You should ask yourself “Why are you starting this business?” Many people start businesses with the belief that they will have more time, work from home and be able to set their own hours. These myths are important to avoid. Most of the time, it is not necessary to do any of these things when starting a business. It is hard work, long hours, more flexibility, and many hats. This is a completely different experience than working for a company. It is crucial to consider all these factors when you decide if starting your own business is the right choice for you. Let’s get started on your business idea if it is.
Attitude is everything. It is important to keep a positive attitude. There will be many things that happen throughout the lifecycle of a company. The most important thing is to remain positive.
BIGGEST OBSTACLES TO BE OVERCOME
Money and reputation are the two greatest obstacles to a startup’s success. When you start a business, it is important to ensure that your finances are in order. Reputation is another obstacle, as you don’t have customers or a good reputation. You will most likely start your business by yourself, unless you have a few customers.
WHAT DO YOU NEED?
VIABLE PRODUCT
It is important to offer a product/service people are interested in buying. It is important to research similar products and services to determine how your product is different from the rest. You must also be able to bring experience to your table. Your experience is what will make your company great. You want to choose a niche to allow you to take a narrow approach and determine what kind of company you want. You should also consider whether you are able to sell enough product or services to make a living. Are you able to pay all the salaries and expenses associated with running a business?
BUSINESS PLANS
It is essential to have a business plan. What is a business program?
An executive summary is a high-level overview of the business’s goals and objectives. The business description is next. This describes the business in detail. Next, you need a market analysis.Who is going to your customer? The next step is organization management. Who will manage the business? Do you plan to manage the business yourself? Or will you hire someone to do it for you? You will most likely be managing the business by yourself. The next step is to create a sales plan. What type of sales strategy will you use? Last, you will need to include financial projections and funding requirements. How much funding are you able to secure to launch the business?
It is crucial to have a written plan. It is essential that you record the information above on paper.
Many business plan templates are available. You don’t have to be an expert in business planning. A simple roadmap is another resource. This provides monthly projections for two years. Which trade shows are you going to? What number of people will you employ? What kind of marketing campaigns are you planning?
Goals are crucial. To know where you’re going, you need to have specific goals for your business plan.
FINANCING
How do you finance your business? How much money do you need to keep your business afloat? What salary will you take? What are your non-salary expenses? What number of people are you planning to hire the first year? What about benefits for your company? Even if you live alone, benefits and insurance are essential. These are just a few of the questions you should ask.
Do you choose to self-finance? If you have the money to fund the business and enough salary for the next year, self-financing may be an option. This reduces the stress. You don’t want to be under pressure from creditors. It will be difficult to obtain loans. You will need collateral if you are able to obtain a loan.
A financial business partner is another option. However, this can lead to meddling or pressure. You may have to do things differently than you planned. You are creating the business to give your own unique spin!
A funding company is the fourth option. A funding company is another viable option. They will usually handle your invoicing and payroll. You may also be offered a basic ATS system by the funding company. This could be helpful in your first steps. A funding company’s downside is that it can be difficult to leave. It is often difficult to separate from a funding company because you have to repay the loans with interest. You should understand your agreement with a funding company and what it means to leave the company.
Some additional funding options, are family, small business grants, and crowdfunding/internet. This is up to you, however. It can be difficult to obtain small business grants and it can take a long time. Crowdfunding allows you to raise small amounts of money from many people. This is a rare option but it could work.
What salary should you earn? It all depends on your industry. However, the average salary for your first year is between $34K and $75K. It is possible to make little for the first few years. You should be prepared for this. It is not a good idea to be in debt.
First year profits. Few businesses are able to make a profit in their first year. If this happens, it is important not to get discouraged and to keep going. Profits usually take two to three years to start to show.
COMPANY NAME
You should choose a name that is memorable and reflects the “look and feel” of your business. Don’t use your name. Leave that to the accountants and law firms. Sometimes, it can make you appear small. Always try to make yourself appear larger than you actually are. To be on the top of lists, a name that starts with “A” is a good idea.
Next, you’ll need to create a corporation. It is not enough to just sell stuff. It is a good idea to read books about different types of corporations. If you’re running a business, it is important to fully understand the process.
An EIN (Employer Identification number) is required. Next, you’ll need an EIN (Employer Identification Number). There are C corporation which is an Inc. business. You might have heard the expression “Cannot penetrate the company veil.” This means that if you create a C corporation, nobody can sue you. They must sue the corporation. You can file taxes separately from your personal taxes. This option is great because it allows you keep your business and personal affairs separate. This is not true for S corporations. Both your personal and business tax returns will be the same. Keep in mind that there are often tax benefits to selling your company. It is difficult and costly to form an S corporation after forming a C corporation. A S corporation is a good option if you do not plan to keep the business in your hands for a prolonged period of time. There are also Limited Liability Companies (LLCs). A non-profit can also be formed, but this must be done carefully and you must ensure you are eligible.