8 Questions to Ask When Starting a New Business

A Japanese proverb states, “Vision without action is a day dream. Action without vision is a nightmare.” This proverb is indeed true to those entrepreneurs who are geared towards transforming their vision into reality.

If starting your own business is an essential part of living your American Dream, then it is important to remember than the way your business starts may have a severe effect on and determine its success.

The downfall of most businesses is a failure to plan ahead of time, neglecting the two crucial aspects of any business’s success: researching and planning.

Daydreaming is an excellent time to think, research, and plan your business; however, your daydreams need to be constructive in nature by forming the right thoughts, asking the right questions, and exploring the grey areas of starting your new business.

While daydreaming, you may want to consider the following 8 questions when coming up with your overall plan:

1. Do I know anything about business?
2. Am I willing to put in the time?
3. Should I incorporate?
4. What type of corporation is good for me?
5. Is my business plan comprehensive?
6. What are my tax consequences?
7. Do I have enough money to start my business?
8. Do I have the proper management to run this business?

These questions are by no means comprehensive or exclusive in nature; however, they are a good place to start.

1. Do I know anything about business?

For many obvious reasons, you want to make sure that you are knowledgeable about the business you are starting. If you do not know the business, you are more than likely destined to fail, as you are taking an enormous risk, especially if your start-up funds come from your life savings.

If you do not show keen knowledge in your business area, not only will the market most likely break you, but any credibility you are trying to represent to a bank or private investor will also be lost.

Therefore, it is very important that you understand the business world and how it works, before venturing out.

2. Are you willing to put in the time?

Owning a business is time consuming. The long hours an unstructured schedule can be both financially and emotionally draining. However, once you’ve implemented a system carefully and correctly, your freedom is priceless and, above all, rewarding.

3. Should I incorporate?

Incorporating is always a good idea, as the last thing you want to do is expose your life savings or your family’s savings to liability.

Incorporating your business minimizes your financial liabilities and exposure. If you are unsure what type of business you would like to create or whether to incorporate, contact an experienced business attorney who can help walk you through the process.

4. What is the right business structure for me?

In Georgia, the types of corporations available are
>Limited Liability Company (LLC);
>Limited Liability Partnership (LLP);
>Professional Corporation (PC); and,

Researching and selecting the right entity is very important, as the type of entity determines your future liabilities. At this stage of planning your business, consulting with a business lawyer to discuss your options is invaluable.

5. Is my business plan comprehensive?

Once you’ve focused on what direction you want to move toward and selected your entity, it’s time to put your ideas on paper.

No matter how good your idea is, if a banker or private backer can’t understand it, the idea may be useless. In addition to helping you obtain funds, your business plan also shows how organized you are and demonstrates what direction you wish to take with your company.

In essence, your business plan is the road map for your business. You want to show that you have planned ahead and will work towards that goal over time. You also want to show that you have considered any and all unanticipated contingencies, thus, your business plan will still survive and achieve the projected goals and ultimately be profitable.

The more time you spend preparing it, the clearer your steps and projections will be.

6. What are my tax consequences?

The type of corporation you select determines how you will be taxed. It does not hurt at this time to consult with a Certified Public Accountant to discuss the tax consequences for each possible choice of corporation.

7. Do I have enough money to start my business?

If you start out in the negative, you will always be in the negative. In other words, you need to have the largest portion of your investment, preferably your own money, readily available to invest at the outset.

Most banks are eager to lend money, but they want to see a serious business plan, dedication, credibility, and mentally having what it takes before they will invest.

8. Do I have the proper management to run this business?

Management of your business is crucial to its success. You need to ask yourself questions like

>How is this expenditure going to improve my business?
>How much money can come out of this expenditure?
>How are my business savings working?

You need to make sure you are managing your business finances so that you are not only spending money but saving money. In short, you need to learn how to be a good manager to manage all your resources efficiently.

Remember: The key to your success as a small business owner can be summarized in a few words: planning, planning, planning. Failure to properly and adequately plan, may turn your successful American Dream into a long and expensive nightmare.

This article was first published on our blog on 10/21/14.

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Disclaimer: Nothing in relation to the enclosed information should be construed and or considered as legal advice for any individual, entity, case, or situation. The following information is prepared for advertisement use only. The information is intended ONLY to be general and should not be relied upon for any specific situation. For legal advice on your specific situation, we encourage you to consult an attorney experienced in the area of Immigration Law.