5 things to remember as you start your business

Interest in entrepreneurship is high these days. The prospect of running your own business is appealing, but if you’re getting ready to go down the path of entrepreneurship, it’s best to have a few things planned ahead of time. That way you will be ready to face some of the various challenges that await you. Here are just 5 things to keep in mind when starting your business.

Understand the commitment involved

Many times, new entrepreneurs don’t appreciate the level of engagement that goes into starting and growing a new company. You will need to invest time, energy and financial resources even before the first day of business. Some of the things that need to be planned up front are:

• sufficient capital
• cash flow
• having a service or product with strong potential
• finding good employees.

You will have personal challenges as well, such as investing more time than you might have expected, potentially facing rejection from investors or customers, keeping your stamina when things get demanding and finding a work/life balance.

Create a good business plan

Think of a business plan as a road map for your company. It will help guide you as you build, run and grow your business. It will also be necessary when you approach investors, as they will want to see if you are likely to provide a return on their investment.

Business plans don’t need to have a specific format. The Small Business Administration puts business plans into two categories: traditional and lean. Traditional plans follow a standard structure and format and are more detailed than lean plans. They will require more work up front. Here are some of the categories in a traditional business plan.

• Executive summary
  • This sums up what your company is and why you are starting it. It may include basic information about your product or service and your mission statement.
• Organisation and management
  • This category describes the structure of your business, who will be in charge and the organisation of employees.
• Financial projections
  • If your business is established, it may include any past financial records. This is also the category for future projections like capital expenditure budgets, a break-even point, balance sheets and income statements.

A lean business plan is appropriate for a business that is fairly simple or will be started quickly. It is also a good model if you expect your plan to be fluid. Key categories include resources, partnerships, activities, cost structure and revenue streams.

Protect your personal assets

While it may be a challenge in the beginning, keeping your personal and business assets separate is a must. Forming a corporation or LLC will protect your assets from the liabilities of your company. Keep your business accounts, transactions, funds and taxes separate.

Find the perfect name

Thinking of a name for your business is no doubt one of the fun parts of starting up. However, some thought and research needs to go into the naming process to avoid any possible hurdles in the future.

First, conduct internet and trademark searches for the names you have in mind to make sure they are not already taken. Test the names with investors, partners and potential customers.

Keep in mind that a name that’s hard to spell or pronounce may seem catchy, but might be hard to remember. Finally, consider whether the name you like could somehow limit growth. For example, naming your flower shop Flowers Only might make it harder on you if you decide to expand your market to gardening supplies.

Set up shop

If your business is service-based and you operate online, you might not need much more than a home office from which to operate. However, if you will be selling products, you’ll need a place for your inventory. Brick-and-mortar businesses will, of course, need you to rent or purchase a good location. You’ll need to make sure your office, store or warehouse is affordable and will provide adequate space.

Starting your own company is exciting, and with preparation and determination, you can embark on your journey to entrepreneurship ready to face the challenges ahead.

Featured image courtesy of Unsplash