When starting a new business in California, founders have any number of important decisions to make. Choosing a business structure, formulating a business plan, launching products or services and making hiring decisions are just a few of these important elements. Each decision is crucial to the success of the business and may have lasting effects long beyond the grand opening.
One way to mitigate potential issues down the line is to put in the extra effort from the beginning. Take the time to consider some common startup errors as a means to find strategies to avoid the same pitfalls with your new venture.
Get it in writing
One mistake that is rather simple to avoid is failing to get important agreements and contracts in writing. For businesses with more than one founder, an important document is a partnership or shareholders’ agreement signed by all relevant parties. Whether your new venture is a partnership, limited liability company or a type of corporation, you need a signed, valid legal agreement between all parties before moving forward.
Beyond a partnership or shareholders’ agreement, document expectations and guidelines for every person involved with your business. Contracts, purchase agreements, leasing information and other relevant agreements need proper documentation in order to ensure successful operations for the business. Referring back to documents can provide the clarity and necessary information to resolve future disputes before they wind up in a litigious battle.
Set clear and consistent guidelines
Human resources are a key component of launching and operating a new business venture. Every person involved with the company from founders and shareholders to employees and vendors need to know what expectations come along with their role.
Even small businesses can establish these guidelines through employee handbooks and other human resource materials. Employees and contractors can refer to comprehensive, well-maintained handbooks as a means to address and resolve disputes throughout their involvement with the business. Think ahead about what issues could arise and continue to update manuals to include new developments and plan for how to handle them.
Seek skilled advice
Entrepreneurs often feel the need to go it alone in every aspect of the business. While this mentality is beneficial for self-starters, it can also derail even the most effective business-minded individuals.
Don’t shirk the advice and counsel of others in the early stages of business formation. Financial advisers, business law experts and industry leaders can provide necessary, beneficial insight into areas with which you lack expertise. No business owner has to do it all on their own. Utilize the resources available to you to ensure the new venture has a comprehensive, effective plan for addressing potential disputes long before they arise.