Featured Image Caption: Business Tips for Beginners | Image Credit: unsplash(.)com
Starting a business is pushed by two things. One is becoming a business owner after having a long life dream with a unique product. Secondly, people do it since there’s an immediate gap in the market that you can offer a solution. Unfortunately, many small businesses close their doors within their first year of operations due to poor business plans, financing, or poor market research. To push forward for the business’s success, here are four things to remember when starting your business.
Choose the right legal structure
The legal structure for the business directly affects financial responsibility, which includes personal liability, profits, and taxes. Depending on the volatility of the business, you can choose one of three legal structures of your business. Corporations typically consist of investors that raise capital and have shareholders that are sometimes responsible for the profits and losses of the business. Also, personal assets are safe if the company does fail.
A Limited Liability Company (LLC) separates its debt from personal debt and assets to pay for the company debts. A limited liability company also has less formality and lacks self-employment taxes. A Sole Proprietorship is the most common type of legal structure as many startups use personal savings to start a business, and there’s no difference between the business and the owner. However, business debts are individual debts.
Consider the dynamics of the business before choosing a legal structure. Note that in both corporations and limited liabilities, even with the success of the business, monies cannot be transferred for personal use, unlike sole proprietorship.
Starting a business needs a lot of patience and determination especially as a startup. Daily life schedules will change, and expect long days and shorter nights until the business breaks even. However, to be better prepared for the emotional toll, learn how other successful business owners manage. Often the first year, even two, you are likely going to be in the negative. Set annual goals and then take the time to break them down to a day-to-day goal. By doing that you will increase your rate and chances of success with your new business.
There will be a lot of expenses when it comes to starting your business. Although you may have done enough market research and consultations for your area, make sure to have your building inspected before you move in and begin. There are still many buildings that have contaminants present in the building from lead to asbestos. Getting together with a lead inspection firm may be something that is needed in order to keep your employees safe.
Keep in mind that equipment used in your business also requires maintenance. Failure of equipment after use is common or even a change in product design after getting feedback from your customers. There are many things that can be planned for, and others that cannot, but overestimating expenses, it prepares the business better, releasing financial pressure from yourself.
Focus on Customers and the Market
Do not focus on products to drive sales. Focus on the market for sellouts. Ensure the product is solving an actual problem to succeed. Focus on a smaller market instead of a larger group that is untargeted. Use the tools available such as social media. From Facebook to YouTube and anything in between, there are so many ways to get your product and name out in front of your future customers.
Remember to go to the drawing board often and review or revise your business plan as needed. Be open-minded and ready to take criticism, and don’t be afraid to find out what the customer thinks. Enough cannot be said about the impact and importance of word-of-mouth referrals.
By Rachelle Wilber
who is a freelance writer and residing in San Diego, California area. Rachelle finds an interest in all topics and have Bachelor’s Degree in Journalism and Media Studies.