When Writing a Business Plan, Don't Forget the Legal Issues
If you are new to entrepreneurship then one of the first steps you will likely take in establishing your new business is the creation of a business plan. While a business plan itself is not a legal document, it does have a major impact on legal issues related to your business. In fact, in many cases you will only be able to write an effective business plan once you have already decided on major legal issues related to the creation of your business. As such, when starting a new business and working on that all-important business plan, be sure to keep these legal issues on your radar.
Deciding on the business structure you want for your business will likely be the first big legal decision you make as a company owner. You will also need to decide on your business structure before completing your business plan. After all, potential investors aren't going to be too keen on your plan if they don't know what type of company they are actually investing in. In most states, the business structures available to you are corporations, sole proprietorships, partnerships, and limited liability companies.
Business license requirements differ for the local, state, and federal levels. Most counties require businesses to apply for a business license regardless of the type of business being run. State business license requirements vary widely, on the other hand, with some states requiring state licenses for all or select businesses. Federal businesses, however, are more rare and tend only to be required for businesses selling alcohol, tobacco, or firearms, or if the business dispenses investment advice or manufactures prescription drugs.
Other permits and regulations could also have a big impact on your overall business plan. Many counties, for example, have zoning restrictions pertaining to what types of businesses can operate in certain areas. For example, if you plan on selling tobacco products you may have difficulty setting up shop if you are within a certain distance from a school. Likewise, there may be health and safety permits that are required for certain businesses, particularly in the food industry. Be sure to research these permits beforehand so that your business plan doesn't encounter unforeseen obstacles later on.
Starting a new business is an exciting opportunity. While it can be easy to get caught up in the rush and exhilaration that a new business brings with it, you need to remember to take into consideration the legal requirements your new venture will have to meet. As you write your company's business plan, be sure to keep those legal requirements in mind so that you have the most effective plan possible going forward.