As with many clients, the needs of small and startup businesses (SSBs) change over time. Attorneys serving SSBs need to know the legal steps they should take based on each client’s unique situation. Lawyers can do this more quickly if they understand where their clients are in the business cycle.
The business cycle divides the development of a company into five stages. These are launch, growth and shake-out, maturity, and decline. SSB lawyers should understand each step because each requires a different legal action. Check out our guide on serving SSBs for more information about each stage.
Legal steps are essential for the launch phase of a business’s lifecycle. This stage is crucial to a company’s success as it sets the foundation for future decisions. Understanding the launch phase and its legal implications can help your client build a solid base.
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What is the launch stage of the business lifecycle?
Launching an SSB is the first stage of its lifecycle. In this stage, the company creates a showcase to show off its product. The launch stage is comprised of the following:
A new product or service is ready to be built: the idea has been fully developed. The product or service has been produced and distributed.
The brand isn’t known, so few people buy the client’s product.
High startup costs: The company is likely to see little profit. This is because input costs are higher than the revenue.
The product or service becomes available to the general public during the launch phase. This stage is precarious for new SSB owners. Lawyers should support their clients to help them through this challenging phase.
What are the legal steps in the launch phase?
During the initial launch phase, you’ll guide your clients in making decisions that will form the basis of their business. These actions have a significant impact on the future of the company. Your SSB client might need help with the following:
Help your client decide which entity type to create. Consider the different tax treatments, investment benefits, and decision-making procedures between options.
By filing for trademarks and copyrights, you can protect your client’s brand, products, and services. This will give your client an advantage.
Work across state borders: Different states have their laws. If your client falls into this category, you may have to consider taxes, licensing, and labor laws.
Your client will likely be overwhelmed by these legal issues and needs to become more familiar with them. Your client will feel better supported if you explain their options in detail and show how they could affect the business.
Lawyers need to know the legal steps involved in the launch phase. This knowledge will help you guide your clients through the business venture. Check out our guide for more information about the launch stage and other business cycle phases.