Despite what you might think after reading all these successful startup stories circulating around the web, running your own businesses isn’t a piece of cake. It certainly helps a lot if you enter the scene already prepared and with a clear plan to guide you ahead in realizing your objectives. Here are five essential things you should know to avoid committing some of the worst foundational mistakes right when starting your very own business.
1) Get your practical knowledge fix.
As a solo entrepreneur, you’ll be responsible for each and every aspect of your operation. You’ll handle areas like sales and marketing, but also in the tough, and more mundane, tasks like accounting and law. That’s why before starting a business, you’ll need to have a firm grasp on all these areas.
You should fully understand the legal background of running a business with all the licenses, taxes and regulations – you don’t want to run an operation that isn’t compliant with the law. Consult with lawyers and accountants. They’ll help you to structure your operation and give you a full picture of your responsibilities as an entrepreneur.
2) Choose the right name for your operation.
This is important not only for branding, but for practical reasons as well. You’d want this name to have an available trademark and an internet domain. If you go on to add your company name to all your materials and merchandise, only to later learn that you cannot obtain a trademark, you risk wasting both your money and time. And that’s not something a budding entrepreneur can spare in starting their operation.
3) Determine what you need to go on.
It’s likely that you’ll have to wait before your business starts making profits. Until then, you need to be sure what resources you’ll need for your daily life expenses – rent, health insurance, mortgage and other monthly outgoings will take a toll on your budget.
Running a business means that there won’t be anyone paying you a steady salary. That’s why you should ensure enough funding to support both yourself and your business. Here are 7 budget friendly solutions that can help improve your start-up productivity from the get-go.
Consider taking a part-time job to support yourself while still delegating time to developing your own venture. Always have some money ready for those unforeseen expenses that often come with starting a business.
4) Ask yourself some personal questions.
Starting a business will turn your life by 180 degrees. Prepare for long working hours, less sleep, more responsibility and possibly more stress. Ask yourself the following questions:
- Are you in a moment of your life where you can take on such a challenge?
- Is your personality well-suited to running a business?
- Are there any other important responsibilities in your life?
- And if so, how well will you be able to prioritize them all while running a business?
5) Underestimate your profits and overestimate your costs.
This is the safest planning strategy entrepreneurs have ever known. Having a clear picture of your expenses and profits will allow you to plan ahead and accurately predict the development of your business. Expect some additional expenses and always keep a financial cushion.
When starting a business, it’s very common to first spend money in order to make some. Plan your investments carefully and decide which expenses are necessary and will bring a real benefit to your business. Giving every new customer a $10 welcome gift might not be as important as spending a $1000 for an online vendor listing. There’s also solutions, like Fiverr, which allow you to outsource certain aspects of your business operations for a fraction of the cost which you would be to an agency. Consider these resources, and other cost effective tools to help your business get off the ground.
Running your own business, you’ll face many challenges, but also get a lot of satisfaction out of being your own boss. If you do it right, you’ll enjoy all the freedom and flexibility while doing what you really love.
Originally published Apr 17, 2015, updated Jan 27, 2021