6 Key Considerations Before Starting a Small Business
Starting a small business is never easy. Many small businesses fail in the first year and countless others slowly dwindle down over time. You may have a great idea, but if you want it to be a long-term success there are several important things you need to consider:
1. Are you cut out for starting a business?
Are you realistic about the risk of failure? Are you ready to handle the rejection if customers don’t always love your products or services? Are you primed for changes to your lifestyle, such as new distractions, responsibilities, and long hours? The answer to all of these should be yes.
2. Is this the right business for you?
Maintaining a successful business requires a combination of passion, knowledge, determination, hard work, and a smart business plan. Make sure you are both passionate about what you’re doing and knowledgeable about what it will take to make the business a success.
3. What resources do you need?
Leasing a space is just the beginning. You will need to purchase equipment, market your business, get everything ready with the first supply order, and more. Many supplies will also need to be purchased on a monthly or even weekly basis, whether you’re running an office or manufacturing products, or operating a restaurant.
4. Who will be on your team?
It’s a good idea to establish an advisory team before the business gets off the ground, including a financial consultant to make all the right preliminary decisions, as well as accountants who will be there to advise you along the way. Once you have a solid plan in place, you can think about who you will hire on as staff, making sure they have the skills and know-how to hit the ground running.
5. Do you have business insurance?
If you fail to set up small business insurance, there’s no telling what calamities could occur that leave you high and dry and without a penny of your invested money to show for it. From natural disasters to lawsuits, to employee injuries, to the death of a business partner, there’s no telling what could happen. You need to make sure your investment is protected.
6. Are you ready to fork over the funds?
Before starting a small business, it’s necessary to make a detailed list of all the costs you will incur to get the business off the ground. And remember, if things go wrong, it will fall on your shoulders. Many small business owners have to tap into their household budget, even their mortgage, to keep their business going. Are you ready for everything this is going to take?