«   |   »

Laying the Groundwork for Success When Starting Your Own Business

Starting Your Own Business-

The business world is risky; entrepreneurs can’t leave anything to chance. That contradicts conventional wisdom as business owners are often viewed as gamblers and risk takers, but the truth is that those who take charge of their own enterprises are the most calculating people on the face of the planet. Those who assume otherwise end up falling flat on their faces, and people who want to avoid that fate need to carefully consider every action before signing the dotted line at the bottom of a business loan.

Step One: Save Capital

Starting Your Own BusinessDebt is a tool, and it’s incredibly useful when it’s well managed. The key is preparedness. Someone who has to finance a venture with nothing but borrowed money is sitting on a time bomb. It creates a situation where a new business has to be profitable from day one in order for the debt to remain manageable. When that doesn’t happen, interest rates and late fees pile on to create a financially ruinous snowball effect. As a general rule of thumb, new business owners should have at least a quarter of their starting capital in the bank before getting things under way. As long as there’s enough money on hand to cover expenses for three to six months, it’s possible to recover from early hiccups and create a profitable enterprise.

Step Two: Expect Complications

Nothing ever goes exactly as planned. Theory is important. Planning is incredibly important. However, plans that don’t account for the unforeseen and unexpected are doomed to fail. There has to be some leeway. When there isn’t, any minor problem can be enough to stonewall a new venture. This is one reason that it’s important to have money in the bank, but something else to prepare for is a lack of staff, unruly customers, equipment that doesn’t work right and fees that may pop up out of nowhere.

Step 3: Do Thorough Research

Sometimes it isn’t possible to get any solid statistics about a business idea. That’s not a bad thing; innovation is born from risk, and trying new things is one of the few good reasons to take risks. However, most businesses aren’t that different from everything else, and it’s possible to determine the long-term viability of an old idea well before it’s put into practice. An ice cream stand isn’t going to thrive in a cold climate or an isolated piece of land. Conversely, it will thrive near a busy downtown area where the summers are hot and the population has lots of disposable income.

Step 4: Employ Brutal Honesty

Not everyone is cut out for life as a business owner, and there is a degree of uncertainty that isn’t present as an employee. Prospective business owners may also have to deal with the fact that their ideas just aren’t that good. Someone who wants to enter the business world can’t afford to be afraid of failure; many entrepreneurs sink multiple businesses before starting one that’s successful, and even then it takes a lot more work than desk jobs would ever require. Before progress can be made, the person looking to make the leap from employed to self-employed needs to determine whether he is the kind of person who can take charge of things. If he’s not, he needs to know whether he wants to become what he needs to be in order to create a successful business.

Step 5: Consult Financial Professionals

No one can rely on themselves 100 percent of the time. Everyone needs someone else’s expertise from time to time, and the ability to learn from others is one of the things that separates great individuals from everyone else. Once someone knows that he wants to start a business he should consult with people who are good with money. They can teach him about the tax code, and they can show him ways to minimize his expenses by utilizing tax breaks and loopholes. Financial professionals can also help a rookie manage his finances while he gets on his feet, and he can take that responsibility onto himself once he’s more comfortable with his role as a business owner.

No one can run someone’s business for him, but the right financial adviser can take a set of goals and craft a practical plan for achieving them. People who work in the financial industry tend to have a better idea of how the economy works than the average person, and new entrepreneurs can learn a lot by collaborating with someone in that field.

Step 6: Persistence

While it isn’t enough to simply keep trying until something works, persistence is an incredibly important element of every successful venture. Things go wrong. Mistakes get made. Sometimes it looks like everything is going to come crashing down, and sometimes it does and sometimes it doesn’t. As long as lessons are learned and each attempt shows improvement over the last, success is inevitable. It just takes the right kind of person to pull it off.

See Also:

The Basics of Starting a Small Home-Based Business

5 Ways to Get Money for Your Business Start Up

Payroll Systems for Small Businesses | 4 Ways Outsourcing Payroll Could Benefit Your Business

Five Things to Consider When Outsourcing Your Payroll

Current Trend to Virtual Offices | Is it Time to Expand Your Small Business?

Why Businesses Should Retain Older Workers

7 Ways Your Business Can Reduce Energy Costs

About the Author:

Trisha Landman writes for mckinleyplowman.com.au. Click this link to read more about getting your finances in order.

Photo Credits: by RambergMediaImages | Finance maze