Haven’t we all been there? Pulled over, discombobulated and anxiously shuffling through our purse, wallet or glove compartment to find the documents needed to answer the anticipated questions of the officer…outside of the infamous “Do you know why I pulled you over?” In business, we can often relate to this feeling as we find ourselves shuffling through the madness to figure out “What exactly is it that we need?” In this world of sometimes organized chaos, it’s easy to get caught up in working through business strategies and acquiring business coaching relationships to resume building and finding the perfect mix of team building talents. No matter the business inquisition; the calm to your chaos can ultimately be found in your foundational documents. Looking for a quick hit of clarity in a consolidated space; I’m here to give you just that!
This strategic tool is a good starting point to actualizing your thoughts; and according to Forbes’ article 10 Entrepreneurs Share Their Top Business Plan Writing Tips (June 15, 2020), in business strategies and development, your business plan …acts as a map throughout the entire process… From the traditional 20 pagers comprised of dense Mission, Vision and financial stability showcasing to the non-traditional cogent slide decks; clarity, feasibility and contagiousness of the content is what matters. The longevity of any business plan rests in understanding that you are not locked-in to what you see right now, and taking full advantage of the opportunity to realistically think big will secure long-term success! With growth and scalability as the common denominators for all business plan elements, you will find yourself solving the ultimate equation of accommodating and mastering an evolving market.
Do I need it? Not a requirement, but highly recommended. From securing funding to simply capturing unpublished historical business ideas, strategies and reference points; a business plan has many uses, and comes highly recommended.
Identifying and establishing your business structure is a key element to a successful existence, and according to the The Small Business Administration’s business guide Choose a Business Structure (June 1, 2021), your structure …affects how much you pay in taxes, your ability to raise money, the paperwork you need to file, and your personal liability. Form a Limited Liability Corporation (LLC) to a Sole Proprietorship, keeping it easy to digest, here you will find common structures and their pros and cons.
- Sole Proprietorship (I have a great idea…)
- pros: easiest to start, you possess complete control
- cons: personal tax implications, full personal liability
- Partnership (We have a great idea…)
- pros: simplest to form for co-ownership, multiple owners, liability options based on partnership structure
- cons: self-employment/personal tax implications
- Limited Liability Corporation (I/We have a great idea…)
- pros: carries the benefits of a corporation and a partnership, protection from most personal liability
- cons: possible dissolution requirements based on time or change in ownership, self-employment/personal tax implications
- Corporation (I/We have a great idea…)
- pros: separate entity from its owner(s), strongest protection from personal liability, survives ownership transitions, stock options
- cons: most expensive to form, stronger operational/record-keeping/reporting requirements, potentially double taxed
- Non-Profit 501(c)(3) (I/We have a great public service idea…)
- pros: protection from personal liability, tax-exempt
- cons: profits can not be distributed, expenditures governed by Internal Revenue Service guidelines
Do I need it? Yes, identifying a business structure is needed. As structure is based on the unique characteristics of each business venture, the above is not an exhaustive list of possibilities but a compilation of commonalities. Seeking the advice of a qualified attorney and/or tax professional is highly recommended.
License and Registration
Complying with state and local requirements is a must, as proper licensure and registration will keep you operational, promote business engagements and govern practices for your service area. Business structure, activity and location will determine your local, state and federal licensure and registration needs. Reporting requirements, license and permit lifecycles, and the need for foundational documents such as Articles of Incorporation, Bylaws, or Agreements will arise at this point, and a solid business plan will seamlessly guide you through compliance and execution.
Outside of federally regulated activities, such as firearms and alcoholic beverages; local licensure and registration requirements typically rest with and are governed by each locality.
Do I need it? Yes, and having your business name, purpose, location and structure established will aid in this process.
When it comes to protection of your business, your brand or product; the US Patent and Trademark Office (USPTO) has you covered. According to the USPTO’s What is a trademark? (March 31, 2021) definition, A trademark can be any word, phrase, symbol, design, or a combination of these things that identifies your goods or service. It’s how customers recognize you in the marketplace and distinguish you from your competitors. Trademark protection with the USPTO provides nationwide legal protections for your business, brand, or product. Creativity and uniqueness is rewarded here as they define strong trademarks, and are the easiest to protect. When that delicious pound cake sold at the local farmers market blooms into a thriving online store, this level of protection becomes necessary!
Do I need it? Not a requirement, but highly recommended. Ownership and rights start with business use, but broader nationwide rights and protections rests with the USPTO.
The entrepreneurial highway is exciting and the view is great, but it will require you to be pulled over to find those documents needed to answer anticipated questions. Being discombobulated with a side of anxiety is optional, and whether LLC or 501(c)(3), being foundationally solid will leave you unshakable, and I can get you there.