Top tips before starting a business

Starting your own business is exciting, but a keenness for fast growth can mean essential building blocks are missed.

Commercial lawyer Stuart Price shares his checklist of essential points when starting a business.

Every start-up wants the new business to deliver results but this can result in owners overlooking the foundations or building blocks that would otherwise help to keep their business sustainable, or attractive to external investment.

Here’s my checklist for start-ups to consider at the beginning of the new business journey:

Keep discussions and negotiations confidential

Keep discussions and negotiations confidential by using a Non-Disclose Agreement. Not only do you want to prevent third parties from taking your ideas and then setting themselves up in competition, you can also lose certain intellectual property rights if you disclosure information too early.

Written agreement between co-founders

Ensure co-founders have a written agreement between themselves. This needs to deal with not only
what each founder’s obligations are, but what happens to shareholdings where external investment is sought, and how shares are valued if someone wants to leave the business before it is sold or listed.

Identify and protect intellectual property

Intellectual property takes many forms, but not all require registration, and can arise sometimes by accident upon creation. It is important to identify these and know what to do to protect them.

Check your branding

Make sure no one else is using your intended branding. Make checks to ensure other companies are not using your proposed brand names or anything similar. At best this will cause confusion, but at worst could leave the business facing legal action.

Clear terms & conditions

Have clear trading terms with your suppliers and customers. If you do not use your own terms, you will either find yourself doing business on the other party’s terms which are likely written in their favour, or on terms implied by the law.

Make the business investable

Most investors will need to see a route to achieve a return on investment quickly. They are looking for a driven team, protected intellectual property a clear market strategy, and identifiable and profitable income streams. Tax reliefs are also available to those investing in start-up businesses too.

Comply with GDPR & other data regulations

Respect customer data. Tell people what data you will hold, and what you intend to do with it. Data subjects have many rights, and you need to be able to respond to any access requests quickly. Penalties for non-compliance can be brutal.

Find the right professional advisor

Choosing the right professional partners. Find professional advisers who have the technical and practical expertise of dealing with businesses in your sector. Ensure they are qualified to give the advice they say they offer, and that their advice is insured.

More information

For more information regarding the set up of your business, contact Stuart Price, Partner, Lodders Corporate & Commercial team, E: stuart.price@lodders.co.uk, T: 01789 339117

This article first appeared in Issue 8 of our client magazine, Lodders Life. Read this and more articles here.