Things To Know When Starting a Business

Running a business takes commitment, hard work and dedication. You must never underestimate the potential of your business. A small business today can turn into a multi-million dollar company five years later. So make sure you lay a solid, flawless foundation for your business from the get go.

Most entrepreneurs, including me, started their journey knowing nothing about business, marketing and etc. This resulted in some bad judgement calls that came back to haunt our business in the long run. Below are 10 things I wish I knew back when I started my first business.

1. A business plan is mandatory

Most people don’t bother to create a business plan if they are not seeking investments from 3rd parties but that’s a huge mistake. No matter how small your business is, it still needs a business plan.

Writing a business plan is the best way to test the feasibility of your business idea and it will help you a lot in the long run since you can’t secure funds from banks and investors without one.

Your business plan should cover the following topics

• Executive summary

• Business description

• Products and services

• Sales and marketing

• Operations

• Management team

• Development

• Financial summary

2. Discounts are bad for new businesses

Selling products and services at unsustainable prices is never a good idea. Unless your business is functioning really well financially, don’t think about giving discounts. Instead, think of ways to attract your customers in the long-run.

3. Don’t hire friends

Do not bring your personal life into your business. You might be tempted to call your friend who is really good in accounting to help you out in your business but generally this is not a good idea.

When the time comes where you have to fire your friend for not putting in enough work, you will struggle a lot no matter how gutsy or straightforward you think you are. You will definitely hurt his/her feelings and your friendship will never be the same as before.

It’s better to keep your personal and business life separate from one another.

4. Have plenty of cash reserves

We covered a lot about your business but what about you? Who will pay for your living expenses?

Before starting a business, make sure you have enough money to survive for at least 6 months without any income from your new business. It’s very rare for a newly found business to start earning profits within the first few months so, prepare yourself.

Doing a part-time job alongside your business is even better because then you won’t have to rely on your precious cash reserves that much.

5. Just rent, don’t buy

You need to save as much money as possible for your own personal expenses. Keep your business’s capital at a bare minimum.

One huge mistake made by most entrepreneurs is investing almost all of their money buying office and storage space. Why do this when you can just rent them?