Forming a new business is exciting, so it's easy to get caught up in handling the fun stuff and forget about all the tedious details. Those details are what can end up making or breaking your business, and here are two major mistakes that many new business owners make. Avoid these mistakes, and you can save yourself a lot of time and money.
A first mistake many people make is not getting the right professional assistance from the start. The reason business owners don't seek professional help is often because they are trying to cut costs, but working with an accountant and lawyer to set your business up the right way actually usually saves more money than trying to go it alone.
According to statistics, over half of small businesses experienced what was deemed a significant legal event from 2011 to 2013, but many were not prepared to deal with it or didn't seek legal assistance to mitigate damages or exposure. In one example, a person called an attorney about an issue involving a new partner -- an issue that had cost him $100,000. When the attorney reviewed the case, it was realized that the problem could have been avoided if the business owner sought legal advice about the partnership agreement in the first place.
A second big mistake is simply forgetting to complete important paperwork. While it might be idealistic to trust people on their word and a handshake, that's not the world we live in anymore. Take time to get information in writing and properly signed -- with witnesses. As you are forming your business, make sure you understand each documentation requirement and that all your forms are filled out and filed appropriately. Working with a business law professional can help you avoid a typo or other error that could later eat into your bottom line.
Source: Forbes, "Seven Sadly Common Mistakes When Forming A New Company," Brett Nelson, accessed Dec. 02, 2016