Think you want to start your own business? Be sure to get the facts straight before you dive into the world on entrepreneurship.
These days it seems like just about anyone can come up with an idea, but it takes a truly dedicated person to see it become a reality. Gearing up to launch your business can be a great undertaking with significant risks and rewards.
Binge-watching a few episodes of Shark Tank might get you excited to move forward with your idea or product—except, when roughly 90 percent of new businesses fail, the best thing you can do to ensure success is to play it slow and safe.
Keeping the following areas in mind can help to take the edge off some of the more common startup setbacks.
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Determine Your Business Plan
A great idea is nothing without a plan. For a small business or startup, your business plan needs to be as airtight as possible so that potential investors or lenders have a firm grasp on what you’re offering. A business plan should essentially be a blueprint for your startup—one that outlines the operational details and spells out a SWOT analysis (the business’ Strengths, Weaknesses, Opportunities and Threats).
Within the plan should be strategic goals towards marketing to a target audience, the breakdown of costs associated with launching, possible revenue streams, competitor analyses, and a fleshed out understanding of the brand personality and offerings. A business plan is usually the first foot in the door when meeting with investors, so make your first impression count with a well-thought-out and executed layout.
Related Article: 7 Best Free Business Plan Templates
Cover Your Ass(ets)
Becoming familiar with the legalities of establishing your business will only help you in the long-run. Be sure to seek legal and tax advice early in the process of establishing the startup. The upfront expense will be worth the time and resources and will significantly reduce the likelihood of legal and financial snags down the road.
Most legal firms that specialize in small business are willing to work with early-stage companies through fee-alignment plans. Start your business off on the right foot—and with the most appropriate legal form. The determination of whether the business is an LLC, a C or S-corporation or operates under a limited or general partnership will affect the taxes that are paid out.
Legal advice also extends to keeping in line with compliance laws with angel investors or can help flesh out employee contracts and documentation.
Prepare To Talk
And talk and talk and talk. Networking is key to funding and expanding your professional contacts. Meet new connections or strengthen relationships with old friends by attending any relevant industry events in your community.
Asking for money is never easy, but you can certainly make the funding outreach process move along smoothly with a strong business plan and confidence in your idea. You never know how schmoozing at events and getting cozy with fellow entrepreneurs and venture capitalists will pay off—there is a lot of advice, support and (most importantly) money to be shared.
However, it’s important to remember to go to these events with quality in mind. It’s better to make a few decent, meaningful connections than to amass a pile of business cards that you can’t put faces to.
Set Up A Work Space
You can have the best new idea, but it’s difficult to be taken seriously by investors or partners if your meetings are being held at the local coffee shop. Establishing a designated workspace for your startup is a great way to show others that you are serious about moving your business forward.
Even if your company is in its early stages and can’t yet justify renting out a full office suite, there are many options that are available to present a professional image. From virtual offices with monthly appointed private office time to professional meeting rooms that can be rented on an as-needed basis, your company will have the opportunity to be flexible and grow as your business needs change.
As for the long hours working towards developing your business plan, networking with partners, and being glued to Shark Tank marathon sessions for informal guidance, it will all be worth the effort and you can rest easy when you turn your passion into profit. Take this nugget of wisdom from Mark Cuban:
"The key in business and success at any endeavor is doing your best to control your destiny. You can't always do it, but you have to take every opportunity you can to be as prepared as—and ahead of—the competition as you possibly can be."