We’ve all heard the stories about how Steve Jobs and Jeff Bezos founded two of the most successful businesses in history … in their garage.
If only it were that easy.
The vision of being a bootstrapping entrepreneur certainly is part of an idealistic dream, but if you’re not set up correctly, it could result in business nightmares down the road.
Robert Schiappacasse, co-chair of the Corporate Department at Sills Cummis in Newark, broke down some of the issues that an entrepreneur needs to be aware of — before they open their garage door for business or get a place of their own:
- Licensing and regulatory: Do you need a permit or license to be in this business? Is this particular business regulated by the state — or by local government? Is it allowed to operate in that area — or out of a residence?
- Location: Are you going to buy or lease? Do you need some type of site plan approval or municipal approval to operate in that location?
- Financing: Are there financial reporting covenants? Are you going to have to provide quarterly financial statements to your lender? If so, who will do them?
- Retail: If you’re going to be selling a retail item, you’re going to need to collect sales tax. You’re going to need a seat sales tax certificate.
- Payroll: Will you have employees? If so, how are you going to handle your payroll? Are you going to use a payroll service or do it internally?
“There are so many little things to consider when you’re starting up a business,” Schiappacasse said. “The best place to start always is with a lawyer or a professional advisor to make sure that you have everything covered.”
