Things to consider when starting a business
Did you know that home businesses are required to hold permits to operate legally in most countries? What do you know about corporations and registering intellectual property? There are some fundamental steps that every entrepreneur needs to consider before even considering the idea of starting a business.
The following steps can help you plan, prepare and manage your business. And although not all of these steps apply to all companies, they will give you an idea of what you need to pay attention and focus before venturing out into the unknown.
Write a Business Plan
The first and foremost action that needs to be taken before thinking about a business venture is the vital need of a business plan. It is paramount to lie the foundations of what’s to come in the future, and for that a business plan will help you with the focus and orientation needed for having the right start for your business.
But the business plan does not need to have all the answers; it suffices with being comprehensive in terms of information. A well-prepared and reviewed plan will help steer your business to grow. Try to think of your business plan as a living, breathing project. Divide it into mini-plans, one for marketing, one for the price, one for operations, one for human resources and so on. You can even include whether you need a business loan here, or if you plan to start with your own savings. Ensure that business promotion and domain names are included here as well, along with a comprehensible business generation plan.
Get business support and training
Starting a business can be a lonely task, but there are plenty of free resources that can help you get started. Check out what you can get from centres for small business development, from your local business support offering free tutoring, or from the chambers of commerce. These stages are important for market research and get the funding you need. There are usually government sites, such as, GOV.UK, with this type of information you to hit the ground running.
Know your financing options
You can use your savings, or even keep your full time job until your business is profitable, but if you’re looking for an external source of funding ensure the bank loan is suitable for your circumstances, your business finance has to be kept up to date at all times, so as to business tax are covered, and HMRC is aware of your existence.
Make sure you define a clear business finance structure. Are you going alone or are you planning to form an alliance/business partnership? Are you planning to incorporate your business? Some options may give you tax benefits. To help you determine the right structure for your business ensure you get the right help to cover these points.
Not all companies have a tax identification number from the IRS (also known as “Employer Identification Number” or EIN), or HMRC in the UK, but if you have employees, carry out a partnership or a corporation, you must obtain an EIN from the IRS. You should also start paying taxes to the IRS or HMRC.
Payroll taxes, sales taxes and state taxes are handled at the state level. Learn more about your state tax requirements and how to comply.
Select the location of your business
The place you choose to place yourself, where your business will be operating, can be the most important decision you make. Many factors come into play, such as proximity to suppliers, competition, access to transportation, demographics, zoning and regulations, among others. Research your market in the stages of developing your plan, and consider the likelihood of business partners, and the suppliers you are likely to have.
Add your business name
The registration of a “business trademark” is only required if the name of your business is not your personal name, the names of your partners, or officially registered name of your LLC or corporation.
It is fundamental that you also have a plan for your business operations online. Ensure that you get a business URL that represents your name, have an idea about how to advertise online, build a community in social networks and learn modern prospecting techniques that work, for instance, the benefits of Google AdWords.
Apply for Permissions and Hire Employees
All companies, including business conducted from home, need a license or permit to operate. This guide tells you the basics about how to determine your needs according to your zip code and the type of business. But more knowledge is needed from your local chambers of commerce or any other source of information.
If you are hiring employees, you need to make sure you hire the best employees. Find sources of information in the Jobcentre plus, where the unemployed tend to go frequently in their daily search. Further, the use of social media by companies to find workers continues to increase. Especially when selecting people for positions of some significance or qualified vacancies.
Risks considering before starting a business
For most people who are going to start a business, the opportunity to make their own decisions and be responsible for their own destiny it’s all what matters at that point in time. But if you want to succeed as an entrepreneur you have to be prepared for the risks and challenges that come with it. Here there are a few of the risks that every entrepreneur must face, from conception to development in the business arena:
Leaving behind a regular salary
Before venturing into the world of business ownership, in most cases the first thing you have to do is say goodbye to your current job. Some people have the luxury of having a safety plan (an option to continue their career, or continue their work in case things do not go well in their freelance business).
But for most business owners just starting, the choice is a risk they must take. There is no guarantee of personal income, especially in the first months and years of the existence of the company, and you’ll probably be too busy to secure or support an alternative line of income.
Sacrificing personal capital
Some entrepreneurs are able to start their enterprises relying exclusively on external funding. That usually means a collection of contributions from angel investors, government grants and loans, and the results of crowdfunding campaigns. But many entrepreneurs also have to dip into their own bank accounts and personal savings to get things started.
You may not need to completely finish with your savings, but you’ll have to spend personal money (and that means abandoning, or at least reducing, your support network).
Even if you have a credit line ensuring regular business cash flow, it is a bit difficult and stressful.
The bills can add up quickly, and if you do not have sufficient income to support the cash outflow you could run out of money and forced to dip into emergency funds.
Estimation of popular interest
No matter how much market research you do, or how many tests you have completed, you will never be able to estimate the popular interest in your business with perfect accuracy. Customers are unpredictable, which could put a giant hole in your plans.
Even when all the data seem to be in your favour, there’s a chance you’re overestimating interest in your company, and if projections are outside the range, the entire financial model could collapse.
We recommend you read our article with information about how to attract more customers to your business
When starting a business you do not have a full team of employees working for you; however, you probably have a small close-knit group of people who work tirelessly together in an effort to make it all work. You’ll have to put an overwhelming amount of confidence in them, especially if they have special skills that are difficult to find and are ready to start working with a salary lower than the industry standard.
For example, if you hire one person acting as a leading developer with experience to work on your product in the course of a few months, you must have absolute confidence in their ability to do the job on time. Otherwise, your timeline (and the product) may be fatally compromised.
Startups are, by nature, forced to strict for your product launches and goals milestone deadlines. Your finances are fragile, and investors are eager to begin to see the wheels turning. As a result, most entrepreneurs are forced to make several goals depending on a handful of times, and these times become absolutely critical.
Be prepared to have nights of concerns about your ability to do away with those limits, and deal with contingencies.
Entrepreneurship has an impact on the average person. You’ll spend hours and hours doing work for the company to succeed. You’ll lose sleep, you will miss the personal time, and you will experience more stress than usual.
Although the rewards of entrepreneurship are often higher than these personal risks, you must be prepared to live this lifestyle.
Risks should not put you off to pursue entrepreneurship. Instead, you have to see them for what they are: only obstacles necessary for the greater good. There is no way to avoid the risks you will face as an entrepreneur.
Want to know more about how to be a successful entrepreneur? I recommend you to check our list of tips and courses for entrepreneurs
Entrepreneurship and starting a business is not easy, you need to have a proper view of what that entails. The effort and sacrifice are necessary, but also an overview that includes the starting point, the steps to take and the objectives and desired results. A business owner who undertakes this job without a clear plan, it’s like going out to sea in a boat without sails or clear direction, being exposed to the whims of the currents and the wind, which eventually bringing it to a storm that causes its collapse.
It is also important to keep our feet on the ground and be realistic, but it never hurts to dream and think that entrepreneurship is something big. Of course, it is also dangerous if we let the outputs generated and think we can achieve anything we set. Everything has a limit, competition reacts or may arise, and therefore we cannot throw caution to the wind.
The best recipe to start a business is starting. At Marketingquery, we are aware of the needs that entrepreneurs, freelancers and new start-ups need to begin their business career. To facilitate the management of these tasks, there are plenty of sources at your disposal, such as, a complete software package for freelancers and entrepreneurs to deliver the bills, track your expenses, make your budget or implement your online store is fast, simple and effective.
Don’t hesitate to contact us if you need further information and we’ll get you some personal answers.