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Things to Do Before Starting Your Own Business

Updated on July 24, 2013
Take these steps before starting your own business.
Take these steps before starting your own business. | Source

Starting your own business can sound like an exciting prospect. You can make your own hours and come and go as you please. No boss will be breathing down your neck or tell you what to do.

However, you probably know that most new businesses fail in the first year, and you want to make sure that you avoid the same fate for your endeavor. What can you do to make sure that your business starts off in a healthy way?

Before you hand in your resignation to your current employer, you can start preparing to get your business off to a healthy start. In this way, you will be better able to know what is in store for you, and you can ensure that your business will start off in a positive way.

Save up some money

When you open a business, it may take some time for you to get clients and earn revenue. In the meantime, you still have to eat and take care of your living expenses. By saving up money for six months to a year's worth of expenses, you can make sure that you are able to give your business enough time to succeed. Don't forget that you will also need enough money to pay for any loans you obtained to get your business off the ground.

While you still have a job, save as much money as you can from each paycheck so you can build a proper cushion.

Line up your networks

You will need a network of suppliers for your business. Instead of waiting until you open your business, you can scout out prices and find the best places to purchase your supplies.

You will also need a network of people who have expertise in the field. Meet with them and learn as much as you can before you quit your job. Find out about the positives and negatives of the business, how to avoid the pitfalls of the particular business or industry, and how to grow the business most efficiently. You may be able to find retired professionals who can mentor you and help you start and grow your business successfully.

Be sure to take the time to consider your family's needs, and prepare them for the extra time you will spend at your new business in order to make it successful.

Create a business plan

You will need a business plan to present to the bank if you want to borrow any start-up funds from the bank, but even if you don't want to borrow money, it is a good idea to create a formalized business plan. This will help you think about the various aspects of the project, including finding a good location, doing a market analysis to make sure that the business will do well in that location, considering the competition, and considering a pricing strategy. It will help you learn about your strengths and weaknesses before you start.

Many people have a passion for a particular industry, but forget to take into consideration that they will have to do the billing, bookkeeping, sales, and customer service in addition to producing the goods and services that are the mainstay of the business. If you are not competent in these tasks, you will want to make sure you include hiring out for these services in your business plan.

Open sign
Open sign | Source

Learn about the business and industry

In order to save money, you may want to take some classes to learn about the topics that are your weaknesses. In this way, instead of hiring out the work, you can learn how to perform these tasks yourself as well. Taking some accounting or marketing classes may help you learn strategies to start your business on a more successful course.

You also want to learn about all aspects of the industry and business as you can. Besides taking classes, you can also talk to as many people as you can that are in the industry, read industry journals and be as informed as possible about industry trends and new developments. There are many free resources including SCORE, SBA, and the Women's Economic Development Agency where you can talk to industry professionals and veterans who will help guide you.

Your new start-up

Starting a business is a risky proposition, and you can reduce your risk by trying it out on a limited basis before you quit your regular job. By following the advice in this article, you will be sure to:

  • save up some money
  • line up your networks
  • create a business plan
  • learn about the business and industry

All of this knowledge and the cash will help you consider your strengths and weaknesses, and find ways to enhance your strengths while minimizing or finding ways around your weaknesses. The time you take to do these tasks will also help show whether you have the determination and motivation it will take to grow your new business.

Comments: "Things to Do Before Starting Your Own Business"

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    • Millionaire Tips profile image

      Shasta Matova 3 years ago from USA

      Yes I have seen the show, and it is amazing how much money people invest in their business. It makes sense sometimes, but in some other cases, it is a huge risk that may not pay off in the long run. You do have to be careful that you don't spend more than you can afford, but sometimes it can be hard to judge without an expert outside opinion. Thank you for your comment.

    • Torrs13 profile image

      Tori Canonge 3 years ago from North Carolina

      Have you ever watched the show Shark Tank? I find it so fascinating how much money some people put into their product or business initially. I know that getting started requires an investment of some sort, but some of the people have taken out mortgages and other large amounts for products that aren't really getting off the ground. I feel like I would want to test the market first before putting that much money into something. I'm just not a big risk taker I guess!

    • Millionaire Tips profile image

      Shasta Matova 4 years ago from USA

      Thank you Rebecca. Network is definitely something you can do before starting your own business, and since it takes a long time to build up connections with potential customers, suppliers, and other people in the industry, the earlier you start, the better.

    • Rebecca E. profile image

      Rebecca E. 4 years ago from Canada

      good solid advice. Well done, I have to say that networking is a must.

