customers?
- Where are you wasting money?
- What are your best margin products?
- Are you profitable?
- Are you cash positive?
I know it can be unsettling to dig into these things but we can only fix what we can see.
Practical Action
- Establish a separate legal entity - find a lawyer you trust to help - this is no time for doing it yourself.
- Call your insurance agent and verify that you have the insurance required for your business situation, product mix, and operations.
- Open a free business checking account and get started separating your finances.
Additional Resources
Don't just take my word for it...
https://www.thebalancesmb.com/how-to-and-why-you-should-establish-a-separate-entity-4582770
https://www.sba.gov/business-guide/launch-your-business/get-business-insurance
https://www.fundera.com/blog/separate-business-and-personal-finances
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