We all make mistakes. In fact, it’s necessary for our development. If you look back on your times as a teenager, you can probably reflect on thousands of mistakes you made. Whether it was that haircut or that horribly cheesy pickup line you used for your prom date, you can make mistakes and learn from them.
The same goes with starting a business. There are certainly going to be ups and downs and fortunately, many of those mistakes come with their own teaching moments where you can learn, “Oh, I shouldn’t do X again” or “I’ll make that change in the future.”
Those little mistakes are completely normal and part of the process. However, there definitely are some mistakes that you’re going to want to avoid from the start.
Not Checking Availability
If you’ve come up with the perfect business name and website address, you need to double-check and make sure that those names are actually available. You can do a quick and free trademark check with numerous places online (seriously, if a website asks you to pay, don’t do it).
Not checking and carrying on with the name could put you in hot water later. You don’t want to violate a trademark or find out a domain name is already taken. It could mean you have to start again from zero or worse, put you and your business in a legal battle.
Not Establishing a Business Structure
Although this somewhat resembles a business plan, they are in fact quite different from one another. Where a business plan revolves around budget issues and marketing strategies, your business structure refers to how your business is done.
This is all about your company’s organization from a legal standpoint. Is your business going to be a sole proprietor? Is it going to be a partnership? What about a limited liability company (LLC)? All of these come with major differences and will play a big role in how your company functions.
Forgetting About the Tax ID Number
You probably know your social security number by heart. As a functioning adult, you’ve probably had to write it down somewhere between one billion and two billion times in your life. Well, it’s time to add another number to your memory bank: your EIN number.
EIN, or employee identification number, is like the social security number for your business. Not having one means that you can’t file taxes, hire employees, or work with any bank. It’s such an easy process, it can be easy to forget.
Trying to Do it All On Your Own
There are plenty of loops to jump through and paperwork to wade through. You might be tempted to try and take on all of it, but the truth of the matter is you should be seeking help when possible.
Make sure you have a lawyer who has dealt with small businesses and entrepreneurs like yourself. Find an accountant who you can rely on and ask plenty of questions. They might be upfront costs you’d rather not have, but they’re going to save you in the long run. You don’t want to become just another statistic.
Not Putting Everything on Paper
When it comes to your business, it pays to leave a paper trail behind you. This applies to just about every aspect of your business, from financial decisions to hiring employees.
You might be relying on handshake or word-of-mouth agreements between you and partners, investors, or other entities and there’s one word to describe these types of practices: bad.
Having everything written down and signed is not only to protect you legally, but it’s also going to ensure that the business runs smoothly.
This also applies to patents, when spilling the beans on your idea or invention the patent application is filed could stop your business before it even starts.
Delaying Legal Issues
There are plenty of items on an agenda that can be pushed back. You probably have such a system in place, dividing tasks between levels of importance. With any legal issues, those should be on the forefront.
You shouldn’t think about “when I do X, I’ll take care of this issue.” That issue should be at the top of anything that needs to be resolved. Legal issues aren’t things that can be fixed with duct tape, they need someone to come in and do a complete fix.