What is the difference an experienced business formation attorney can make for your new company or medical practice in San Diego or across California?  New businesses and the entrepreneurs who create them are “the engines of job creation and eventual economic recovery,” according to a new study by the Kauffman Foundation. The study looked at census data covering 35 years recently, and concluded that nearly all net job creation across the country occurred in businesses that were less than five years old.

Even so, only about two-thirds of new small businesses survive two years and only half will survive five or more years, according to the Small Business Administration. What is the difference an experienced business formation attorney can make for your new company?

A big part of success in business is having the right business formation and a good business plan. San Diego business formation attorneys at the Watkins Firm have more than 40 years of experience helping to form thousands and thousands of companies here in San Diego and across the nation.  We know that the wrong plan, or no plan, usually sends new businesses out of business.

One of the top reasons that new businesses fail is that the founders do not have the right perspective and/or resources. They need to be positive and ready to embrace the risks involved in starting a new venture.  New business owners must be prepared for success as much as failure.  Continuing success will often require new infusions of capital from investors or joint ventures with other companies.

Pro-Tip: “You’re giving birth to a living creature that’s been recognized by the United States Supreme Court. And so what it means is birth is what we call capitalizing. And so you have these corporate documents and you have to decide on how much ownership will be and who owns what. Then you decide about what potential ownership there are. Reserve shares, I mean other ways in which people can own it. And then you capitalize it. Either you capitalize it with cash or you capitalize it with goodwill or a combination or a property.

But how you capitalize it can determine whether or not it’s a real company or you have all those protections of corporate veil and creditors and you’re personally shielded. So how you start it is very important. And thinking about it, we’ll send you on the right path to avoiding all kinds of pitfalls and trouble.

It’s hard to under-estimate the importance of the corporate veil – especially if you’re going to be doing some big business, you’re going to have big liability risks, but not personal liability risks. This is business.

And also you can have an entity that can be sold in whole or you can bring in investors. If you do everything right, you get to do all these things. If you get a big opportunity and you didn’t set your company up correctly, then you can’t have your friend with an extra million dollars invest in your company, or a huge industry competitor buy you out. You’ve got to rewrite everything, restructure everything and hope you didn’t make any mistakes.

And all of a sudden the opportunity to buy your company or invest in it doesn’t look so like such a good deal. And that person who’s got the investment money or that large industry giant will say, well, this person’s not professional. This person’s not really serious about doing business. And you’ll miss it all because you didn’t pay attention in the beginning when you formed a company.” – Dan Watkins, Founding Partner

Successful entrepreneurs say starting a new business requires avoiding distractions like job offers, and staying with the business and not throwing in the towel when bills pile up or customers are hard to come by.

What is the difference an experienced business formation attorney can make for your new company or medical practice in San Diego or across California? Consulting with the Watkins Firm when planning your business formation can make all the difference to position your new company for success.  We answer our client’s questions along the way.  We provide sound advice and counsel based upon more than 40 years of proven success.

We invite you to review our podcast Episode 34 – Business Formation as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.