3 Common Mistakes Made In New Business Formations
Posted by: Brookside Admin
Forming a new business can be an exciting time, but it's also a time to pay close attention to detail and avoid mistakes that could doom your business before it even starts. At Brown Kinion and Company, we help you through each phase of new business formation to ensure these costly mistakes don't occur and your business starts on a solid foundation. At Forbes, Steven Gladstone shared some of the common mistakes he's witnessed that threaten new businesses.
- Failing to disclose details
It should go without saying, but it's surprising how often a new business is upended by information that should've been shared at the beginning of the venture. Everyone involved in the business should share all pertinent details about themselves, their background and their financial situation before business formation begins. If you don't, you risk losing thousands of dollars in legal fees and other expenses and losing time on a failed venture. It's also a good idea to run background checks on all parties involved.
- Incomplete documents
This is where attention to detail plays a significant role. Without properly completed documents, the deal you think you're making might not be the deal you end up with. For example, there have been many examples of individuals failing to obtain signed, dated and initialled official documents involved in a transaction. When this happens, there's little recourse if one party involved fails to hold up their end of the bargain. For this reason, it's a good idea to work with professional who are experienced in these types of deals and can be present at the signings to ensure everything is done correctly.
- Business with friends
It's an unfortunate truth that's been proved time and time again. Doing business with friends, or even family in many cases, often turns bad for at least one of the parties involved. The first mistake that happens in these situations is the element of trust leads to a lack of proper documentation, which invariably leads to a deal going bad. Even with lawyers involved, personal relationships often spoil a good business venture. If you can't afford for money to be lost or the business fail, keep work and your personal life as separated as possible.
Before you being forming your new business, contact us at Brown Kinion and Company for assistance in identifying start-up capital, determining financail needs, preparing your business plan and much more.