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Seven Overlooked Items When Starting A Business

Updated on March 23, 2013
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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.

Efficient Accounting

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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    • KoraleeP profile image

      Koralee Phillips 4 years ago from Vernon British Columbia Canada

      These are excelent tips for someone thinking of going into business for themself. I have found that knowing your strengths and weaknesses are really important. Having this knowledge really helps with deciding what work to outsource and what to do yourself.

      As well, accounting is a really big one. A lot of people don't think of that aspect and how important it is is, especially for paying taxes. I read a lot of forum threads where people are looking for last minute advice on this subject.

      Great up and voting up and useful!

    • Express10 profile image
      Author

      H C Palting 4 years ago from East Coast

      I know there are people that are overwhelmed with all the different things that must be done and I also know there are some people that have their own businesses that love to wait until the last minute to deal with their taxes.

    • Frank Atanacio profile image

      Frank Atanacio 4 years ago from Shelton

      Express these are good tips for young get and go types.. I know know sometimes their eagerness may have them overlook the importants of such a itemized list like you have here expree..:)

    • Express10 profile image
      Author

      H C Palting 4 years ago from East Coast

      The one that really gave me hell was relationships. Friends and family couldn't really grasp what I was trying to accomplish, getting a better work life balance and better work compensation balance :)

    • Lady_E profile image

      Elena 4 years ago from London, UK

      Very vital points - Many people are opening small businesses now. This will be very helpful. I will share on Twitter.

      Thanks.

    • Express10 profile image
      Author

      H C Palting 4 years ago from East Coast

      I found these things to be useful reminders for myself and am glad that you have too. Thanks a lot Lady_E.

    • JPSO138 profile image

      JPSO138 3 years ago from Cebu, Philippines, International

      They are indeed very useful information not only for me but for all of those who wish to start a business and those who already have one. Up for this hub...

    • Express10 profile image
      Author

      H C Palting 3 years ago from East Coast

      Thanks so much for taking your time to read. Some of these things are common sense, others may not be, either way it's good to think about them when starting even the smallest of businesses.

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