Many entrepreneurs make the mistake of just jumping into their business with great excitement but without putting a strong foundation in place. If you get started without thinking through exactly what you are going to do, how you are going to do it, how you will finance it, and how you will make money doing it…… then your chances for success are likely to be quite slim.
Here are 5 basics that you should know if you want to start a business:
1: The Legal and Regulatory Requirements of Your Business:
When you have decided to start a business, your first stop should be the small business information center of your city or region. Such an establishment can provide you with information packages about licensing, permits, zoning requirements, for your particular business type, as well as how to run a business in your location in general. The packages are usually free, and information very invaluable in terms of starting your business on the right foot. You do not want to start a home business, only to find out after you have bought so much equipment and supplies that your business is not allowed in your residential area. You also need to determine the legal structure of your business, and how to set that up. Your business information center can provide you with the information on how to go about the steps necessary for your business registration and the setting up of your business. If you will be working solo in your business, you can register your business as a sole proprietorship. Once you have your business registration, you can then set-up your business bank account. If you are starting a business that uses an innovative technology or process and the success of your venture depends on you keeping that knowledge you should certainly consider speaking to a lawyer who can help protect your business idea.
2: The Operational Requirements of Running Your Business:
When your business is off the ground and ready to open, you are in an “operational mode.” You need to know and identify the elements that can affect the smooth running of your business. Part of this process includes knowing and getting the right insurance for your business. You also need to look for the professionals who could provide you with the support and advice for setting it up appropriately, such as an accountant, a lawyer, and possibly others. You also need to have your marketing plan and brand ideas, which would include your business cards and stationery. There are a number of manufacturers that provide sample packages of office products, software working demos, and stationery or paper samples direct from manufacturers. Or you could consult with a marketer or brand developer.
3: The Technical Aspects of The Business:
You should know as much as possible about the business that you are entering. The more you know about how things are done in the industry, the better you will be able to serve your clients and manage your business. Plus, that knowledge will protect you from scam artists out to fleece newbies like yourself. As a start-up entrepreneur, you may find yourself asking, “What are the things that I should know about my business?” Your first resource should be a profile book. There are a number of book publishers and authors that write profiles of a particular type of business from How to Start a Home-Based Travel Business, How to Start a Day Care Business from Home, or How to Start a Home-Based Carpentry Business and more. Your other option is to speak with others already in the business to see if they can give you some tips and ideas.
4: The Marketing of the Business:
You need to ensure that money continues to flow in your business by getting a steady stream of customers. Before anything else, research how to make sure that a market for your business exists. Make sure you understand who your typical customers are, and how best to reach them. Does your market respond well to classified ads, or should you embark on a high profile direct marketing campaign? Can you simply show them your product and expect them to immediately buy it; or do they need know and trust you before giving their accounts to you? Are they impulse buyers; or are they the types of people who carefully evaluate the product or service before purchasing? Once you have clearly identified your market, you can then the take steps necessary to ensure that your potential customers will know about your business. Map out a simple plan spelling out in writing the steps you need to take to get more clients or customers for your products or services.
5: The Financial Management and Record Keeping:
Whether you are comfortable with numbers or not, you must gain a basic understanding of the financial aspects of running a business. Having a strong grasp of the financial requirements of your business can bring you a long way. The things you need to bone up on include record keeping, cash flow management, account receivables management, debt collection, and tax management. You must be familiar with the concepts of budgets, accounting, and profit margins. You need to know the flow of money in your business, the ways to improve your bottom line, and any tips to lessen your taxes and stretch out your resources during a dry spell. You also need to have a good idea of how much money you will actually need before you start looking for money.
A key point to remember is that you do not have to be an expert in all these areas just reasonably knowledgeable or willing to hire an expert who can help you to get it all set up. Otherwise, being seriously deficient in any one of these areas could ruin your chances for a successful outcome.
Yes — I have to do more with the financial book keeping. It doesn’t get my complete attention. That said, a startup’s offering is what the employees of the company can offer. This can make it tricky for market messaging and branding. You can’t just say “our people differentiate us”. For any company with limited resources, you have to really understand what your people can do and will do.
Hi Chris,
What you have said is true, however one of the big issues with start-ups is they often do not take the time to really make a good long range plan and part of that plan needs to be a clear idea of what they hope to do and how. That means they need to hire the right and best people who agree with the owner’s core values and values…..with their strategic vision. If we are not on the same page the brand will not be developed as hoped and that will definitely affect the marketing message. Training one’s people is key to getting the right message across to your customers. Yes, resources are always limited in the beginning but that should be part of the plan when you line up your finances…..a sufficient cushion to get things started in the best way possible…..and that must include some employee training.