Part 1: Small Home-Based Business Consultation Needed
Howdy:
Hmmmm. Some of your questions can be answered in a forum like this (which my colleagues have, as usual, completely failed to do); while some require review of documents. I'll try to keep the same order you have.
Also, I have to split this up into two posts, as there is a space limit and my answer exceeds it.
1. Risks
Some of the risks involved in starting a new business are common to all. (I hope you've researched the industry, evaluated the need for the business, checked out the competition, and have written a well thought out business plan!)
Some risks are industry specific (aging or fashion change of seasonal merchandise in a retail store, for instance).
The main risk is that you’ll invest in a large inventory, and then not be able to move it (assuming this is a retail-type business).
Also, if this is a retail business, you run the risk of selling something that is defective, which results in an injury.
2. Copyrights
I’m not sure about this question. I believe you are worried about infringing someone else’s copyright. The main way to avoid this is through education. However, in one instance, a consulting business called “Entrepreneur Now!” was sued by Entrepreneur Magazine for copyright infringement, with the magazine claiming a copyright on the word “entrepreneur”. And, the mag won! I don’t know where that leaves us with the use of Inc….
The magazine case notwithstanding, most infringement problems are easy to avoid. Be sure to avoid using trade names. Of course, if you sell a name product, you have the right to use the name in marketing that product.
If you’re worried about your own copyrights, that takes a lot of diligence. Be sure to register your trade name, and any trade or service marks. It’s easy to do with forms you can download from the Patent and Trademark Office’s website.
3. Other protective documents
The main document you have to protect your rights and interests is your contract. While you can buy form contracts from an office supply store or a website, it’s best to spend the money to have a lawyer draw up a form specific to your needs. This is a cost you incur once to get the form, but after that your only cost is the reproduction.
From a personal liability perspective, you’ll want to form a business entity. And, the choice of form or the choice of forum depends on the type of business you have. If you have a business that is completely web-based, you may want to consider forming in a State like Nevada, where the maintenance costs are very low. If you have an actual place of business, then you’ll want to form in that State … likely California.
Formation of the entity isn’t a simple decision, and you’ll really need a good advisor for that.
