When starting out a new business, there will be a constant barrage of well-intentioned acquaintances giving you advice. Some of this advice will be great, some will be less-than-great; some will be extremely applicable to your business, some not so much, and some will be completely contradictory to what you were told the day before by someone else.
All of this advice, while well-meaning, can be overwhelming. So to help you through the process of deciphering the advice, here are 8 tips that are applicable to any new business in any industry to help get you off on the right foot.
Create a Business Plan – By setting goals, projections, and expectations to paper, you can begin tracking successes and failures. This will help you to determine actual startup costs, determine what success looks like in the first few years, and ensure you can afford your business if things start slow. Your business plan should be at the heart of everything you do.
Protect Yourself – While it may not seem important in the beginning, creating the appropriate legal entity for your business is extremely important. If you do not understand your corporate structure, you may find yourself at some point in the future personally liable for a business issue, which can not only destroy your business but your personal finances, as well.
Manage Costs Early – There are many costs associated with running a business. This can be everything from keeping the lights on to payroll. Whatever your costs are in the beginning, do everything possible to keep them down. You probably don’t need a large staff from day 1, and you probably don’t need to spend every penny you have on marketing in the first month. Stick to your business plan and only use what you need, otherwise, you will dry out your reserves before your business ever even starts.
Know Your Business – If you can’t clearly articulate what you do, that can lead to problems when trying to sell yourself and your business. Have an elevator pitch ready for prospective clients, and be sure you fully understand where you fit in your marketplace.
Pay Yourself as Little as Possible – Pay yourself nothing, if you can afford it, otherwise pay yourself the bare minimum to live. Taking money out of the business, especially early on, can lead to long-term issues for your business. You need that revenue rolling back into things like marketing, hiring the best talent, and expanding business offerings.
Have Processes – Everything you do should have a process. This will help you to ensure things are always done right, and will help you stay organized down the road. Taking a few minutes today to put a process in place will save you countless hours in the future.
Hire the Right People – One of the easiest ways to run yourself out of business is hiring the wrong people to work for you. Whether a cashier or a CFO, finding the right person is important, and will impact revenues. A good employee is worth paying more for, and while you may not want that expense today, the savings through retention, good customer service, and a good work ethic will more than pay off.
Know When to Quit – If an idea just isn’t working, know when to stop. New business owners get as many things wrong as right, especially in the beginning. But those who succeed know when to try something new. If a new idea isn’t panning out, then try something else, then something else after that, then still something else after that. Keep on trying, keep on changing, and know when something isn’t going to work. Remaining ardently behind a bad idea will kill your business.
There are a million tips you will hear as you start out as a business owner, but if you stick by these 8 as you begin, you will give yourself a fighting chance to make it to a place where you can begin to weed out everything else.
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