10 Things You Should Know Before Starting A Business Starting a business can be very exciting. Many people forget to do their homework, because they are focusing on the prospects of being their own boss. The following tips will help you broaden your mind before starting up your own business.
1. Choose The Right Business For You
Sometimes, the difference between success and failure can be just choosing the right business for you. There are times when no matter how much you try, things just won’t work out because market conditions are not in your favor.
2. Have A Business Plan
Taking the time to write out your business plan, forecasts and marketing strategy is a particularly effective way to hone your vision. All planning should center around two essential questions: How is my business serving a particular need, and does this represent a major market opportunity?
3. Know Your Numbers
Have a good grasp on your sales, gross margins, profits, cash flow, and the specific metrics associated with your business. You will be making many decisions “on the fly” and knowing the numbers will help ensure you make the right decisions.
4. Start Small And Grow
If possible, self-fund your startup and then go for funding when you can create a growth story. This might cause you to break up your product/service offering into smaller pieces so you can fund the early stages and get some traction and experience.
5. Focus On Clients
Business is all about people. You can’t do it all by yourself. Focus on people, understand their needs, compensate them adequately, and invest in their training. They may or may not stay with you, but it’s important to continually train them.
6. Find A Good Mentor
Having a good mentor is like parental guidance. You want someone to hold you accountable for your actions, and provide guidance through your journey. Your mentor should ideally be someone who has a strong track record of success in business, believes in your idea, and is willing to give you honest feedback without worrying about protecting your feelings.
7. Get In With The Law
Understand what regulations, licenses and taxes you will need to follow, obtain and pay for your new business. After doing some initial research on your own, consult with a lawyer and accountant to confirm your understanding and to help structure your business to be in compliance with the law.
8. Learn To Manage Debt Better
Some entrepreneurs use debt to start a business, this can be very dangerous especially if you are a first time entrepreneur. If the business fails, the business owner still needs to pay back debt because most debts are personally guaranteed by the business owner
9. The Owner Is Separate From His Business
In some cases, entrepreneurs struggle to differentiate their personal finances from that of their business. It’s important to separate yourself from your business, and look at yourself as an employee and shareholder in your business.
10. Avoid Hiring Friends
It’s a good thing to create employment for your friends, but one has to be careful. This can create some difficult situations when running a business. At times you will be taken advantage of, or be reluctant to let employees go even though you know they under perform.