Starting a business is exciting—but it’s also full of landmines. Between the paperwork, legal decisions, and financial planning, it’s easy to overlook the little things that can turn into big problems later. At The Law Offices of Paul H. Appel, we’ve seen too many entrepreneurs run into trouble early on because of avoidable missteps.

Let’s walk through five common mistakes that can cause headaches when you’re forming a new business—and how to steer clear of them.

1. Skipping a Solid Legal Structure

One of the biggest business mistakes we see? Not choosing the right business entity. This decision affects everything—from taxes to liability to how you raise money.

Some folks just default to a sole proprietorship or an LLC because it sounds easy. But each option has pros and cons. Forming a corporation might make more sense for long-term growth, while a limited liability company gives flexibility and protection for startups.

Talk to a business attorney before you register. Don’t fall into the trap of rushing this part—it’s a classic pitfall in registering a new company.

2. Not Having a Clear Operating Agreement

Even if you’re going into business with someone you trust, you need everything in writing. This means setting up an operating agreement or partnership contract that spells out ownership, roles, how profits are divided, and what happens if someone wants to leave.

Skipping this? Big mistake. Verbal agreements lead to misunderstandings, and those often turn into lawsuits. It’s one of the most common new business mistakes—especially in family-run or friend-based ventures.

3. Mixing Personal and Business Finances

This might seem harmless at first. You use your personal credit card to buy office supplies, or deposit business income into your personal account. But over time, it creates chaos—and can even destroy your liability protection.

If you’re forming an LLC or corporation, you need to treat it like a separate person. Open a business bank account, get a business credit card, and never mix the two.

Failing to separate finances is a sneaky startup business problem that can really bite you later—especially if you ever get audited or sued.

4. Ignoring Licenses and Local Rules

Here’s another one that trips people up: assuming a state registration is all you need. In reality, you might also need local business licenses, permits, zoning clearance, or professional certifications, depending on your industry.

If you skip this step, you could face fines, delays, or even forced shutdowns. This is one of those mistakes to avoid when starting a business that can derail everything you’ve built—fast.

A quick consult with a local business attorney can make sure all your boxes are checked before you open your doors.

5. Not Protecting Intellectual Property

Your business name, logo, product designs, website content—these are all assets. But too many startups forget to lock them down legally. If someone else grabs your name or copies your branding, you’ll be fighting an uphill battle trying to reclaim it.

You don’t need a massive budget to start protecting your brand. Start with trademarks, copyrights, and contracts that clarify ownership of creative work. These steps help avoid one of the most overlooked common business mistakes.

Set Your Business Up for Success

Starting a business isn’t just about the idea. It’s also about doing things the right way from day one. At The Law Offices of Paul H. Appel, we help new business owners avoid legal and financial surprises with personalized advice and thorough planning.

Whether you need help choosing a business entity, drafting contracts, or registering properly, we’re here to guide you through every step. Avoid the stress that comes with startup business problems—and build a stronger foundation for your future.

Ready to get started? Let’s make sure your new business starts on solid ground.