You have a brand-new business idea and you are ready to launch. Even with what you think might be a foolproof business plan, you must consider the risks involved with starting a new company.
According to Forbes, all business owners take risks. It is up to you, as the owner, to take the proper steps to protect your business. There are three things to consider:
If you are like most startups, then you probably have a unique symbol, design, logo or phrase that you associate with your company. If this mark helps to differentiate you from other businesses, then you need to register your trademark. If you do not register your slogan, symbol or logo, then other businesses may plagiarize. With a trademark, you have exclusive rights to this unique mark.
To protect your startup, you may want to consider forming a limited liability company (LLC) or a corporation. While not the only legal entities you may choose, they are separate entities. If you do not form an LLC or corporation and instead form a sole proprietorship, then you are personally liable for anything that happens to your business. For example, if a guest or customer fractures their hip on an icy step, the injury is your responsibility. LLCs and incorporating your business provide you with liability protection. Because there are many advantages and disadvantages to the type of entity that is right for your business, an attorney can assist with identifying the proper choice for you.
Business licenses are necessary but depend on your industry, entity and location. Most businesses need to apply for a business operation license. You may also want to file an employer identification number application. When you have an EIN, you can open a business bank account.
These are just several considerations and risks to keep in mind. Depending on the type of business and environment you’re getting started in, you may have more to consider prior to launching.