    • thelyricwriter profile image

      Richard Ricky Hale 4 years ago from West Virginia

      MT, these are some great tips. I founded Hale Associations a few months ago, we do freelance SEO services. Your absolutely right about everything. Business plans are very important as well as your network. Appreciate the tips and advice. Voted up, useful, interesting, and tweeted.

    • Millionaire Tips profile image

      Shasta Matova 4 years ago from USA

      Thank you for your comment and insight F Slovenec. Having a marketing person who is a good writer with SEO knowledge will certainly help you grow your business.

    • Millionaire Tips profile image

      Shasta Matova 4 years ago from USA

      Thank you for your comment and insight jainismus. Keeping the customer in mind is a very important requirement in any business, and particularly in a new business.

    • FSlovenec profile image

      Frank Slovenec 4 years ago from San Francisco, CA

      The thoughts are good. Also need to add become an expert in social media. Become or have a available a good writer and SEO person to write articles about the unique value you bring to the marker then do the SEO to drive traffic...the world has changed. The items you mention are true, however this is the key to success. If the new business is not on the internet with a good position it isn't.

    • jainismus profile image

      Mahaveer Sanglikar 4 years ago from Pune, India

      Millionaire Tips,

      All the tips you have shared are very useful for those who want to start a new business.

      Beside these things, I think that one should learn about customer relations and customer satisfaction, which is very important in these days of competition.

      Shared this Hub with my Hub followers.

    • Millionaire Tips profile image

      Shasta Matova 4 years ago from USA

      Thanks earnforlife. You're right, you do need to know what to expect and be ready for unexpected roadblocks and challenges before launching into starting your own business.

    • earnforlife profile image

      earnforlife 4 years ago

      Great article. Starting a business is definitely not easy. The most challenging parts are financing and planning. There are things to consider such as taxes and licenses, government regulations, terms and requirements, safety, employee rights, terms and contracts, contractors, suppliers, competition... the list can go on and on. Even after implementation, you may find that unexpected challenges come into play. Finally, many people are surprised that after spending so much time, effort and money; they do not turn over a profit after the first few months. It takes time to grow a business. It can be a rewarding venture, but like with most good things, it takes a lot of hard work and determination to succeed.

    • Millionaire Tips profile image

      Shasta Matova 5 years ago from USA

      Thanks toknowinfo. Starting a new business does seem easy until you think through all of the different aspects of it.

    • toknowinfo profile image

      toknowinfo 5 years ago

      Very good tips for starting a business. There is always more than it looks to having a successful business and your practical hub helps get people off to the right start.

    • Millionaire Tips profile image

      Shasta Matova 5 years ago from USA

      Thank you Jephiter. I hope your new venture is a resounding success!

    • Jephiter S Ondari profile image

      Ondari S Jephiter 5 years ago from Nairobi, Kenya

      So helpful.... more especially because I am planning to start a business this year. I have have not started any before but I want to be vigilant enough to see if I can set off and go.

      Thank you

    • Millionaire Tips profile image

      Shasta Matova 5 years ago from USA

      Thanks point2make. That's true, we often fall in love with the idea of opening our own business without thinking through what that actually means. Planning is the key,

      Thanks cygnetbrown. Having enough money not only to start up your business but also keep you afloat with living expenses while you are building revenue will help make sure that you don't quit early just because you don't have enough cash.

      Thanks Ruchira. I would love to link up with your article.

      Thanks Kelly. I hope these tips help you a great deal with your banquet hall and catering service business. I wish you the best in your endeavor.

    • kellyteam profile image

      Willette 5 years ago from Michigan

      This is great. Well organized, detailed and useful information. This will be printed and used as template for setting up my banquet hall and catering service business. Actually its my husband. Thanks for the sharing these great tips. Thumbs up, useful awesome and a share. God Bless!

    • Ruchira profile image

      Ruchira 5 years ago from United States

      Great advice Shasta.

      I have tried to cover a similar topic talking about finances for start ups. Let me know if you want to link up.


    • cygnetbrown profile image

      Cygnet Brown 5 years ago from Springfield, Missouri

      Great advice. Especially #1. I have heard that the reasons most business fail during the first year have everything to do with not having enough funds to really get started.

    • point2make profile image

      point2make 5 years ago

      Some very good sound advice...well done. Too many times we fall in love with the idea of opening our own businesses but we don't always do our "due diligence" . Owning your own business can be a "dream come true" but fail to plan properly and that dream could quickly become a nightmare. Good hub voted up.