Launching into a dream: a roadmap for start-ups
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Laying the right foundations for a dream business is essential and will allow you to continue to be successful.
OPINION: Covid has made many wonder where they work and why. Many are considering finally embarking on this long-buried dream, whether as a side activity or full-time.
From a legal point of view, it may seem too difficult to think about the possible problems. But in reality, it is possible to get it right from the start by asking a few simple questions.
The answers will help you lay the foundation for success.
So what are the top things you should do if you are planning to start a new business?
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1. Check this name: Your name will help you stand out.
Often times, people don’t check to see if someone else is already using their chosen name. It can be very demoralizing if you spend six months working on a project only to find out that the domain name is taken, that a brand exists, or that a large company uses the same name (and would likely object if you try. also).
Our roadmap tip is to spend 20 minutes researching ONEcheck, a government website that will look at the most important databases for conflict.
2. Structure yourself: Think early on about the structure that will match the impact you want to have.
Is it better to be a sole trader, business, partnership, charity… just like buying a car, there are plenty of legal vehicles to choose from – upgrade yourself if you need to. ‘a 4×4 or a seven-seater so you can better accomplish your mission.
The answer for you will likely depend on where you plan to be in five or ten years.
3. Blues co-founder: Everything will be fine with a co-founder at the start. Pop that champagne! But what about six months from now? How about two years? How well do you really know them?
More importantly, what if you work 80 hours a week on your dream and they only contribute eight hours a week, so what?
The roadmap advice here is simple, document your mutual relationships, which is most often done in a private shareholders’ agreement. Mutual incentive can be done through stock purchase agreements that require ongoing contributions.
4. Protect your IP: Intellectual property will be the key to your business, so how will you protect it? It’s cheap enough to file your name, but what about that innovation that’s going on in your head? Sometimes it is worth trying to patent, often it is expensive, time consuming, and not worth doing.
Some of the more successful companies just keep things like a trade secret. But if you do that, how will you make sure when you talk to future customers or suppliers that they don’t embrace your brilliant idea and get around you?
The roadmap advice is to keep things a secret and safe, but develop a nondisclosure agreement to use when you go out and need to disclose something important.
5. Raise that money: Money is like oil in the machine of a new start-up. You will need it sooner or later! So where are you going to get it from?
When you collect funds from other people, you must make sure that you comply with the rules of the Autorité des marchés financiers.
You may be eligible for exemptions, which will reduce the costs involved. The roadmap tip is to understand the ins and outs of fundraising and the exemptions you may be eligible for.
Too often we have seen entrepreneurs who do not do some of the things described here and a few months or years later have quite a few regrets. But a lot of this is pretty straightforward to get right from the start.
Laying the right foundation for your start-up is essential and will allow you to continue and build a successful business.
Steven Moe is a partner at Parry Field Lawyers