22 Dec Starting a Business in 2020
You may have seen a recent article/post about the “50 Best Cities for Starting a Business in 2020.” Tulsa and Oklahoma City both made this list! Tulsa was identified as #1 for Wage Growth and #19 for Rate of Entrepreneurship. Oklahoma City was ranked # 5 for Rate of Internship and #23 for Wage Growth. It is an exciting time to do business in Oklahoma! In Tulsa and surrounding communities, there are business incubators, coworking spaces, active chambers of commerce, and a huge amount of networking opportunities.
If you have ever dreamed of starting a business or buying an existing business, I would encourage you to do so but think it through carefully, and start it the right way. By starting it the right way, I mean don’t shortcut the steps you need to take. Starting a business from scratch, or buying an existing business are important decisions, and missing steps or making decisions you later regret can have serious legal and tax consequences.
Steps to Consider if you are Starting a Business
Create a thorough business plan AND budget
Having a thorough business plan (and budget) in place is something that often gets overlooked in the initial excitement. I am also a mentor and subject matter expert for SCORE in Tulsa, and there are free resources for business plans available through SCORE, as well as other entities. Just like with anything else though – don’t use just anything you find on the internet. These decisions are too important to take lightly. A link to SCORE business planning resources can be found here: https://www.score.org/business-plans-startup-assistance-resources.
Decide how you will structure your business
You also need to decide on a formalized structure for your business, such as a corporation or a limited liability company. This is a conversation I would encourage you to have with an attorney as well as your tax advisor, working together. The Secretary of State website is a great place to start for resources/forms, but submitting that filing is not the end of the process. Depending on the structure you choose, you will also want to have governing documents professionally drafted, such as an operating agreement, partnership agreement, or bylaws, as well as buy-sell agreements if there are multiple owners.
File for licenses or permits
Depending on the type of business, there may be licenses or permits needed, as well as additional registrations for tax purposes, such as the Oklahoma Tax Commission if you will be selling taxable goods and/or services.
Hire employees or contract independent vendors
The conversation about employees versus independent contractors is also important, and there are many factors that go into that decision. Misclassifying workers as contractors when they are actually employees can have serious consequences. Again, consult with an attorney about these issues, and your tax professional should be in the loop as well.
Draft contracts for vendors, clients, customers, contractors, and employees
Every business needs solid written contracts in place. These may be contracts with vendors, clients, customers, contractors, and occasionally employees. It is often less expensive for preventative legal services such as contract drafting and negotiation than trying to fix a bad contract later or litigate it after there is a problem.
These are just a few of the steps involved in starting a business. Having a solid business plan in place, as well as professionals to guide you through the process can help to make it manageable and get you up and running smoothly.
If I can help you with starting a business 2020, I would love to hear from you! To schedule a consultation: 918-938-1322 or jamie@jmillerlawfirmpllc.com.