Starting a new business can be an intimidating prospect. There are many moving parts to contend with, and it can be challenging to make sure that everything is in order. Fortunately, there are a series of concrete steps that new business owners should take in order to start themselves on the right path to success. Saeed Torbati details these steps and explains how they can help any new entrepreneur enhance their business prospects.
Writing a Proper Business Plan
Making sure that your business plan is solid is the first step toward having a successful company. Without a strong business plan, it will be difficult, if not impossible to secure funding for your venture.
The elements of a business plan are as follows. First, you will need to make sure that you have a clear mission or vision statement. This will help you articulate the type of business you are trying to start. Next, you need to describe your company or product, explaining how it is set apart from competitors.
The next step is a detailed market analysis. This will show where your business fits into the local community and show a clear map of your suppliers and potential customers. Your local chamber of commerce or economic development office may have helpful resources available for you.
You will need to name and describe your management team. You will need to explain their experience and what they will bring to your business.
One of the most important parts of your business plan is your marketing plan. You need to be able to show future lenders how you plan to connect with potential customers and suppliers.
Finally, any business plan needs to have a solid cash flow statement, listing the business’s financial needs as well as all sources of money coming in. Revenue projections are also included.
Calculating Year-Over-Year Growth
Another valuable offshoot of your business plan is an analysis of your company’s year-over-year growth or YOY. This is calculated by comparing growth over a one-month period against the performance over the past twelve months. These statistics may be harder for new businesses to put out, but it is a valuable goal to strive for. This statistics goes beyond the immediate calculations of cash flow and expenses and shows how your business will perform over a longer period of time. This will make your business more attractive to lenders and venture capital companies.
Secure Funding
You will need to take a careful look at all of your funding options. It can be very hard for new businesses to secure the funding they need to get started. In this case, a personal loan may be appropriate. You can also find individual investors or market yourself to angel investors or venture capital firms. You will need to be aware of the extra steps you must take to be attractive to lenders, and you must be prepared for a few lean years when your business is just getting started.
Handle Money Carefully
One of the most vital aspects of a business’s survival is handling money with great care. Make sure that your books are transparent and honest. If you are not personally well-versed in financial topics, you should consider hiring an experienced bookkeeper or accountant.
You will also need to pay close attention to your tax liabilities. Tax law can be complex, and you could set yourself up for serious problems if you do not handle your taxes properly.
Hire Wisely
Especially if you are starting a family business, you may be tempted to put all of your loved ones on the payroll. Resist this idea to the best of your abilities. When hiring, you should be sure of each employee’s potential to benefit your company. This applies to friends and family just as much as it applies to people who are outside hires.
If your potential employees do not take your business seriously and are only looking for an easy paycheque, your business will be doomed to failure.
Be Honest with Yourself
Finally, it is crucial that you are honest with yourself about the real-world value of your business. Too many prospective business owners are only concerned with making money and have no concept of how to start a company from the ground up. They are not ready to put in the 24/7 work that a new business requires to succeed.
Without putting a significant amount of human and financial capital into your new business, you are likely to fail. New business owners should be ready to devote their lives to their companies and to endure the many challenges of entrepreneurship.
In Canada, over 30 percent of new businesses fail within the first ten years. If you pay close attention to the points described by Saeed Torbati, you will have a better chance of success and prosperity.
Setting Yourself Up for Success
While this article points out many of the pitfalls of starting a new business, it is possible to succeed and for your new business to thrive. The main points you need to keep in mind are creating a strong business plan, hiring wisely, and handling your tax and bookkeeping responsibilities carefully.
If you pay close attention to all of the moving parts that make up your business, you will have a far better chance of success.