Make Sure You Set Your Business Up Right with These Steps
Setting up a brand-new business can be a daunting challenge. The actual process of establishing said business is deceptively simple and yet, there are mistakes that can be made that can later limit choices you may not have even been thinking about when you first started things. You may not know exactly what you want your future business to look like, but it’s important to consider your options now and how they may impact how you run things down the line.
Here, we’re going to look at a few of the most important considerations you should be making when starting your business and what mistakes you want to avoid.
Make sure you have a business plan in place
The idea of your business might sound like a money-maker, but how can you be sure that it actually will work? While never a 100% accurate prediction of the future, a business plan can be an incredibly important document for helping you outline exactly how you’re going to establish the way that the business runs, as well as how you’re going to make a profit, and what targets you need to start hitting in order to ensure that profit.
Know what resources you need and get them together
Within the business plan, you might be getting a good idea of what resources you’re going to need to run the business well, such as the property, the tech, the supplies you may need, and so on. All of these resources are, of course, going to cost money. To that end, you have to take the time to get an idea of what money and resources you need and, more importantly still, how you’re going to get them. For a lot of businesses, this might mean doing some borrowing. Others might want to try and bootstrap it themselves. Whatever method you use, having a strategy for how you fund the running of the business is crucial.
Choose the right structure for your business
One of the most important steps you can make right at the beginning of setting up your business is what kind of organization it will be. Each type of organization has its own pros and cons, with things like sole proprietorships being relatively easy to manage, while limited liability corporations offer some distance between the business owner and the business itself, which is particularly important in businesses where legal liability is a more frequent consideration to make. Do your research and make sure that you choose the right business structure for you.
Start preparing for taxes right now
The sooner that you start preparing for your taxes as an employer, the better. Make sure you’re keeping a close eye on your finances with the help of accounting software. If you’re employing others, then you should apply for a filing service for federal EIN to make sure that your tax ID ready. Similarly, get to know your other tax responsibilities, such as the annual payroll tax forms you have to give to your employees, forms you can request for 1099 workers, social security number verification and the like.
Do your market research
A lot of businesses can find that they’re not getting the customer base penetration they were expecting or that their marketing strategy just isn’t working as well as expected. This often happens because they didn’t pay close enough attention to their customers. If you step into a competitive market saying and offering the exact same things as your competitors, what reason would customers have to choose you? Find your niche or what you can be competitive in before you rush into marketing and selling.
Know what you can outsource for
When starting your business, you want to ensure you’re not spending too much from your cash flow. It can hold you back from becoming profitable for quite some time. As such, instead of hiring the labor you need, you should always consider what might cost less to outsource. Typically, you should be outsourcing the tasks that you don’t require help with daily, but for a limited time or occasionally. You may need to hire for that work at some point, but that doesn’t mean you always have to do it immediately.
There aren’t a lot of mistakes you can make in the setup of the business that will largely undermine your ability to run it freely in the future. That said, making these decisions well now can save you the headache of working around them in the future.
