Austin, Texas, A Great Place To Start A New Business

May 03, 2011 (Press-News.org) Austin, Texas, A Great Place To Start A New Business

Austin is a great place to start a business. Austin is the U.S. market that is most conducive to the creation and development of small businesses, according to the latest On Numbers rankings.

They used a six-part formula to analyze the nation's 100 largest metropolitan areas, searching for the places that offer the best climates for small businesses.

The ranking is based on:
-Population: The Austin area added 286,000 residents between 2004 and 2009, an increase of 20.2 percent. The only metro to grow faster was Raleigh at 22.8 percent.
-Employment: Austin's job base expanded by 9.3 percent between 2005 and 2010, the third-fastest upswing in the nation.
-Small-business growth: The number of small businesses grew by 1.5 percent in Austin between 2007 and 2008, the latest period covered by official statistics. No other market did better than 0.6 percent.

While it is clearly a great place to do business, as a small business owner, you should ask yourself a few questions as you embark on your dream of starting your own business. The two popular business structures, the S-corporation and the limited liability company (LLC) can help protect you from personal liability.

But do you have any idea how they do that? Business litigation could threaten your company and even your personal finances at any moment, consider your business' structure to be insurance against the unforeseeable. Compare this to how wise property owners carry fire insurance, they don't expect a catastrophic fire but the risk is too great to ignore the possibility.

Low And Zero Are Not The Same

The relatively low risk of a catastrophic suit against your business may not seem like a real problem, but perhaps it is a symptom of a larger issue. Did you buy your incorporation papers and business contracts from an office supply store? Have you read them and do you understand them? And do you understand how they work when something goes wrong?

How do your bylaws work? Do you have an operating agreement or membership agreement? Do you understand how to maintain corporate formalities? Do you have to issue stock, and if so, have you? Do you use your personal checking account to pay for business expenses? Have you ever paid personal expenses out of your company's bank account?

If you have, you potentially open yourself to personal liability should someone initiate business litigation against your company. You also leave your business assets to be deemed marital property in a divorce.

An attorney is not just someone to call when disaster strikes. Find a knowledgeable business attorney. Tell them you want to understand how the documents work and any changes that you should make. Your legal documents form the superstructure of your business, having an attorney review them can help ensure they can support your business and help it grow.

A sprinkler system is expensive, but, should a fire start, a sprinkler system can stop it before it does much damage. Lawyers, like a sprinkler system, require some upfront costs, but speaking with one before disaster strikes is similarly less expensive than rebuilding from smoking ruins.

Article provided by John McDuff, Attorney at Law
Visit us at www.johnmcduff.com/