Starting a business is a pretty scary thing, as if you are not careful, your first business could wind up being dead on arrival. In fact, some businesses fail to get on the ground for things that are entirely out of their control. For aspiring business owners living in Maryland, there are, at the very least, steps to take to mitigate risk. Here, we have listed the first three steps any business should take starting up to make sure things go smoothly and correctly.
The three steps you must take before starting a business in Maryland
Step One: Have a Good Idea from the Start
The first step to take is to actually have an idea. This might seem like a silly thing to suggest, but it is not at all uncommon for someone to decide to start a business before they even have an idea to help get it off of the ground, silly though it may seem. When picking out a good idea, one of the best things to do is to make sure that what you are offering is something that is not a niche already filled by a well-established company. If you try to do a common business, you run the risk of being dead in the water. Sometimes you can even try to do something that is already provided by another entity while offering a unique spin that makes people turn to you for your services and/or products. The takeaway is that innovation is the key to getting people’s attention.
Step Two: Create a Business Plan that Works for You
Having a good idea, something fresh is always an important first step in constructing a solid business in Maryland that will last you well. However, if you do not have a solid business plan to back it up, the best of ideas can wind up failing to generate success for you. If you are applying for a loan to help get your business off the ground, the lender, particularly if they are a bank, will want to see a solid business plan. It is absolutely important for that reason, but you should also look at it as especially valuable for yourself. They want to see the proof of concept, more or less, but having a business plan will help keep you on track and give you a good idea of where you want to go with the business, and how you want to go there. It may be a little difficult to properly get your ideas on paper, but just remember that whatever you write down isn’t necessarily locked in. So, you can just jot down something you think might be a good idea, and if you change your mind down the road, you can always go back and try something else. This is something you should be doing well in advance to actually talking to your lender and getting things going with creating your business, as it will allow you more time and space to formulate your ideas, get everything perfect. Make sure that you have someone you trust in establishing a business look over your plan so that you do not make any unfortunate mistakes with it.
Step Three: Establish what Your Maryland Business is
The next — and final — step of this article is to get things established as to what your Maryland business is. This is a lot less abstract, as what your company is can be determined by different criteria. For example, if you go into business as an individual, you will register it as a Sole Proprietorship. This is less expensive and less difficult than the other types but carries the risk of being personally responsible for the company’s debts and actions. So, make sure that you take care and go with this only if you are confident in your business. If you start with one or more other people, you could establish it as a general partnership. Both of these do not require a state filing to create. This is similar to a sole proprietorship, the assets of all involved are at risk in the event that it issued, or you have to repay the debts of the company.
If you have the money and the time, it may be worthwhile to establish your company as a corporation instead of going these other routes. It is significantly more time consuming than the other two, but it does create asset protection for the owners of the company. On the other hand, a corporation needs to adhere to various compliance requirements, as well as having and working with a board of directors. Basically, you need to be sure that you can handle all of these responsibilities, working with this board of directors as well as those who own shares with the company, among other things. The last option is to establish your business as a Limited Liability Company, or LLC. The benefit of this option is that you can have certain liability protections that a corporation has, while also having the greater ease of operation of a sole proprietorship. To have your business be a corporation or a Limited Liability Company, you must pay $100 for a filing fee with the Maryland Department of Assessments & Taxation.
Having an attorney to represent you, such as those at Lusk Law, LLC, is always very important and can do a world of good for you.