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Tackling the Tedious Parts of Starting Your Own Law Firm
When launching a law firm, it’s easy to get caught up in the excitement of it all. But neglecting the “boring” necessities can lead to trouble down the road. Don’t let your business fail due to legal problems or operational mistakes! To set your business up for sustainable, scalable growth, make sure you spend some time on the technical, financial, and legal requirements involved in launching a business. Ferguson & Ferguson shares some great tips to help you knock out the boring essentials so you can get your law firm up and running as soon as possible!
Choose a Business Structure
One of the first steps involved in launching a business is choosing a business structure and registering with your state. Deciding on the legal structure of your law firm is no small matter. The structure you choose will determine many aspects of your business, including the amount of paperwork, how much you will owe in taxes, and your level of personal liability. A common choice is to set up a PLLC. This will help to protect your personal finances in the event of a business-related financial challenge.
Establish a Solid Bookkeeping System
Poor bookkeeping practices will get out of hand before you know it. Without good financial records, you will have a really tough time doing your taxes and evaluating the success of your new firm. Start by separating your business and personal accounts to make bookkeeping easier. Next, invest in the best accounting software and a simple payment solution to streamline client billing and automate your bookkeeping process. You can use your best invoice template to create attractive and informative invoices for your clients. Beyond making your business more efficient, good bookkeeping will also help you avoid issues with late payments and chargebacks!
Set Realistic Financial Goals
Deciding how much money to pay yourself can be tricky as a small business owner. There’s a fine line between undervaluing yourself and taking too much. Ideally, you would pay yourself an amount that properly compensates you for the work you’re putting in while leaving enough to grow your business. Consider matching the amount you would earn working for another law firm!
Alternatively, Financially Simple recommends using your personal budget to determine how much you should pay yourself. This is the key to juggling your personal and business financial goals at the same time. Come up with your ideal personal budget, allocating 50% of your spending towards needs, 30% to wants, and 20% to savings. Based on this budget, you should be able to calculate how much money to pay yourself from your business.
Decide How You’re Going to Pay Yourself
When you separate your business from your personal finances, you will need to establish a way to pay yourself. The most common way to do this is through an owner’s draw. An owner’s draw involves taking money out of your sole proprietorship, partnership, or LLC for personal use. Typically, business owners do this by writing business checks to themselves and depositing the funds into their personal accounts.
Pay Attention to Cybersecurity
Overlooking the importance of cybersecurity is one of the most common mistakes made by small business owners. And as aNetworks notes, this mistake can cost you big time! A single cyberattack could shut down your business, trigger lawsuits, or hurt the reputation of your firm. What’s more, cybercriminals often target small businesses because they tend to be more vulnerable than large, established corporations. Learn how to protect your firm so you can watch it grow into a thriving business!
Are you ready to start your own law firm? Don’t neglect the boring parts! All of those mundane technical steps will help you build a strong foundation for your new business.
Ferguson & Ferguson attorneys at law specialize in personal injury, divorce, bankruptcy, and domestic relations cases. Call (256) 534-3435 today for your free case review!