Are you considering becoming one of the 514,000 U.S. entrepreneurs starting a new business every month? In order to be successful in this endeavor, there are many steps to take and concepts to become familiar with that will be crucial for your survival. The Small Business Association claims that 51% of start-ups last less than 5 years. The list below itemizes the most important considerations you must take into account when deciding to start your own business. By paying attention to these key pointers, you can help keep your start-up from becoming one of these statistics!
- Write a business plan. There may be a million thoughts in your head regarding your unique product or service, how you plan to differentiate yourself, and what your ultimate company brand will be, but it is imperative that this is spelled out so that potential investors, creditors and customers can understand and connect with your ideas. From detailing marketing strategies, projecting income and growth, to describing how the business will be structured, a business plan is a critical element in the start-up process.
- “Associate yourself with people of good quality if you esteem your own reputation” – George Washington. Choose a strong network. Surrounding yourself with strong business partners can help you make good decisions, answer difficult questions, build your reputation, and bridge many of the gaps on the path to success. Whether you need a C.P.A., insurance advisor, banker, or lawyer, constructing these relationships to support your business is tremendously important.
- Obtain the capital needed to initiate and perpetuate your business. Possibilities include personal investment, outside investors, and debt financing. In your business plan, project the costs necessary to begin operations. Calculate how long it will take before your business revenue can cover for this activity. What will it take to hold you over until that point? What is the most economical way to obtain funding? If equity is the best method, how can you market your business to potential investors? If taking out a loan is an option, what is the best source of financing? How much and what interest rates can you afford? This is an area where you should seek guidance from your network, so you get what you need and don’t exceed your capacity for debt or equity.
- Register and license your business. One of the numerous services that HeimLantz, P.C. can offer is help deciding what type of entity structure makes the most sense for your business. Judging whether to be a partnership, LLC or corporation is one decision that needs to be made correctly. Registering with the I.R.S. and state authorities to operate and be taxed as a business is vital as well. Tap into your network of resources to help you make the decisions that best fit your situation.
- Have a basic understanding of business terms and concepts. Don’t be caught mistaking one term for another, or forgetting to monitor certain activities. Distinguishing between revenue (the money earned from sales of products or services) and net income (the money remaining after costs and expenses have been subtracted from sales) is an example of two terms that are commonly confused. Knowing to keep track of expenses incurred, such as mileage and meals for business meetings, is one instance of an important record keeping step that is often overlooked. These missteps add up, so make certain you know to be mindful of them and others. Familiarize yourself with the language of business by reading on your own, or enrolling in a course, so that you can walk the walk and talk the talk.
This basic overview of essential steps for new business start-ups should help you to hit the ground running! Make sure to educate yourself as much as you can, and don’t be afraid to seek out help. Although the process of starting a business can be overwhelming, remember, “All glory comes from daring to begin” – Eugene F. Ware.