5 Mistakes New Businesses Make (and How To Avoid Them)
YAY, you started a business! You finally decided to quit your 9-5 and make your side gig your main gig. I love that for you.
But I’d be remiss not to tell you the most common mistakes that I see new businesses make.
I want to preface this by saying… if you’re currently making these mistakes, it’s not your fault.
No one is out there making sure that new business owners know all of the correct steps to take when they jump into the world of entrepreneurship.
It’s sort of like a rite of passage for business owners to experience trial and error and figure it out along the way.
And while I definitely had to experience that for myself, I believe that new business owners CAN start on steady ground and avoid some of the overwhelm and heartache that can come with starting a business from scratch.
The good news? YOU can be one of them since you were lucky enough to find my account and stumble upon this blog post.
My goal with The Boutique Lawyer is to make the sometimes daunting legal world feel more approachable by providing growth-minded entrepreneurs (like you!) with everything you need to protect your brand, your profits and your life’s work.
It’s time to stop avoiding the scary business things that you don’t understand and give yourself a legal leg up so you can spend MORE time doing the thing you set out to do in the first place.
So, if you’re ready to make that happen, take note of the 5 most common mistakes I see new business owners make and implement the quick actions provided to avoid them!
5 Most Common Mistakes New Businesses Make (And How You Can Avoid Them)
1. Not having a legal entity set up
Hey bestie, there’s something you need to know about starting a business… you HAVE to make sure it's legal in the eyes of the government.
I know it seems like everyone and their mother are selling things online these days, but I’d be willing to bet that more than half of those people aren’t doing so legally.
You can’t just launch a website and take payment via Venmo, okay? You MUST take it a step further by setting up a legal entity.
And if you’re like, “what does that even mean?”, I’ve got you!
A legal entity in the business world refers to an organization that is recognized as having legal rights and obligations, separate from its owners or members. It means you can enter into contracts, own assets, incur debts, sue, and be sued in its own name.
The most popular types of legal entities that you’ve probably heard of before include, corporations, limited liability companies (LLCs), partnerships, and sole proprietorships.
Each type has its own characteristics in terms of liability, taxation, management structure, and legal requirements.
The main purpose of establishing a legal entity is to separate personal assets from business liabilities, limiting the personal liability of the owners or shareholders in case of legal issues or debts incurred by the business.
QUICK FIX ACTION ➡️ Grab the TBL Roadmap to easily and legally starting your LLC!
2. Using personal bank account for business purposes
This one is so common that it literally hurts and I would confidently say that at least 90% of business owners that have ever existed have made this mistake – including myself!
And trust me, I really do get it! When you’re first starting a business, you don’t really think about all of the “businessy” things quite yet… like taxes, bookkeeping, etc.
Instead, you’re in the exciting stage and have lots of dreams and goals for what the business can be.
But then, one day you realize that business owners have to pay QUARTERLY taxes… and you’re like, “wait… I have to give HOW MUCH to the IRS right now??”
In that moment, the realization usually hits that you should’ve kept your business account and personal account separate so that you could properly save and allocate for business related expenses… like those quarterly taxes.
QUICK FIX ACTION ➡️ open a business account right away and make sure that ALL business transactions (including the money you make) flow through this account first
3. Not having a legally compliant website
Again, when you’re new to the business world, you’re usually just focused on getting things off the ground and onto the internet so that you can start marketing yourself and selling your offers.
And I’ll admit – I love a girlie who is on a mission and is willing to be scrappy and make things happen.
But what I don’t love? Websites that aren’t legally compliant. 😩
Because here’s the thing: you could have the most amazing product or service in the world and be rolling in the dough, but none of that actually matters until you implement certain legal agreements on your website.
In fact, if you fail to include those, you could actually be met with a wholeeeee lot of hefty fines and be forced to put your money back into the hands of the government.
QUICK FIX ACTION ➡️ make sure your website is legally compliant by implementing these 5 legal agreements!
4. Waiting until there’s a problem to get legal help
You know how the saying goes, “it’s better to have it and not need it than need it and not have it.”
Well, that rings true especially when it comes to having a lawyer or other legal professional in your corner right from the start.
And I know what you might be thinking… “Amber, you want me to hire a lawyer for my business when I’m barely even making money yet?!?!”
No, of course not! As a business owner myself, I know that you have to invest in things carefully.
What I AM saying is that it’s wise to get connected with a legal professional and have them as a resource that you can learn from every step of the way in your business journey.
QUICK FIX ACTION ➡️ Consider me your new legal bestie! Follow along on Instagram or take it a step further and join the Business to Brand Membership – the legal membership where you can secure your brand from the ground up without having to fork out the staggering cost of hiring an attorney for every move your business makes.
5. Not trademarking your name and brand identifiers
Ah, trademarking! Another one of those “businessy” things that you’ve probably heard about, but have decided it doesn’t apply to you right now.
Maybe you think that trademarking is something you only do when you’re more established. Or it’s something you do when you reach X amount of years in business.
But the truth about trademarking is that it’s NOT something that should wait, depending on the type of business you have.
At its core, a trademark is a unique identifier of your brand that helps consumers recognize your product or service offerings in the market and distinguish them from competitors.
It can be anything from your business name, to a signature product or offering, to a course name and includes both logos and wordmarks (names). You can also register design marks for design elements, as well as trade dress for things like product packaging.
Registering your trademarks can help deter potential infringers and can provide a mechanism for legal recourse in the case of infringement.
QUICK FIX ACTION ➡️ If you’re not sure if trademarking is something you should do right away, ask yourself:
If the answer to any of the above questions is “yes,” you should consider registering your trademark!
Because of the complexity of trademark law and the fact that registering a trademark incorrectly could cost you big time down the road, working with a trademark attorney to secure your trademark is always best. CLICK HERE to schedule a trademark consultation!
Protect Your Business and Brand Right From The Start
Moral of the story: start being proactive rather than reactive.
I get that this is easy for me to say, because I’m a lawyer. But luckily for you, I set out to create a resource where I can help you start treating legal as a leg up, together.
I wanted entrepreneurs to have a place (other than Google University) where they can go for quick answers on all things business ownership without having to fork over serious dough for 1:1 legal fees every step of the way.
So I created the Business to Brand Membership where I help creative entrepreneurs through legal business education create a rock solid foundation for their businesses and scale it without second guessing if they are doing it the right way.
Not only will you have access to an amazing community of entrepreneurs to bounce ideas off of, but you’ll also get:
✔️ Access to my library of videos full of legal know-how and how-to where I cover EVERYTHING you need to know to start and build your brand
✔️ Access to a private Facebook group where you can ask me and my team (and each other) questions, get feedback and find inspiration
✔️ Monthly office hours where you can pick my brain about your biz
✔️ Members-only pricing on everything else from The Boutique Lawyer
The best part? It’s only $29/month because I know that when you’re starting a business, you have to be smart with your spending.
So I’ve done my best to make it as accessible as possible for you!
Here’s to building a legally backed business from the very beginning. 👏🏼