Many of the successful companies that you know and love today were actually founded and developed during periods of crisis, namely recessions: Walt Disney Productions was started right as the Great Depression hit, the idea for HP was formulated during the 1937-1938 recession, and even Microsoft was developed following the 16-month recession of 1973. This goes to show that, even in the most trying and challenging circumstances, ideas can still come to fruition and entrepreneurs can still go on to find success.
Maybe you’re considering launching your own business in the near future, despite the global economic setbacks brought on by the COVID-19 pandemic. There’s no denying that the virus’ impact on startups has been particularly adverse, as most have seen a decline in supply and/or demand. The virus has also prompted startups to formulate and implement contingency plans to limit their workforce and reduce employee salaries. Certain startup founders have even taken pay-cuts themselves to curb the pandemic’s repercussions.
Nevertheless, the startup landscape has continued to adapt and thrive even under COVID-19, with companies focusing on innovation and diversification of business operations. With this in mind, it’s absolutely possible to use this as an opportunity to develop your ideas and launch your own startup. But it’s essential to know exactly what you’re getting yourself into; here’s what you need to know about the costs and legal requirements of starting a business, and how a startup lawyer can help.
By now, you know that there are many costs associated with opening a business; there’s equipment costs, incorporation fees, inventory, trademarking, and plenty more. There are also several legal requirements you must follow in order to launch your business; you need to acquire the appropriate licenses and permits, research and abide by labor laws, and set up contracts. As someone who is just getting started, you’ll want to have a knowledgeable expert in your corner to assist you in navigating these costs and requirements. This is where startup attorneys come in.
While there are online resources you can consult to familiarize yourself with the basics of legal compliance for startups, having a specialized startup lawyer in your corner will significantly enhance your understanding of your legal requirements and help you meet them. Many firms offer affordable fixed-fee packages that cover sessions, document drafting and preparation and negotiation for the typical aforementioned startup costs.
It’s particularly important to have a thorough understanding of your legal obligations as a business owner because there can be a string of costly consequences if you fail to meet certain standards. Issues in trademark filing, business registration, and copyright ownerships are uncommon, but they do happen. When it comes to trademarking, for example, you run the risk of trademark infringement if you use a mark that is too similar to someone else’s or is likely to cause confusion among customers as to the source and availability of certain products or services. With this in mind, it’s best to have a qualified expert on your side to assist you if such problems do arise.
In fact, failing to hire seasoned legal counsel is one of the biggest mistakes a startup can make. Oftentimes, entrepreneurs in the beginning stages of launching startups make the misguided attempt to save money by hiring inexperienced attorneys. Though they may save some cash in the short-term, founders who choose this path are ultimately denying themselves of much-needed legal expertise, which can save a lot of money in the long run. Instead, it’s advisable to seek the assistance of attorneys who are well-versed in areas such as corporation law, contract law, tax law, and franchise law. Knowing that you have a knowledgeable expert on your side can provide you with the peace of mind you’ll need to start your business operations on the right foot.
To ensure you’re hiring the right lawyer for your and your startup’s needs, do your research. Do a deep dive into the websites of the law firms you’re considering. Once you’ve narrowed it down to a few choices, equip yourself with some key questions to gauge their offerings. Some of the best questions to ask the attorneys you’re interviewing are as follows:
• Do you have experience in…? If you need a lawyer to handle trademarking issues or contract negotiations, ask them directly if they have experience in handling those matters.
• Have you assisted other clients in my industry? Asking this will help you determine the attorney’s level of familiarity with your industry and its requirements. If they have served other clients who work in the same industry, they likely already have a baseline understanding of what your needs will be.
• Are your rates negotiable? Again, as a startup, your finances are likely relatively limited. While it’s unwise to skimp on your legal costs, this doesn’t mean you can’t negotiate. Maybe they’ll refuse, but there’s no harm in asking.
In addition to their credentials and their answers to the aforementioned questions, it’s important to prioritize “fit”, which speaks to the level of trust and comradery you feel with the individual. At the end of the day, you’re going to be working closely with this person and entrust them with a significant amount of responsibility, so you want to ensure that you enjoy working with them and feel as though they have a genuine interest and respect for your work. Startup lawyer Steve Kaplan recommends seeking referrals from people you trust as the best place to start to gauge this fit.
As an entrepreneur launching a new venture in the middle of a global pandemic, you have enough to worry about. There is a massive amount of planning and consideration that goes into starting a business even in the most ideal climate. While meeting the legal requirements for your company should absolutely be front of mind, you don’t need to navigate this all on your own. In hiring a startup attorney, you’ll ensure that you’re covering all your bases and meeting all of your legal requirements. Once the legal matters have been handled by the experts, you can get down to business.