Great ideas are easy to recognize at play in the marketplace. But as an aspiring entrepreneur, it can be hard to settle on an idea that’s truly workable. Your instinct may be to go with your gut for a business concept-your first “great” idea. However, it’s important to seriously consider the potential profitability of your endeavor before you move forward legally with business formation.
Before you finalize your idea, do your research. Forming a business can be incredibly rewarding, but it is a significant responsibility and financial commitment. It’s important to learn all you can about the industry you’re entering, the market value of your product or service and how others are successfully operating similar businesses. It’s advantageous to consult with legal and financial advisors early in the process of business formation to ensure that you start on the right track.
Once you settle on a business service or product, you need to legally define your business entity and register it with the Texas Secretary of State.
There are six types of business entities:
· Sole proprietorship
· General partnership
· Limited liability company (commonly known as an LLC)
· Limited partnership
· Limited liability partnership
Factors to consider when choosing the right entity include how you will operate with the other co-owners, how you wish to be paid, how investors will be considered, and your tolerance for risk. Consider the options carefully and consult your legal counsel to ensure that you register everything correctly.
Business ownership is an exciting challenge! When you decide to move beyond your big idea, follow these steps to sail toward success.