All the signs are good. It’s an exciting time but also a make or break threshold.
Often when a fledgling business reaches this point the people running it are still working full or part time for other people. The decision to cut off from the monthly pay cheque and throw all your efforts behind the new enterprise, and rely on it to pay the mortgage, is one of the hardest calls to make.
Sometimes that call is made too soon, and money runs out before the business has had a chance to get properly under way. Other times, the hard decision is postponed too long, and the gang of excited entrepreneurs has turned into a group of disillusioned former friends, under pressure at their real jobs and swallowing wasted time and sunk costs. The tough reality however is that until that step is taken most businesses are little more than ideas and potential career distractions.
But before you make the decision to quit the day job you have to be satisfied that the business can sustain the financial demands you are going to place on it. Unless you’re lucky enough to have funds available to invest, that generally means working for little or nothing for a substantial period. And it’s essential also to make provision for early stage business costs.
Those include ensuring you have the right advisors to give you the necessary building blocks for compliance and business durability. Accountants can advise about tax compliance, payroll and financial record keeping. Lawyers can provide terms and conditions of trading so you comply with your legal obligations, and so the contracts you make with suppliers and customers protect your interests in a clear and enforceable manner. Lawyers can also talk to you about intellectual property rights in the business.
Securing these rights, whether patent rights in new inventions, rights in designs, trade marks to protect new brands or confidentiality rights in new information, is essential to secure the value you’ve created in the new business.
Most new businesses are about ideas, new products or disruptive models – and so if these rights are not identified, secured where possible and policed, you can lose control and the right to exploit the very things you’ve worked so hard to develop. Leave the intellectual property conversation too long and some rights can be lost, and others can be compromised. Hardest of all, you could find yourself unwittingly infringing someone else’s rights and creating liabilities rather than assets.
As in so many things, timing is essential. Talk to your advisors early – ideally, before you make that leap of faith – and let them help you size up the early stage requirements and costs, check out the potential risks and weigh up the pros and cons – and then, all the best of luck.
For further help or advice, please contact Head of Intellectual Property Clive Lawrence on 0113 280 2217 or firstname.lastname@example.org.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.