3 Things Every Startup Needs
Imagine the foundation of your startup as a three-legged stool. Now imagine yours has only one leg… or two. Pretty wobbly. Just as a stool needs three legs to be rock solid, so, too, does your startup. That’s why you need the following three elements to start off on the right foot. Each has a crucial role to play, and here’s why.
1. Business Plan
Compelling business plans attract investors. Lots of startups want to attract investors, but even if you don’t, everyone wants to avoid expensive mistakes and miscalculations. That means you need to understand the nuts-and-bolts of your business ahead of time. In other words, you need a business plan.
The time you spend up front will save you hours down the road. That’s because you’re taking the time to think proactively and work through challenges and issues before you open your doors – before getting caught up in the day-to-day challenges of running your business.
What’s more, you’ll be better prepared to explain your idea to your audience, whether that’s investors, customers, suppliers, partners – even employees.
A business plan helps you:
- Develop your business model
- Map out your execution
- Prepare your financial projections
- Persuade your audience – investors andcustomers
Lawyers make sure your startup is operating legally in every way. That way, both you and your company are protected.
For instance, if you have partners, everything you agree to verbally needs to be in writing – even if you’ve known each other since the first grade. Haven’t made any money yet? Don’t be fooled. The time to deal with these issues is before there’s money on the line. (In fact, I recommend that you set up a Grunt Fund.)
If you’re planning to speak to investors – even if it’s your parents or your best friend – you need a lawyer advising you, before you pitch anyone, so that you, your fledgling company, your friends and your family are protected. You want to be sure your making the right kind of deal for you and your company. Did you know that if you don’t structure things the right way now that it may impact your ability to attract investors later? Didn’t think so.
And there’s more. A lawyer can also help reduce your risk by guiding you on issues such as:
- Legal entity selection (e.g., LLC, corporation, etc.)
- Founders agreements
- Employment issues
- Privacy policies
- Terms of service
So go talk to a lawyer who’s experienced in helping startups.
Accountants ensure that your financials are accurate. They’re also great at helping you set up bookkeeping and tax routines that will keep you in good shape when it comes to Uncle Sam. You can also get important advice on effective tax strategies that allow you to legally lower your annual tax burden.
You need all three.
All three legs—business plan, attorney and accountant—are indispensible if you want to launch your business from a solid foundation. Although these professional services don’t come free, they’ll save you money in the long run and help you sleep better at night.
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