As a startup, or even a small business that is entering its next development stage, you need a solid foundation to build upon and grow. This helps to prepare your business so that it can take advantage of growth opportunities. Think of it as laying a solid foundation—just as you would if you were building a house—that you can build upon it and support the business as it evolves and grows.
Yet, many small businesses find themselves ill-prepared to deal with the challenges of starting a business and the impact of an owner’s initial business decisions on customers, staff, finances, operations, and legal compliance.
Develop a Business Plan That Evolves As You Grow Your Business
A good business plan, like a roadmap, can help you stay on track and execute your growth strategy, from a fledgling enterprise to a thriving operation. The more specific the better. Think through the key elements of your business strategy, such as your objectives, available resources, daily activities that need to happen along the way, and any possible speed bumps you may encounter.
Your plan will also help align the team to your overall vision so that everything and everyone works in harmony towards achieving the same goals.
Treat your business plan as a living, breathing document! Revisit your plan often to make sure it stays relevant and continues to keep your organization on track.
To simplify things, break your plan into manageable chunks that address key business areas. For example, you can have a section for funding growth, one for sales and marketing, one for operations, one for managing your company’s legal and government requirements, and so on. This approach will ensure your business plan is an invaluable asset as you navigate your business along its journey.
Make Compliance a Part of Your Business Foundation
An important part of building a strong foundation involves managing the legal and regulatory compliance requirements that go with doing business. Just as you would obtain the appropriate permits, inspections, and approvals when building a house, you should expect and know how to handle the new compliance responsibilities that crop up when you start, run and grow your business.
Compliance is challenging, and it is something that many small businesses overlook. Failing to maintain compliance and ensure that the business remains in good standing with local, state and federal regulations can be quite serious and damaging—both to your business and to you personally, as the small business owner of the incorporated entity and the person doing business on its behalf.
As you prepare your business plan, take time to identify and record the compliance requirements placed on your business by local, state and federal authorities.
For example, if you’re an LLC, your compliance plan should include important due dates such as when to hold annual meetings, file your annual report, issue membership shares, pay franchise tax, or update your operating agreement.
All businesses, whether a sole proprietor or LLC, should also include a process to manage and maintain business licenses and permits, including any renewal deadlines or changes that occur.
Small businesses must also comply with their own governing documents. Refer to our comprehensive list of business compliance requirements to help strengthen your plan.
Leverage the Expertise of Trusted Partners
Finding the time to accomplish everything on your own can be challenging. Each stage of your business life cycle—such as opening a new location, expanding a product line, officially incorporating, or changing your entity structure (e.g., changing to an LLC)—triggers important compliance obligations. Eventually, keeping up with steps and requirements using online searches and a spreadsheet will become unmanageable.
Just as you use automated tools like customer relationship management, time tracking, and order management, you can keep your business in good standing with state and federal authorities by working with an expert trusted partner who leverages automation technology to reduce manual time-consuming regulatory compliance tasks and answers your questions about these steps as they arise.
“The common mistakes are in the details, a lot of the paperwork violations, a lot of little things you miss along the way,” says Karen Kerrigan, CEO of the Small Business & Entrepreneurship Council. “And again, technology, apps, a lot of tools are out there right now that make it a lot easier for you to comply and just to stay on top of it. Do not wait until the end of the month, or two months or three months. The more you stay on top [of] it—you can check your mistakes. Technology is allowing businesses to comply a lot easier.”
Choosing a Professional Registered Agent
Although choosing a registered agent is another key step in your business plan, it’s a role not often understood. The choice of registered agent, like the choice of entity type, formation state, and entity name, is one of the most important decisions that your business should make from the beginning.
Unfortunately, choosing a registered agent is not always given the appropriate level of attention that’s needed, and it can be a costly mistake. Many companies appoint an individual to fulfill this important role, which can introduce several legal risks to the business.
An expert registered agent with the right service and technology for a small business offers several advantages over appointing an individual as a registered agent.
Set Yourself Up for Success
Whether a startup or a growing small business, having a plan in place is an important step towards setting your business up for success. It’s a relatively small investment with a return that can preserve your financial and reputational well-being for years to come. Being prepared, both from a strategic and regulatory compliance perspective, will help safeguard your business, wherever the future takes you.