Starting a business can be an extremely liberating act. You eliminate your boss, you eliminate wasted costs, and you can focus on your passions. Unfortunately, starting a business can also be an extremely overwhelming act. You no longer have a boss, the responsibility rests with you to make the right choices, and there is no guaranteed, steady income as my boss at Premier Factory Safety have found out. So to help ensure your new business brings you liberty and not anxiety, here are 6 tips for effectively starting a new business.
- Save – The number one stressor when starting a new business is income replacement. Some will use lending as a back-stop, others will use retirement funds, and still others will have cash savings available. While all three will provide an ability to pay the bills while starting a business, the first two can have costly long-term ramifications in the form of interest on loans or tax penalties on retirement funds. By savings money before venturing out, you can breathe easy knowing your business can run without an immediate need for profits.
- Budget – Without a budget, a new business will never succeed. Handling accounts payable, accounts receivable, fluctuating sales, and changing costs will not only monopolize your time, if unaccounted for, it will bankrupt you. You need to set a budget for all expenses, including payroll, taxes, insurance, rent, utilities, marketing, advertising, inventory, and so on. This will ensure you don’t have one big month and break the budget when the next is lean.
- Learn the Tax Code – Or at least, how it relates to your business. This will help you to know what expenses are tax deductible, how to properly account for what taxes will be due, and help you in knowing what receipts to keep and how to file them. This is best done with the assistance of a CPA who can walk you through the taxable implications of every part of your business. Understanding taxes will help you determine what is – and is not – a good decision.
- Have a Business Plan – Whether a one-page overview or a 100 page fully detailed plan, having something on paper to guide your first year will prove invaluable. Obviously, the more detailed in relation to budgeting, projected sales, profitability, marketing, target markets, and so forth the better, but also something is certainly better than nothing. Also, do not be afraid to adjust your plan as you go. If it proves to be inaccurate or things come up which were not accounted for, then adjust and move on.
- Be Flexible – Any successful business owner will tell you the path to success turned out to be very different than expected. Bumps and curveballs will come up and you need to be willing to handle them. This can be anything from needing to spend more in marketing to a vendor not being reliable to a regulatory change impacting your entire business model. Whatever the change, if you are flexible in your design and ready to change, you will be ahead of the curve.
- Remember the Life in Work-Life Balance – It is not uncommon to work 60, 70, 80 hours, or even more when starting a business. But when you are not working, remember what it’s all for – your personal life. Don’t become another statistic where a business breaks up a marriage or gets between a parent and children. Focus on work during work and life during life, otherwise you will burn out and never succeed. Or, you’ll be successful but have no one to share in that success with.
Starting a business is never an easy task, but by remaining organized, flexible, and creating a strong balance, you can succeed. And there is no greater feeling than succeeding as a small business owner.