Starting a business is an exciting and nerve-wracking experience. Whether the venture is meant to be big, bold, and long-standing or whether it is intended as a narrow, limited, temporary entity, the reality is that no one knows how the future will unfold. Every entrepreneur encounters unexpected issues that are good and bad. Likewise, they often end up working with a myriad of unforeseen contractors, employees, partners, businesses, and individuals.
Plan for the Future Now
Despite these unknowns (or perhaps in part because of them), new entrepreneurs often focus on their immediate broad goals and needs then leave the subtleties and details to be worked out later. Unfortunately, this is the wrong approach. Neglected details quickly and needlessly turn into headaches.
Although it is difficult, proper planning is an essential step if you want your Virginia business to prosper. It helps maintain good relations with partners and vendors, and it maximizes your bottom line. Similarly, proper legal planning can help facilitate the business’s overall function. It will also help prevent problems or address them before they occur.
Questions to Consider When Starting Your Virginia Business
- What is the business activity?
- What is the current structure?
- Is the business registered already in another state?
- Where does it or will it conduct business activities?
- How many employees are there currently?
- How many owners, investors, and managers are there currently?
- What is your business’s exposure to liability?
- Can you insure against the risks?
- How many shareholders, partners, and managers do you anticipate?
- How many employees do you anticipate?
- What, if any, benefits do you intend to offer them?
- How long do you intend to run the business?
- What gross income range do you anticipate over the next few years?
- What are your retirement savings plans relative to the entity?
- How much time do you devote (full time or part time) to the entity?
- How important is administrative ease?
The answers to these questions will help guide the choice of entity (i.e., the type of business such as a sole proprietorship, LLC, PLLC, LLP, partnership, s-corp, c-corp, or benefit corporation) and dictate the necessary paperwork, licenses, and other filings.
Taxes
In addition to the questions above, you should carefully consider taxes. The type of entity you form should be driven by, among other concerns, tax considerations. Likewise, how you will pay taxes, what taxes will be owed, and the impact of each employee, contract, or investment on your bottom line should be considered beforehand. Not only will these planning steps lead to a larger net profit, but they will keep the business and its owners out of trouble with the government–whether local, state, or federal.
Professional Legal Advice
With the advent of legal zoom and other online resources, it may be tempting to simply create your business entity through self-help and online filings. While this may be appropriate for some enterprises–such as those formed by a limited number of experienced entrepreneurs–most people should seek legal counsel when forming a new Virginia business. Similarly, you should consult with counsel early in the process so that mistakes or vulnerabilities can be identified and remedied early. This will provide a peace of mind and net benefit to the company that will be as important as any other investment your new business makes.
If you are considering forming a new business in Virginia, please contact our office today to make an appointment.
