Be the boss. Decide what time to set the alarm, pick the number of vacations and lunch breaks, choose the salary, and make every other executive decision all while owning a business centered around your core values and passions. Entrepreneurship makes this possible. It provides individuals with a way to truly “live the dream” and control their own freedom.
While passion plays a major role in the success of an entrepreneur, the combination of passion and careful planning is what lays the foundation for a successful business. Even the exciting, rosy world of entrepreneurship has its thorns. Careful, strategic planning is essential for navigating the ups and downs of entrepreneurship.
Reaping the benefits of owning a business comes at a cost. Building a business deserves deliberate thought, special planning, and thorough research. Many decisions must be made, such as the business name, plan, budget, location, and structure. Thankfully, entrepreneurs have gone before and discovered crucial steps to take and possible pitfalls to beware of when positioning a new business for success.
Crucial Steps
Financial Planning
Financial planning deserves top priority when starting a business. While it can seem overwhelming, simply hiring an expert financial accountant will relieve a lot of stress. An accountant will not only understand the many aspects of business finances, they will help relay the information and catch unforeseen costs.
Although bringing a financial accountant onboard costs money up front, it will ultimately be well worth the investment. Not only will an accountant allow the business owner to put their energy into marketing and sales, but having an expert on the team can save money in the long run. This is especially true if they have a keen eye for avoiding or lowering expenses.
Take time to thoroughly research business costs and create a budget estimate. This is necessary for small and big businesses alike. Become knowledgeable about the specifics of incoming revenue as well as outgoing expenses. Consult a financial accountant for advice on budgeting.
Long in advance, live frugally, and be diligent about saving up money for business operations. When it is time to start the business, take that chunk of money saved and open a business account. Having separate business and personal bank accounts is critical; it will avoid wasting time untangling the accounts in the future.
Consider Business Structure
Starting a business does not always mean quitting a current job and starting everything from scratch. The beginning stages of a new business may not require extensive time. Consider the possibility of starting a moonlight business, which can be managed outside of normal work hours. This allows for attentive and careful planning, without sacrificing the stability of a normal income.
Also consider the advantages of starting a family business or taking control of an existing one. Working with family needs careful consideration and its success depends on many factors; however, family has the potential to provide long-standing trust, commitment, and stability.
Research and Test
Perform in-depth research concerning the business field or industry of interest. One of the best ways to do this is by working in it. By discovering all aspects of the business type firsthand, an individual will be able to objectively analyze their skills and training. Some simple market research will also clarify what the founder can expect from the competition. Knowing what a new business is up against can help determine future minded strategies.
Before a major business expansion, test market products or services. Properly judge customers’ reactions and perform necessary adjustments to make the product or service more successful. One widely used method is to conduct focus groups. Data is gathered by surveying a panel of random people. This information can be used to truly understand how consumers view the product, service, or industry as a whole.
Write up a pro/con list regarding the business type in consideration. This method of research will help in preventing possible obstacles by allowing time to prepare and sidestep.
Learn
Never stop learning. Successful entrepreneurship is only possible with continual personal growth.
Seek out advice from experts in similar businesses. Many business owners are more than willing to share their experiences. Simply request a brief interview. Keep a respectful, open, humble mind regarding whatever feedback they offer, and always aim to broaden networks and meet new people.
Learn from mistakes; recognize, assess, fix, and keep moving forward.
Set Goals
Set goals, meet them, and repeat. This should be a never-ending cycle in order to maintain business growth. Having a broad goal is important, but it should be narrowed down into smaller objectives. Objectives are far more detailed, follow a timeline, and set actionable steps from the beginning.
Possible Pitfalls
Financial Downfalls
Do not neglect completing business start-up plans and budget estimates before quitting a current job. This will ensure the new business has the deliberate thought it deserves for a successful beginning. Just knowing that a new business is not the main source of income will help relieve stress.
Take heed in maintaining accurate accounting. Once bookkeeping records fall behind or lack precision, it is difficult and time-consuming to catch up. One way this can be avoided is by keeping an open line of communication with a financial accountant. Without micromanaging, customarily overlook their work. Do not assume that they are aware of every daily transaction.
Business Structure Cautions
If starting a moonlight business, steer clear of competing with a current employer. Some companies have policies and guidelines concerning moonlighting. Conflict of interest can be a very serious and complex issue that may result in undesired consequences.
Regarding family businesses, keep things professional. Be wary of the effect personal history and emotion can have on the business. Keep family assets separate from the business’s finances. Do not allow family investments to exceed an amount previously agreed upon.
Do Not Rush
Patience is key; the Great Wall of China was not built in a day.
Selecting a business should not be rushed. Keep unenjoyable business ideas off the table. Success largely depends on how pleasurable the business is to the entrepreneur. Although it is not favorable to dwell on negative aspects, it would be wise to practically evaluate the negative aspects of a specific business.
Upon starting a business, do not allow discouragement to take over if it is not taking off as expected. Realize that new businesses take time to grow.
Assess Risk
High risk = high reward. This popular concept can prove to be true; however, the enticement of high reward should not shroud the potential of business losses. Risks should be taken after careful planning and consideration, making them a choice rather than a blind step.
Taking risks can be scary when starting a new business. While some risks are encouraged, selecting a business that carries extremely high risk is inadvisable. At the same time, do not aim too low. Selecting a business solely because it costs the least to succeed will not reap satisfactory rewards.
Attitude Check
Examining personal attitude and motivation is a valuable practice for entrepreneurs. While starting a business warrants some pride, do not allow self-confidence overshadow the importance of diligence in every business endeavor.
Although receiving advice is wise and commendable, learn to decipher between unwarranted opinions and constructive criticism. Not everyone will understand an entrepreneur’s dreams and goals. Be careful not to be discouraged by seemingly pessimistic comments. It is a good practice not to take criticism personally. Try to find any potential truths or viable advice in what is being said. Keep in mind, athletes benefit greatly from consistent coaching.
Beware of complacency; be brave in attempting business endeavors, and never stop the cycle of setting and reaching goals.
Do not become overly obsessed with perfection. The desire to complete tasks without flaw can sometimes prevent a person from taking action.
