Starting a business may seem like the pathway to financial freedom. However, there is much more to starting a business than you might imagine. Before you can begin the mechanics of opening your very own business, there are a few things to consider. The very first task that you need to accomplish is to find the money to cover your start-up costs. No matter what type of business you want to start, you will need enough money to cover beginning operating expenses. If you are opening a service industry business, you will not need to purchase any inventory; however, there are other expenses that are necessary. For instance, a simple example is the cost of opening a sole proprietorship.
A sole proprietorship is a business that is owned and operated by one person and it is the simplest to open. The startup costs are less than other types of business ownership, although the funding may be more difficult. Often, banks and other lenders are unwilling to lend large sums of money to untested businesses without collateral and suppliers do not usually extend credit until after the business has been established. It is easier to borrow from close friends and family in this case. Some of costs associated with a start-up are state and county licenses, advertising, leasing or renting a facility, supplies, and utilities. The costs vary with the type of business and it can cost as little as $210 and take about 4 days to get set up. At the very least, you will need to register the name of your business, apply for a tax identification number and, if you plan on having employees, set up unemployment and worker’s compensation insurance.
The next step would be to get the word out. You may have started a business in a common industry, but you must have a something the others do not. It could be exceptional service, filling a need that others may have not noticed or providing more for the same amount of money that other businesses charge. No matter what it may be, potential clients need to know. Be very creative in your advertising, but do advertise. With all the traffic on the internet, you don’t need a large advertising budget. Many avenues of advertising are free or inexpensive. If you have a computer and a printer, you can make your own flyers. Using a power point application can help immensely. Don’t waste money on having a printing shop make them, it is not cost effective. You can also save money by doing your own legwork. Also, you must have business cards printed. In this case, it will probably cost less to use an online printing company than to make your own. If you are not ready to build a website, than use Facebook as your advertising media. Many small businesses fail in the first couple of years because their bottom line bottoms out. Wait until you have steady revenue before you spend too much in the beginning.
When you are just starting out, be willing to do much of the work yourself. No one knows as much about your business as you do. Keep your own records and do your own bookkeeping. Accounting can get complicated, but until you have your business established, it is reasonably straightforward. If you need to, you can find a couple of simple classes or articles about accounting to get you started and many online classes are free. Make sure that you keep all your receipts and use log books. When you are ready to turn the accounting tasks over to someone else, ensure that you have trust in this person and implement internal controls. Keeping accurate books is the lifeblood of your company. You will need to know how much you are spending in order to keep revenue flowing.
There is an inherent risk in owning your own business as two out three businesses close in the first six years. You can beat these odds by being present and paying attention. Establish a rapport with your clients and your employees. Stay on top of vendors and suppliers and educate yourself about your small business tax liability. If you delegate responsibilities too soon, you have less control over the outcome. Allow your business to grow and mature before you take an executive role.