Do you dream of opening your own business? Being your own boss, setting your own hours, and doing something you feel passionate about are all powerful motivators to head out on your own.
But before you quit your day job, make sure you take the right steps to get ready for business ownership. The considerations below will help you plan financially, mentally, and emotionally for this big change.
5 Small Business Tips
Here are five tips for getting ready to launch your new business:
1. Find the Right Mentor
Having someone to talk to who has been through the often frustrating, sometimes exhilarating process of starting a business can help you in so many ways. They can offer you advice and first-hand knowledge you can benefit from.
For example, a mentor can advise you on the importance of paying your quarterly taxes or using the right bookkeeping techniques. They can alert you to potential red flags when dealing with clients. And they can give you suggestions when you have a problem you aren’t sure how to solve.
2. Write a Business Plan
You should know where your money is going and what your goals are. You need to make decisions like whether your company will be an LLC or sole proprietorship, which will impact taxes. Write down your financial projections and goals, and then record the actual numbers beside them so you can adjust quickly where needed.
Make sure to take writing your business plan seriously and get feedback from professionals you trust. Having a solid business plan in place could positively impact your ability to get financing to start or maintain your business.
3. Understand Your Market
You should know what your market looks like at both the local and national level. Ask yourself some questions to begin:
- What unique challenges do you face in your town?
- What does the competition look like?
- What can you do better than your competitors, and how can you market that?
Research successful companies that provide similar services, and note what you can take away from them and apply to your own business. Get to know your customer base and understand why and how they make decisions. You’ll benefit from knowing their mindset and can advertise accordingly.
4. Know Your Limits
Many new business owners think they can do everything themselves. They work such long hours during the first few years that they become exhausted and can no longer continue at that pace. Don’t underestimate how long it’ll take you to do even the simplest administrative work. Calculate this into your time, and remember that most things take longer than expected, especially when you’re at the beginning stages.
If you find yourself toiling for hours on something that only pays a few dollars, while neglecting higher-paying work, you’ll need to determine how you can work more efficiently and streamline processes that are dragging. Record your hours so you see where your time goes, how it impacts your profit, and learn how to adjust.
5. Keep a Healthy Work-Life Balance
Starting a new business is difficult. It can feel as though you always have a thousand things to do. You may have difficulty stepping away from work, even when you’ve already put in a 12-hour day.
You’ll burn out if you work too hard without enough breaks. Make sure to continue to do the things you love to maintain a good work-life balance. Go out to dinner with friends or have a family game night. Put aside a small amount of time every day as “no work” time.
Securing Financing for Your Business
Most businesses need some capital to start. This covers your startup supplies, employee salaries, and marketing. You’ll probably want a website, for example, and you’ll have to pay a web host to carry the site.
You can go about financing in several different ways, depending on how much money you need. If you need a large amount of money, you may want to look into a business loan. We offer business loans subject to credit approval with no or low fees, as well as low interest rates.
For brand new businesses, it can sometimes be difficult to secure business loans, as your company may not have established credit or stable income. In these instances, there are organizations you can work with called Small Business Development Centers that can offer free business consulting and at-cost training to support you as you get your new business ready to apply for business funding.
Some people rely on savings to start a new business. While it’s important to show potential lenders that you’re personally invested, as well, you won’t want to exhaust all of your reserves in case you run into an unexpected expense along the way.
A final option that some entrepreneurs choose is borrowing money from family or friends. However, this is sometimes a risk. If you can’t pay back the loan, it may impact your relationship. If you go this route, you’ll want to make sure everyone is on the same page and have your lending/repayment agreement documented.
With the right planning, you’ll be in good shape when you launch your business. Learn more about money management on our WalletWorks page.