Starting a new business can be exciting and overwhelming at the same time. While an experienced business attorney can guide you through the legal nuances of entrepreneurship, it’s important to have a vision for your company — and be clear about your objectives. Here are several key questions you should ask yourself before starting a new business:

Why Do I Want to Start a Business?

One of the first questions you should ask yourself before going into business is why you want to start a new company. Is your goal to be your own boss and gain financial independence? Do you hope to make a difference in society or achieve a better work-life balance? Are you passionate about a hobby that you want to turn into your livelihood? Or perhaps you are seeking personal fulfillment and want to build a legacy for your family.

Whatever your reasons for starting a new business, they will be the driving force that keeps you going through the challenges you will inevitably face. Clarifying your motivations can help you develop a direction, stay focused on your goals, and increase your chances of success.

Is There a Demand in the Market for My Goods or Services?

It’s important to know whether there is a demand for your goods or services to avoid financial pitfalls, wasted economic resources, and business failure when starting a new business. Having a solid understanding of market demand can provide you with the insight you need to define your target audience, price your goods or services appropriately, and position your company to meet consumer needs. Conduct a competitor analysis to identify opportunities, reveal potential risks, and make informed decisions.

What are My Startup Costs?

Create a comprehensive budget and make a list of your startup costs — as well as your ongoing expenses. Your startup costs may include website development, the costs of registering your business, advertising, equipment, inventory, office or retail space, and insurance. Prepare a thorough business I amplan that details your funding needs, your strategies for generating a profit, and your financial projections.

How am I Going to Fund Startup Costs?

In order to get your business up and running, you will need to know how you’re going to fund it. Will you be funding your business from your personal savings account or borrowing from family and friends? Other options can include crowdfunding and attracting angel investors or venture capitalists. You might also consider applying for small business loans through the Small Business Administration (SBA) or grants that target specific industries.

What Business Structure Best Fits My Needs and Objectives?

There are several different business structures — and it’s essential to choose carefully before starting a new business. The entity type you select will impact your exposure to liability, ability to raise capital, and your taxes. It’s best to discuss your needs and objectives with a knowledgeable business attorney who can best advise you regarding the optimal structure for your company.

Business structures you may consider in Minnesota can include:

• Sole Proprietorship
• General Partnership
• Limited Partnership
• Limited Liability Partnership
• LLC (Limited Liability Corporation)
• Corporation
• S Corporation
• Professional Corporation
• Nonprofit Corporation

As your company evolves and tax laws change, it may be beneficial to revisit your business structure to ensure it is still advantageous.

How Will I Adapt My Business to Changing Market Needs?

In order for your business to thrive, it’s critical to have a plan in place for how you will adapt to changing market needs. Be sure to understand the market trends and patterns for your industry to remain relevant. Use data analytic tools to gather data about consumer needs and preferences to tailor your offerings. Notably, you should have a strategy implemented to be able to respond quickly to any changes in the market to stay competitive — this can include adopting new technologies or restructuring your business model based on consumer demand.

Am I Committed Enough to Meet My Goals?

Starting a new business takes a tremendous amount of dedication and hard work. Be honest with yourself from the outset — are you committed enough to sustain the long hours and personal sacrifice that may be necessary to reach your goals? A strong commitment can provide the motivation you need to build a solid foundation and get through any challenging times you may face in your entrepreneurial journey.

Contact an Experienced Minnesota Small Business Attorney

If you’re starting a new business, it’s crucial to have an experienced business attorney by your side who can advise you regarding legal matters, help ensure compliance, and provide the counsel you need to be successful. Located in St. Paul, The Law Shop Minnesota provides a wide range of legal services for business owners and entrepreneurs throughout the state. Contact us online or call (651) 344-6100 to learn more about how we can assist you.

The Law Shop Minnesota is dedicated to assisting clients with a broad scope of legal issues, including family law, business, and estate planning matters. Firm owner Louise Livesay has over twenty years of experience guiding clients in the Twin Cities and greater Minnesota reach peaceful, out-of-court resolutions for their divorce and family law matters.

Attorney Peter Ladwein is passionate about helping small business owners achieve their objectives, and protecting families and their legacies. Peter is licensed to serve clients across Minnesota and Illinois. Peter also practices collaborative family law and is committed to helping clients reach out-of-court resolutions.