Taking the reigns of your career path by starting your own business comes with countless thrills. The excitement of being your own boss, working in an industry you love or want to contribute to, and creating unlimited earning potential is second to none. However, getting a business off the ground can seem like a daunting task. Many business owners are great at developing a product or service to meet specific needs in a certain market, but lacking a true understanding of what it takes to make that product or service successful is all too common. If you’re gearing up to hang your own shingle, here are the essentials of starting any business you need to know.
1. Focusing Your Energy
Most business owners are creatives, meaning they have tons of solid ideas that can provide the opportunity to earn a decent living. The problem with having so much creative energy is that business owners often find it difficult to focus in on a single good idea or project. If you’re getting ready to start a business, stay focused in a single area, for now. You may have grand plans for expanding into multiple products and services in the future, related or not, but to be successful out of the gate, you have to narrow your creative energy down to a single, well-thought-out money-making endeavor. When you split your energy across several ideas all at once, you end up giving less than your best to each one.
2. Structure and Legalities
Once you’ve got the business idea pinned down, it’s essential to understand what is required of you as a business owner from a legal standpoint. You’ll need a business name and address, and what’s known as an employer identification number, or EIN, which helps separate you as an individual from the newly formed business. Getting an EIN is required for some companies, but even if it isn’t a legal necessity, taking the simple steps to get an EIN is beneficial in protecting what you are getting ready to build.
In addition to a name and EIN, business owners need to take time to understand their options for the business structure. Having a corporation, an LLC, or operating as a sole proprietor all come with various benefits and some caveats that could impact your business and personal taxes, and liability. If you select a structure now, know that you can change it should a different structure work more to your benefit in the future.
3. Understanding the Financials
One of the biggest mistakes new business owners make is focusing solely on the product or service they provide without understanding the financials of the business. Regardless of the amount of revenue you are working with or the industry in which your business operates, money plays a crucial role in how successful the business will be. This means business owners need to understand their options for funding, the costs associated with running the business day to day, and why it is important to keep business financials separate from personal money management. If the thought of money or accounting makes your stomach turn or your forehead start to sweat, find a professional accountant or planner who can lend a necessary hand from the start.
In today’s business world, the opportunities to find customers and clients are endless thanks to the Internet. Anyone with a business idea can create a website or have an online store and begin reaping the rewards of business ownership almost immediately. While this vast playing field for businesses big and small is exciting, new business owners fail to tap into its potential when they aren’t visible to the masses. Invest in a strong website that clearly states who you are as a business, what you sell, and how potential customers can get in touch. Your online presence doesn’t have to be the best and the brightest, but it does need to exist even if you plan to run your business mostly offline.
5. Building a Pro Team
As a business owner, be sure to recognize your strengths as well as your weaknesses. No one is an expert in it all, and because business ownership requires so many strengths, build a team that fills in the gaps. An accountant, a financial planner or investment advisor, a human resources manager, a sales or marketing guru – all of these pros can give invaluable help when you don’t have the time or the expertise to do it yourself. Start building your professional team early on in your business to ensure you and your business as positioned for success along the way.