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Business Development

Legal steps when launching a startup or small business

Like many other clients, the legal needs of startups and small businesses (SSBs) change over time. Attorneys who serve SSBs must know what legal steps to take based on their client’s situation. To do this easily, lawyers will benefit from understanding where clients are within the business lifecycle.

The business lifecycle divides a company’s development into five stages: launch, growth, shake-out, maturity, and decline. Since each stage requires different legal action, SSB attorneys should be familiar with each stage to support their clients. For more details on each stage, check out our guide to serving SSBs.

The launch stage of the business lifecycle has important legal steps associated with it. This phase is vital to a business’s success as it lays the groundwork for future decisions. You will help build a solid foundation for your client by knowing what the launch stage is and the legal needs linked to it.


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What is the launch stage of the business lifecycle?

The lifecycle of every SSB begins in the launch stage. Here, the company develops to showcase its offering. More specifically, the launch stage includes:

  • A new product or service: The idea is fully constructed. The product or service is produced and distributed.
  • Small amounts of sales: The brand isn’t well known, so not many people are buying your client’s offering.
  • High startup costs: The business is probably seeing little profit. This is due to higher input costs than revenue coming in.

In the launch stage, the product or service is finally available to the public. Especially for new SSB owners, this stage can be risky. Lawyers must provide support during this time to encourage their clients through this difficult phase.

What are the legal steps of the launch stage?

During the launch stage, you will guide clients through decisions that build the foundation of their company. These actions will critically impact the future of the business. You might help your SSB client with:

  • Choosing which type of entity they should create: You should help your client choose their entity type. It’s important to consider differing tax treatments, investment benefits, and decision-making formalities between options.
  • Filing for trademarks, copyrights, and patents: You can help protect your client’s brand, products, and services. Your client will have an advantage by doing so.
  • Working across state lines: Different states have different laws. If your client is in this situation, you may need to think about taxes, licenses, and labor laws.

These legal issues are likely overwhelming and unfamiliar to your client. You can help your client feel more supported by clearly explaining their options and how they would affect the business.

Lawyers should know what the legal steps of the launch stage are. Having this knowledge allows you to best guide your client through their business venture. For more comprehensive information on the launch stage, and the other parts of the business cycle, check out our guide to serving startups and small businesses.

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