Many entrepreneurs in Virginia dream of opening businesses. However, no start\-up company can be a long-term success without proper financial planning. Focusing on purchasing stock for the business, signing a property lease and other steps cannot receive the necessary attention if personal debt deters and distracts the new business owner. Until the company has a credit history, it will be the owner's credit score that matters. At first, all attention must be on projecting expenses -- both start-up and ongoing -- not forgetting potential accounting and legal fees, computer software and hardware, scanners, printers and an office.
An often-overlooked necessity for the success of any new company is a written business plan by which the entrepreneur's vision gains structure and provides directives for the logistics of launching the business. At the same time, there must be a backup plan because the reality is that not all start-up companies survive. Make sure there is a job to go back to if necessary -- or any other income stream. The next step may be to decide on the most appropriate business structure. Will it be a limited liability company, a sole proprietor or one of the other available options?
Many new businesses cannot afford to cover the owner's living expenses for a considerable period after establishment. For that reason, it is imperative to establish an emergency fund that could cover up to 12 months of expenses for the owner. Maintaining such a fund beyond that time could help when the business experiences cash flow problems.
Consulting with an experienced business law attorney from the outset may benefit any start-up company in Virginia. A seasoned lawyer can explain the importance of keeping personal and business finances separate. Such a professional can assist with drafting the business plan, and he or she can provide the necessary information about the different business structures to allow the client to make informed choices. Having a skilled attorney's support throughout the difficult times of establishing a new business can be invaluable.
Source: gobankingrates.com, "Key Signs You're Ready to Start Your Own Business", Holly Hammersmith, Accessed on Nov. 26, 2016