2016 is a year full of ambitions, resolutions and #SideHustles. Being an entrepreneur can be incredibly satisfying and exciting, but that doesn't mean it's a walk in the park.
Between creating a business plan, developing products and services, and securing investors, small-business owners have their plates full. When thinking about starting your side business, you should also make some time to sit down with a small-business attorney. Talking to someone before you start your business can answer questions, help you with any obstacles you see in your path and really help you understand the risks of starting your small business and how to handle them.
If you've been thinking about starting your own side hustle, you probably have a few questions in mind. In case you don't, here are seven questions to ask your attorney before starting on your small-business adventure:
- What Kind of Structure Should My Business Have?
You need to decide what kind of structure your business will have before you start it. It's tempting to roll with the punches where structure is concerned, but the reality is that without an idea of a structure, your business could get out of hand quickly.
It's important to know that if you don't establish your business as a formal entity, you and your company will legally be the same person, in the form of a sole proprietorship - only you own it - or general partnership - you're one of the owners. That means that should anything happen to put you in debt, or if you get sued, you'll be personally responsible for the consequences.
Startups are traditionally structured in one of a few ways:
- Limited liability company (LLC)
- Limited liability partnership (LLP)
- Corporation
- Limited partnership
- Nonprofit corporation
Consult your lawyer and carefully evaluate your options. The one you choose will determine how your company is taxed, managed and owned.
- What Do I Need to Know About Naming My Company?
Your company's name is its reputation. It's important to protect it. First, however, you have to know what goes into naming your company.
Of course, you shouldn't use a name that another business is using. Even if your state doesn't have a law against it, you want to be unique, right? Each state has its own rules about the names of new business entities, and you should be careful not to step on another business's toes when naming yours.
Once you've chosen a name, you may want to trademark it. Your attorney can help you register trademarks for everything from your name and logo to distinguishing colors and fonts. They'll also be a good resource should any trademark infringement issues come up.
- How Do I Make My Business an Attractive Employer?
Employees can make or break your small business. You need to make sure that you hire the right people, and that you provide a good environment to not only attract them, but also keep them.
Work with your attorney before you hire the team to implement best practices. Define company HR policy and create training materials and onboarding procedures. Figure out what kind of employees you need and create the right paperwork for all HR needs.
You also need to comply with federal laws, ranging from equal opportunity employment to safety regulations and minimum wage requirements. Your attorney will help you figure out all of these aspects, and will get you one step closer to retaining your ideal team.
- How Do I Protect My Intellectual Property?
When you develop something that makes you unique from other businesses in your industry, you want to protect those things with trademarks, copyrights and patents, all of which a lawyer will be great help with.
Your name, logo, taglines, packaging and anything else distinctive can all be trademarked. Your business can also copyright something you've written, a feature on your website or anything else you've created. If you've invented something, you'll want to patent it. Applying for and managing these aspects of a business isn't always a simple process. A lawyer will help you identify your intellectual property, advise you on how to protect it and help you with obtaining copyrights and trademarks. For a patent, however, you need a special patent lawyer.
- What Happens if My Business Grows or Tanks Suddenly?
Owning a business, especially if it's a startup, can be unpredictable. Being an entrepreneur always involves risks. You have to be really nimble to keep up with the pivoting needs of your company. You may be pleasantly surprised by a period of unexpected growth, or you could suddenly hit a stumbling block and go under. Because nothing is ever guaranteed, talking to an attorney about these ups and downs before you launch will show you where your risks are, help you avoid them and give you the tools to maintain that balance as your business grows and changes.
- How Do I Make Sure My Business Is Compliant?
All companies, no matter what industry they're in, have to comply with state, local and federal laws. If you want to avoid fines, corporate liability, personal liability and other penalties, you'll need to figure out what those laws are and how your business has to comply with them.
Depending on the structure you've chosen for your business, the state you incorporated in and the place you actually do your business, business laws will vary. Consulting a small-business lawyer will help you discern which laws apply to you and tell you how to abide by them.
Going into business ownership always incurs some risk, but it's not always easy to know the risks of legal action. Obviously some businesses are more at-risk for lawsuits than others, but the preparation should be there in any case. A lawyer can help you identify risks and minimize them.
If you do get sued - and as your business starts to grow and flourish, your risk increases - your attorney will be an excellent resource. He will help you know how to address complaints and lawsuit threats.
Once you address these important legal issues, you'll be prepared to jump into your side hustle with both feet.
