Starting your own business can be very exciting, yet it can be stressful and overwhelming for most. There is a lot you need to know about starting your own business from registering the company, writing a convincing business plan to secure the right amount of financing. As a result, most entrepreneurs starting their businesses at the first time worry about failure.
Most entrepreneurs don’t understand that it’s not enough to simply have a good idea to start a business. Just an idea alone, will not guarantee adequate funding for your business and without adequate financing, most people can’t start and those that can fail within few years of starting their business. It’s easy to become overwhelmed in the early stages of starting a business.
Vision is only starting point, it is essential to know how to deal with the problem and be able to market yourself and your offering in a completive environment.
We are going to share some practical steps that come from 30 years of experience of having helped hundreds of entrepreneurs across all industries. These practical tips will give your new enterprise the best chance of success.
Here are some Key Steps for Starting a Business Successfully:
1) Do Your Analysis Before Your Official Opening
Opening your business for operations can be a stressful and costly time. Many costs are tied to the registration and start of operations. To avoid having these costs start to accrue before you are ready, it is necessary to do all your pre-work before the business actually is opened. This includes doing your feasibility and market analysis, which ensures that your idea will translate well to a successful business.
Doing this before you devote yourself to your business also has an added benefit. It allows you to work on your business while still drawing on whatever income sources you had pre-business.
This strategy allows you to do all the steps necessary to start to build a plan, avoid costs for as long as possible and maximize the use of your pre-business income.
2) Get Customers Lined Up
Another key part of pre-work is starting to market your business. While you are building your plans, you are free to start networking with potential clients and even lining up letters of intent with them if possible. This will ensure you hit the ground running on Day 1 and will also serve to show that you are well on your way to achieving your targets.
3) Corporate Structure and Setup
As you move forward in your plans, registering your company and designing the company structure is a key step that is often overlooked. It is a key step, as issues here often are costly to fix once you are operating. At this stage you face many decisions:
- Will your business be a Sole Proprietorship, Partnership or Corporation? This is a key decision on how the company owner will be set up, how taxes will be filed and how liability on the owners will be managed. If you register a corporation you then need to define who the directors are, who owns the shares and define a shareholder agreement.
- You need to define your products, which will confirm if you have to charge GST or PST?
- Will you have employees and if so, how will they be paid, as employees on the payroll, or as contractors. This decision will drive items like Workers’ Compensation Insurance, payroll deductions and payroll taxes?
From a company structure perspective, while you may start with only a small number of employees, you need to consider what positions will need to be added as you grow. At what stage might you need sales staff, internal office positions or increased leadership. Drawing up a structure in advance and defining at what stage each role needs to be added will ensure that you don’t lose sight of this as you grow. A common issue for new businesses over time is the owner takes too much on themselves and does not execute a growth plan. Considering these things early on in the process will make starting your new business both a smoother, less stressful process and go a long way towards ensuring the business you start lasts and thrives.
4) Business Plan
The key reasons for doing a business plan are:
- A plan will allow you to define your revenue and expenses, and to assess the feasibility of your business over time. Typically, a plan is 3-5 years and gives you the opportunity to build projections and targets to achieve as your business grows.
- A plan allows you to define when you will need to hire, when you need to do marketing, when you need equipment, etc. These items can then be built into an execution plan.
- A business plan is required to be able to secure funds for your business. Potential lenders need to see your financial projections so they can see how their funds will be repaid.
Your plan must be concise, specific, and describe your business project accurately. It’s a good idea to write the summary yourself, as it is your vision. Also, expect to do several rewrites before you achieve your final plan. Don’t be afraid to reach out to professionals for help if you need it. Review your plan with experts, those that specialize in business plan writing and financing such as accountants or consultants. Keep in mind that a business plan is more than an accounting document; it must sell your idea to a potential financial institution to get you the funding you need to start your business. Talk to BPF Solutions about your Business Plan needs. BPF offers a customized business plan and Financing solutions for businesses with high growth potential.
5) Secure Financing
We usually see small start-up companies being financed from the owners’ savings and borrowing from friends and family. We see many founders of start-ups spend all their savings to start the business leaving them with no contingency to support day-to-day operations. As a result, most start-ups fail in their first year of operations because they were underfunded. For this reason, it is necessary to look for outside capital such as banks, credit unions to secure the funds. There are many financing options available for start-up businesses but choosing the right financing is the key. So be sure to do your homework and have your business plan ready prior to approaching lenders for financing. Talk to BPF Solutions about your Start-up Financing needs. BPF offers a customized business plan and Financing solutions for businesses with high growth potential.
6) Get Professional Help
Don’t make the same mistake that most entrepreneurs make when they are starting a business. Just because you’re starting a business, doesn’t mean you have to be an expert on everything. If you’re not an accountant or bookkeeper, hire one (or both). If you need to write up a contract, and you’re not a lawyer, hire one. If you are not a business plan writer and don’t know what your financing options, find someone that is an expert. You will waste more time and possibly money, in the long run, trying to do things yourself that you are not qualified to do. Ideally, look for a professional company that provides a suite of services such as corporate registration, accounting and bookkeeping, business plan writing and financing, all under one roof. This will ensure you have access to all the resources needed from start to end to get your enterprise setup the right way to be successful.
7) Right People for Right Job
Most entrepreneurs make the common mistake of having the owner wearing many hats. They are in charge of doing sales & marketing, customer service, HR and running day-to-day operational activities. As a small business owner, you can do anything, but you can’t do everything! Hire people who love to do what you hate to do so you can focus on your dream and evangelize your passion. The best leaders ensure that they recruit the top experts for each area of operations. You should not be afraid to hire people who have, in their respective fields, more knowledge and expertise than you do.
As an entrepreneur, if you want your business to be successful you have to ensure that people on your management team have skills that complement one another. From a practical point of view, you will need sales & marketing people, managers, legal, accounting and other administrative assistance help.
Another good idea is to set up a board of directors or a strategy committee and invite an expert to act as a sounding board for your business decisions. This will allow you to get an outside view on key decisions to ensure your best chance of success.
BPF Solutions is a Boutique Consulting and Advisory firm with over 30 years of expertise in business planning and financing, as well as real estate and construction financing and accounting. We help to create and develop customized solutions to meet your business financing needs. Learn how to maximize the opportunity to secure the funds you need.