6 Things to Consider Before Starting a Business
Under What Legal Structure will my Business Operate?
This is one of the most important things to consider when starting your own business. We’ve talked about this before on our blog, but it’s worth mentioning again that there are several different legal structures for businesses, some of which include a sole proprietorship, limited liability company (LLC), partnership, S-Corp and C-Corp. Each structure has its own tax and accounting implications, so familiarize yourself with the different ones and choose the structure best suited for your business.
Do I Have a Business Plan?
If not, you should. A business plan is essential when starting a new business, as it provides invaluable guidance and direction on how you’ll turn your vision of a profitable business into a reality. Furthermore, many banks and financial lenders require a business plan from entrepreneurs when seeking loans.
How will I Grow my Business?
Looking towards the future, you should plan how exactly you’ll grow your business. Whether it’s increasing inventory, targeting new markets, or venture into a different niche, growth is paramount for the success of a small business.
How Much Startup Capital Do I Have?
There’s no other way around it: you’ll need at least some startup capital to get your business off the ground. Some entrepreneurs use their own personal cash savings to finance their business, while others seek startup capital from investors and/or banks.
How will I Promote My Business?
You’ll also need to decide how you’ll promote your business. After all, you can’t expect people to buy your product or service unless they know about your business. Thanks to the advent of the Internet, promoting is now easier than ever. You can leverage paid search advertising and social media to spread the word, focusing your promotional efforts on your target audience.
How will I Keep Track of Financial Records?
Don’t wait until your business is already up and running to find a bookkeeping solution. Failure to keep proper financial records is a serious mistake that has forced countless small businesses to close their doors. You can either perform this task yourself, using accounting software like Intuit’s Quickbooks, or you can outsource it to a professional CPA. The bottom line is that you need to plan your bookkeeping before starting your business.