Are you a start-up entrepreneur hoping to make millions with your business idea? Starting your own business is an exhilarating, terrifying prospect. One the one hand, you’ve got a great vision of all the exciting things you want to accomplish. On the other, you’ve got a great fear that your dreams will fizzle out and zap you of your money. Here are four tips to help you achieve your business dreams while protecting your cash flow at the same time.
Start With a Business Plan
Image via Flickr Pink Sherbet Photography
It’s one thing to know what you want to do with your business. It’s quite another to write it down on paper so that others will understand your goals, too.
A clear, concise business plan will help clarify in your own mind what you’re doing, and it will also help with any loan requests you make of financial institutions. But a business plan does more than just that. It protects your financial future.
This little document, which could be the length of a book or simply a page, assigns value to your business. Attorneys, accountants, and other consultants can use the information this document provides if you happen to encounter any financial or legal bumps down the road. New hires, especially new managers you might invite on board, need to see this document in order to internalize the heart and soul of your business the way you have.
Indeed, your business plan is a written tool for understanding both the big picture and the little details of your enterprise. It’s not enough for you to know what you’re doing; everyone else needs to understand your plan, too. If you need a little help creating a business plan for your small business, visit www.teneric.co.uk/businessinfo/business-plan-preparation.html for all the information you’ll need to get started.
Create Your Accounting System
Not everyone is great with numbers. That’s why accounting software products like QuickBooks are such a hit. You don’t have to use QuickBooks, but you should have a trustworthy accounting system in place that will help you monitor sales, inventory, and payroll. It’s easier to set up an accounting system before you start to accumulate revenue and data; if you want until after things get rolling, you may find yourself backpedaling to get organized and wasting one of your most precious resources: time.
Safeguard Your Personal Assets
If you don’t protect your personal assets from the get-go, you could become personally liable for business debts you incur down the road. Sure, you hope you’ll never be in the position to sustain a loss. But lawsuits and recessions happen, and you could get sucked into the vacuum if you don’t protect yourself early on.
Buying business liability insurance is a wise move, but it won’t cover all your bases. Take the time to legally label your business as either a corporation or a limited liability company (LLC). Most small businesses end up going the LLC route, but if you’re dealing with multiple investors or other broad business issues, you might fare better as a corporation. In any case, you should do your research before jumping in. It could save you later on.
Pinpoint Your Risks
What types of risks does your business face? You can’t avoid them, but if you identify them, you stand a better chance of overcoming them.
Here are some common risks faced by start-ups:
- The risk of an ineffective team. Your team of employees, no matter how large or small, is new and unproven. You don’t know how good they are yet.
- The risk of a saturated marketplace. Finding a profitable niche can be tricky. If lots of other businesses are offering the same product as you, that’s a risk.
- The risk of poor timing. You might feel confident that you’re in the right market, but will the market be ready for you? Timing has much to do with it.
Most people go into business to make money. Paradoxically, the loss of money is many a start-up entrepreneur’s greatest downfall. While it’s true that the economy is somewhat unpredictable, you will enjoy more control over your money and other assets if you take steps to protect them in the early stages of your business career.