Seven Overlooked Items When Starting A Business
Are you thinking about starting your own business? Many people are discovering their entrepreneurial spirit and starting a new venture with the hope of making it a success. While it has become easier than ever to make a start in business, it is just as easy to put an end to it. The majority of businesses fail within a year or two of opening.
The foundations you create for your business will determine its future. Read on to find out some of the things that are overlooked when beginning a business. These factors might just make the difference between success and failure.
The Reason for Getting Into Business
Making money shouldn’t be the only reason you start a business. Always keep your goals and values in mind when working on your business and figure out what you want from your work life. Would you like to help others in some way? Are you aiming to reduce the number of hours you work, so you can spend more time on the things that matter the most to you or your family? Maybe you want to be able to go on vacation more often during the year, help out with an aging parent, or simply relax more? Think about the type of lifestyle you want for yourself for both the short and long term.
A Clear Plan
Can you in one sentence define your mission? Don’t just jump straight in without thinking about your mission for the business. The research stage is where many entrepreneurs fail to do a thorough job and end up paying dearly for it. This means market research, business plans, consulting with others. Look at your plan objectively and ask yourself, is this a viable business?
Opening A Business Account
Some feel that you don’t necessarily need a business bank account, but you really need to separate your personal and business transactions. Depending on your view this could mean simply opening another personal account or a business account. Having separate accounts will make things a lot simpler when figuring out how your business is doing and double checking your accounting records.
You need an efficient method of recording all your transactions for tax purposes and so you personally know the financial health of your business. This is one of those business activities that doesn’t directly help grow and move your business forward, but is absolutely essential to get done. Learn about balance sheets, cash flow statements and profit & loss accounts early on.
Understanding All The Risks
Starting your own business can be very rewarding, but you also need to appreciate all the potential risks. There are not just financial risks, but also personal risks. A few things to keep in mind:
- Funding. How much money do you need to start your business? Will you be able to have sufficient cash flow to keep the business afloat in the early years?
- Liabilities. Understand all the legal implications of your actions. If you’re a sole proprietor you are personally responsible in the case of a lawsuit.
- Relationships. Particularly at the beginning, you will end up spending very long hours on your business. This can put a strain on relationships with family and friends.
Your Strengths And Weaknesses
You need to be realistic about what you can and can’t do. Especially in the current economic environment, you need to identify your strongest skills and use them to define what makes your product or service different from all your competitors. As you are not yet established, you need something unique to get the attention of your first customers.
The Future Of The Business
You only have a limited number of hours in a day. Take into consideration how you will practically manage the growth of your business. Many new entrepreneurs are hesitant about the possibility of employing people. Depending on your business, this may be a necessary step if you ever wish to move your company forward.
Working on your own can lead to spending too much time on the day to day and repetitive tasks. These daily tasks have to be done, but aren’t helping to grow your business either. Solve this issue by working with a partner or hiring employees to free yourself up to be the innovator, rainmaker, or both.
Have you started any businesses of your own?
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