Your business idea is ready for primetime. You’ve identified your market; you’ve forecasted your expenses and revenues; and you’ve gathered enough financial and community support for your plan to carry you to profitability. Now it is time to take action.
This is one of the most exciting times in an entrepreneur’s life, but it is also important to sweat the details. Small mistakes or oversights at the launch of your business can become major problems down the road.
As you acquire clients, generate revenue and hire people, you won’t have time to go back and redo things that weren’t set up correctly at the outset. That’s why it’s so important to make your first steps as a business owner the right ones.
1) Give Your Business Its Own Identity
The first important step on the path to a successful business launch is to separate your personal life from your business. You don’t want to commingle anything (this is especially important with finances). In order to accomplish this separation, you’ll need an employer identification number (EIN). It is best to get this after you set up your corporate structure (like an LLC or an Inc.), but you can get an EIN as a sole proprietor with only your social security number. Registering for an EIN is very easy, and you can complete the forms online in just a few minutes.
Once you have your EIN, you need to set up a bank account for your business and apply for a business credit card. You’ll want to use these accounts and only these accounts to purchase things and receive payments related to your business.
You’ll also want to get a separate phone and fax number for your business (easily and inexpensively done with a VoIP phone), a business mailing address (don’t use a PO box, which can’t accept packages – use something like Pak Mail instead), and a business email address (you’ll need to register your domain name in order to get this). Accomplishing these tasks will breathe life into your business and create a strong foundation for success.
2) Write It Down!
If you’ve been around business leaders and consultants, you’ve probably heard about how important it is to write mission and vision statements – writing things down creates a sense of permanence that spoken words do not.
What you may not have heard is the importance of writing other things down. In addition to statements of purpose, you need to create written processes from day one, even if you are the only employee in the business. Furthermore, you need to create a written organization chart that identifies the roles and responsibilities that must be fulfilled in order for the business to succeed.
In the beginning, you, as the owner, will probably fill most of those roles, but having an organization chart will help you plan for growth.
These initial written documents will keep your business organized and put you in a position to survive the challenges that growth presents.
3) Control Your Bookkeeping Before It Controls You
When you start a business, the last thing you’re probably thinking about is filing taxes. In fact, you probably won’t think about taxes until you approach the filing deadline. Even then, you might even file for an extension to put it off for as long as possible.
If you want to minimize the time and emotional energy spent on bookkeeping and taxes, you need to put a system in place to track your financial activities and use it from the day you start your business.
Trying to accurately enter financial data into a bookkeeping system months after the activities have actually occurred is exponentially more difficult than updating as you go. Purchase QuickBooks and hire a bookkeeper to help you set up your system as soon as you start your business. Once it’s set up, update the records at least every other week. Any longer, and you will start to find out why so many people hate managing their books.
Any more tips to share? Add them to the comments section below!
Originally published Apr 09, 2014, updated Aug 07, 2020