Starting a small business doesn’t happen overnight. It requires many different steps to transform an idea into a startup and only the most patient of entrepreneurs will survive the ordeal. It takes time and you have to be willing to dedicate yourself to the process as there will be plenty of speed bumps along the way.
This isn’t meant to put you off, obviously – but you do need to consider whether the idea you have is going to translate into a long term, financial success that can support both you and your family.
In order to help you decide whether you are ready to take the plunge and start that startup, here are four steps to take before starting a small business.
Do your research
There’d be a very little point in setting up a coffee shop in Juneau, Alaska which has 22 coffee shops serving a population of 32,519. You need to do your research to ensure that what your business is offering is either needed in the locality you are offering it or provides something that is nearly-unique in a specific field. Talking to what you consider to be your target audience and potential customers will give you some idea as to whether your small business has a place and will work. Remember, no matter how good your idea is, it won’t work unless there is a demand for it.
Cover the legalities
You’ll need to decide early on what legal structure your business is going to take. Picking a legal structure determines the taxes, paperwork, liability of the owners and other legal aspects, including whether or not the company can have employees down the line. The most common structure for a startup is a limited liability company which offers flexibility and protection from personal liability.
Map out your finances
One of the major stumbling blocks to starting a small business is capital, or lack of it. You need to make sure you are going to have enough cash to get the venture off the ground and pump into it until the profits start arriving, which can take some time. You may need to find investors before you commit to building your business and you’ll certainly need a thorough business plan which works out how much you expect to bring in and keeps a careful Over Head Watch to ensure you aren’t spending lots more than you can make.
Don’t go it alone – ask for help
There is so much to do when starting a small business that it is inevitable that you will need help. Don’t be afraid to reach out for advice to those who have successfully set up their own business in an almost coach or mentor role. An accountant will be a must if you’ve never handled your own finances before, while seeking guidance on the legal side of things can help prevent any possible issues cropping up down the line. Prevention is better than a cure and that is never truer than when it comes to avoiding what could be costly legal proceedings at a later date because of something your overlooked or didn’t understand.
by Simon Hopes, Negosentro |