With many new businesses struggling and failing this year, new entrepreneurs need to be strategic in protecting their companies. What’s more is that businesses in a competitive commercial landscape like California must deal with additional challenges like more taxes and a higher cost of living. However, there is also a wealth of resources available to small businesses in the state that new entrepreneurs should be tapping into.
Below, we’ll be covering some of the ways in which founders in California can protect their new companies.
Explore options for capital relief
In a previous California Business Journal article we featured the different ways to get the money you need to get your business off the ground. Financial opportunities such as small business loans, personal loans and sponsorships are all around especially if you know where to look. The state of California understands that small businesses drive economic growth. Thus, they’re actively offering new initiatives to protect them amidst the COVID-19 pandemic. The California Infrastructure Economic Development Bank (IBank) provides loan guarantees for small businesses that aren’t eligible for federal relief. Last August they also announced the California Rebuilding Fund, a public-private partnership that supports small businesses located in historically underserved areas of the state.
While traditional markets may be closing making it hard to get a business off the ground, there are other opportunities opening up. Knowing these different networks that support businesses while also helping people during the pandemic may spell the difference between your company’s success or failure. For example, the state of California created a lifeline for restaurants and the food service industry through launching Great Plates Delivered. This meal delivery service caters to seniors who might be more challenged to go out and buy food. The delivery service has partnered with 735 food service providers, giving an opportunity for the food industry to stay afloat during this period as well.
Set up a limited liability company
Your business’ legal structure could also help in protecting your new company. For new entrepreneurs, the choices for a business structure include sole proprietorships, partnerships, corporations and limited liability companies. Compared to other legal structures, a limited liability company can help in giving your business security during tumultuous times. An LLC ensures that your personal assets are kept separate from your business in the event of any legal issues. The IRS details that an LLC is a business structure allowed by state stature, meaning each state may have its own regulations. Setting up an LLC in California is a simple process that can be done in six steps. To avoid being personally responsible for business debts and liabilities, consider a business structure that allows for the company to exist separately from its owner.
Be up to date with business regulations
California has always been progressive with new business regulations. Being aware of the complex and shifting regulatory landscape is important for any new entrepreneur in the state. In 2018, the California Consumer Privacy Act requires businesses to take the necessary measures to protect consumer data being collected, analyzed and used. Failure to comply with new business regulations such as these could be the negative downfall of a new company, especially those that have largely been operating online. As an entrepreneur, being compliant with business regulations should be a top priority.
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