Are you ready to start your business? You might be eager to say yes, but you might be better off taking a step back. While there is such a thing as procrastinating too much when it comes to getting your business up and running, it's also important that you have the major parts in place as well as some backup plans in case things goes wrong. The five tips below can help you prepare.
Get Your Personal Finances in Order
When you are getting your business up and running, you want to be able to give it as much of your attention as possible. This means you should try to cut down on the sources of other concerns, including financial worries that you might have. There are a few other reasons to organize your finances.
Sometimes, lenders or investors will look into your personal finances. If those finances are a mess, it can be difficult to determine how much money you will need to have coming in to cover your own expenses. You may want to think about trying to pay off outstanding credit card debt. You could also look into refinancing student loans. Refinancing could give you a new, lower payment. This could mean paying less in the long run as well as each month. Once you have taken a closer look at your debts, you might want to put together a budget so that you know exactly how much money you need each month.
Picture a Worst-Case Scenario
The power of positive thinking is a good thing, but it's important to be prepared in case things go wrong as well. With your personal finances organized, you can think about what you will do if you find yourself without any money or run into other big roadblocks. One way people deal with this is by planning to keep their day job for a while although you also need to make sure that you do not run afoul of policies in your workplace.
In particular, make sure that any intellectual property you create outside of work hours belongs to you and that there is no prohibition on running a side business. Finally, think about the practical steps you will take if you do run into money issues. For example, knowing ahead of time what kinds of loans you might be eligible for if you run into a cash flow problem is a good idea.
Talk to People
If you're one of those people who is filled with charisma and who likes talking to and persuading people, you're in luck. Unfortunately, many people aren't crazy about this aspect of starting a business. All the same, at the very least you'll need to persuade customers to give your products or services a try, so you might as well get into the habit of talking about your idea with enthusiasm. Develop an elevator pitch in which you are able to quickly give someone a sense of your business idea in just a few sentences.
You may need to do this with focus groups, potential investors and lenders. You might also want to consider opportunities to present yourself as a thought leader in your field, looking for public speaking opportunities. By talking to others about your idea, it can help you refine it and understand what elements of it work and which ones do not.
Address Legal and Financial Concerns
Should you set up as an LLC, an S-Corp or something else? How and when do you file your taxes? Are there local taxes, zoning issues or forms you need to complete? What should you include in contracts with employees, consultants or clients? What type of insurance do you need? What is the best way to ensure that you keep your business finances separate from your personal finances? Getting things right from the start is easier, less stressful and less costly than trying to clean up mistakes later. You may want to meet with an attorney and an accountant to ensure that you have answers to these questions and everything in place as much as possible.
Write a Business Plan
No matter how small your business will be and whether or not you plan to seek investors, you should write a business plan. The reason is that writing a plan gives you the opportunity to identify your weaknesses and any areas you have not fleshed out sufficiently. For every element of your business, try to think in terms of concrete strategies.
For example, one area new business owners often neglect to think about very much is marketing. What will set you apart from other, similar businesses? Are you offering something truly unique, and if not, why should customers pick you instead of existing businesses? Who are your customers, and how will you inform them about your business? How can you get them to give you a try and keep coming back?