When you are thinking about starting a business it is easy to get stars you your eyes. You may think mostly about how great it will be to be your own boss or how wildly successful you will be. But there are many more factors you should consider before forging ahead. In addition, there are also some things you may overlook when starting a business.
Here are 11 important things that are often overlooked when starting a business.
1. Permits, Licenses, & Dues
What kind of permits and licenses your business needs depends on what kind of business you are going to be running. You may need to set your a business entity or get a business license. There may also be paperwork involved in loans, if you have any, requiring you to pay processing fees. Additionally, you may have lease agreements as well as trademarks or patents.
There may be membership dues you wish to pay to local organizations, such as a chamber of commerce, in order to be in the know on local issues. Some professional organizations can charge several hundred dollars to become a member, so you may want to be discerning when choosing which ones to join.
Some of the fees you pay may only need to be paid once. Others you may have to repeat on an annual basis. These costs are sometimes forgotten when first starting a business. But, they should be considered and added to your business start-up costs.
Billing and collecting practices have laws that are both state and federal and must be followed. Find out what they are so you know what you can and can’t do in your business. Violating any of these laws could result in difficulty collecting what you are owed from customers and clients, so it is important to know your rights as a business owner.
You must think about whether or not the business you are opening is needed in your area. In other words, if there are already several stores in your town or area, what makes you think another is needed? Do you have unique products the competition does not offer, or great values on what you will stock? If so, you may be successful. But it can be difficult to become a successful business if the market in your area is already saturated with the same type of businesses as yours. Continuing to pursue such a business then could spell failure and be downright foolish to pursue.
On the flip side, there could be a huge market of opportunity if you are willing to simply tap it. You may need to do some market research and analysis in order to know for sure if your business has a chance at success.
4. Business Coach
It can be invaluable to have someone who will act as a mentor or business coach as you plan and prepare to open your new business. They know what it takes to run a business and can guide you through some of the pitfalls to help you with what you should avoid as a new business owner. Of course, business coaches can be hired, but having someone successful from your local area is beneficial as well.
5. Partnership Agreements
If you are going into business with a partner, make sure you take the necessary precautions to protect yourself and the business. What happens if you have a falling out with your partner? It can ruin friendships and sink a business if partners disagree and can’t come to a compromise. Set up legal agreements, even if your partner is a spouse or family member. Include who will handle money, business decisions, and conflicts. Spell out everything and involve a lawyer.
You must determine if it is the right time in your life to start a business, because it takes enormous amounts of time and dedication. Having the dream, desire, and passion to own and run a business is great. Actually following through is another thing entirely.
If you have a family, you will need to discuss it with them because they will be affected by your decision to open a new business. You must also think about whether or not you have enough money to begin such a venture. In addition, are you the right age? How is your health? The energy and work you will put forth in starting a business will take a lot out of you mentally, as well as physically, and must be considered.
Being willing to work hard is essential to starting a business, but what about knowledge? You need to have skills, knowledge and understanding to run a business. Are you familiar with the product or service you plan to sell? Have you worked in that industry before? If you already have a sense of the market as well as the product you have a better chance at success. If not, you will need to do research before taking on such a project. Talk to other business owners. Look up information online about how to start a business. There are plenty of resources that can help you get up to speed before you plunge into a new business venture you aren’t prepared for.
Before you get started on such a major project, do some self-reflection. While it can be a letdown and difficult to swallow, finding out ahead of time that you don’t have what it takes to open and run a business could save you heartache as well as thousands of dollars. It’s ok to find out being a business owner is not for you. It is possible to be successful and perfectly happy as an employee in someone else’s business.
9. Economic Conditions
You must consider the economy in your area before you start a new business. Do you live in a rural area that has been hit with hard times in the last few years? If so, opening a new business now may not be done with the best timing. What about the national or global economy? Will that affect your business? You must understand how the economy will affect your business in order to ensure your new business will be in demand. It is possible you may have a better chance at success by waiting a few years for the economy to bounce back if it has been in a recession.
Will your business be strictly online, or does it require a physical location? If so, you will need to consider how much space you will need and where you will be located. Do you plan to build, or lease a property in your area? Will your new business be in an area that will attract customers? If you put your business in a location that is close to others that may compliment it, you could have a greater chance at success. It also helps if it is easier to see visibly from streets or highways and easy to find. Is there room for growth if you need to add onto an existing building, or are you landlocked? These are all things that need to be considered when you open a business and are sometimes not thought about ahead of time.
11. Back-up Plan
Do you have a back-up plan for your business? What if it doesn’t take off right away? Can you cover your personal bills as well as business bills as you grow your business? Can you work at another job while you start your new business on the side to keep money flowing into your personal life? It is important to think ahead about all of the financial aspects and worst case scenarios in order to plan for the worst while hoping for the best.
Opening a business of your own is a wonderful dream to have. Whether or not you should follow through could be another matter altogether. Consider these things before you start a business to help ensure your business succeeds.