Things to know before starting your own business – A Complete Guide

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Starting business
Smiling entrepreneures showing e-mail on laptop screen to coworker

Be a Wise and a Vigilant Entrepreneur

Challenges faced before starting your own business?

You have an excellent idea for an innovative product or service. You are ready and willing to take the risk of investing in it, but you don’t want to go into debt at this point because that would make things difficult later on. The problem is that there are so many other people who also want to start their businesses right now, which means competition will be fierce. If you do not get started soon enough, someone else might beat you to the punch.

What are the steps needed before opening your own business?

1. Finding Funding.

2. Building Customer Base.

3. Marketing Strategy & Execution.

4. Managing Growth.

5. Financing Expansion.

6. Maintaining Profitability.

7. Raising Capital.

8. Choosing Legal Structure.

9. Starting Operations.

10. Hiring Employees.

11. Managing Risk.

12. Protecting Intellectual Property Rights.

How to open a business account?

When you register your business, you may use either a bank account or credit card, depending on your personal preference and financial situation. Some banks charge monthly maintenance fees, whereas others waive off such charges. Therefore, check with your bank first before registering your business.

Opening a Bank Account

If you already have a checking account, you can use it to pay bills or transfer funds to another person’s account. This way, you only incur transaction costs once per month. But if you haven’t opened any accounts yet, here are three reasons why you should open one:

  • To receive payments from clients/customers.
  • To write checks against your business’ performance.
  • To deposit cash acquired from sales.

Why Use Credit Cards?

Credit cards are convenient since you can purchase goods online using them. They come with built-in fraud prevention features too.

What makes a startup successful?

The most important thing about being a startup entrepreneur is believing in yourself and trusting your instincts. Your passion for entrepreneurship cannot be questioned; however, you need to ensure that you have all the necessary skills to run a company successfully.

Managing growth

Growth is inevitable if you continue to innovate and stay ahead of your competitors. However, managing change is just as challenging as growing your business. Here are four ways to drive growth:

  • Develop new products and services.
  • Expand market reach.
  • Increase customer base.
  • Improve efficiency.

Marketing strategy & execution

Your marketing plan should include both offline and online strategies.

Offline Strategies

These include direct mail campaigns, radio ads, television commercials, billboards, etc.

Online Strategies

This includes search engine optimization techniques, social media advertising, web design, eCommerce websites, affiliate programs, etc.

Choosing legal structure

There are two types of companies – sole proprietorship and corporation. Each has its advantages and disadvantages. Read up on these differences and decide which style suits your business best.

Corporation

A corporation provides limited liability protection for shareholders. Shareholders can sue each other rather than using the Company itself. In addition, they can share profits equally among themselves. Corporations usually require annual shareholder meetings where directors present reports and discuss issues affecting the firm.

Sole Proprietor

An individual owns their entire business, and there are no shares involved. As a result, they bear 100% of the responsibility for the success of the Company. There are no formalities associated with running a sole proprietorship on the plus side.

Starting operations

Once you’ve decided what type of entity will suit your needs, you’ll want to start operating under this name. To do so, follow these steps:

  • Registering your Business Name.
  • Incorporate.
  • Obtaining an Employer Identification Number.
  • Filing Articles of Incorporation.
  • Preparing Bylaws.
  • Creating Employee Handbook.

Getting Insurance

You’ll also need insurance coverage for your employees, customers, inventory, equipment, vehicles, property, intellectual properties, and more. You can get insurance through different providers like Lloyd’s of London, American International Group, Travelers, MetLife, Nationwide Mutual Insurance Co., Liberty Mutual Insurance Co., Hartford Financial Services Group, Chubb Corporation, Zurich Insurance.
Group, Farmers Insurance Exchange, Allstate Insurances, etc.

How Much Money Do I Need For My Startup?

As mentioned earlier, every business requires capital investment. The amount varies depending on several factors, including industry sector, business size, location, number of staff members, etc.

Conclusion

If you want to become a successful entrepreneur, you need to be smart about your decisions. It is essential to understand what you are getting into when starting a new business venture. This includes understanding all aspects of the business, including its legalities, financials, and even human resources. In addition, you should also be aware of the competition in your industry. You may find yourself competing with others already established in the market. If you fail to prepare correctly, you could end up losing a lot of time and money.

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