6 Important Steps to Take Before Starting a Business

Before you consider starting a business, you have to make sure that you are prepared for it and have done your research. Whether the economy is up or down, there are certain things you need to do before you make the leap to quitting your day job. If you do your research, your chance of success is greater.

Make a Plan

You make a plan for how to renovate your home, for a project at work and how to reach an athletic goal. It makes sense that you would make a plan before starting a business. You have to know where you are going and how before you can put your dreams into action. Many people get overly excited about their new business venture and jump right in. Instead of impulsively rushing off to be an entrepreneur, you have to map it out first.

Get the Right Financing

For your business to succeed, it has to be financed properly. Many businesses do not earn a profit for the first few months or years. You have to make sure that your business is able to operate for at least 6 to 12 months without being profitable. You can ask a friend who owns a business to review your financial plan. A business coach, a loan officer or an accountant can review your business plan and make sure that you are not overlooking any important factors.

Structure Your Business the Right Way

When you are starting a business, you have to incorporate it. The legal structure of your business is important for liability, profitability and day-to-day operations. If you are not sure how to structure the business, talk to a CPA or a lawyer to find the right fit.

Start Small

If you overextend yourself, a good business idea could fail. While you want to be the global leader in your industry, you have to start somewhere. Starting small allows you to learn the ropes with as little risk as possible. When you make your business plan, consider options that can lower your overhead. Instead of hiring a full-time employee, you might want to start with freelance workers or independent contractors.

Develop a Website

For your business to succeed, customers have to find out about it. Many potential customers will research a company online before they ever set foot in the door. You need to create a website to boost your online presence and overall visibility. This website might be the first interaction you have with a customer, so it needs to speak to how you provide value.

Create a Smart Marketing Plan

Your customers will determine whether your business is a success or failure. You have to make sure that you have a marketing plan in place before day one. You need to decide what products and services you will sell. Often, small businesses do better when they market to a smaller niche or geographic location. Once you know who you are going to market to, you have to decide how to reach your target audience. As a start-up, you have to make sure that your marketing budget stretches as far as possible.

There are many factors to consider before starting a new business. Make sure you perform your due diligence to increase your chances of success.