The Top 4 Tips For Up-and-Coming Entrepreneurs
Today seems to be the era of the entrepreneur. For a lot of young adults in the workforce, there doesn’t seem to be the perfect job. Creative, passionate, intelligent people sometimes have a hard time settling into the typical office routine. This is why, when you have what seems to be the perfect idea, you may be tempted to jump straight into starting your own business and becoming an entrepreneur. There are a lot of benefits to becoming an entrepreneur. For one thing, you can be your own boss — and have control of your own destiny. For another, if you start the right business you may very well have more earning potential than you would in the type of day to day job that you would enjoy less anyway. Many of us get excited when we watch and read stories about successful business owners. And we don’t want to put a damper on that, as with the right concept, attitude, and strategies, you could very well own your own successful business in the future. But it’s important to take note of tips for new entrepreneurs and to remind yourself to be practical.
Don’t let yourself get too caught up in the idea of a business before vetting it properly. For that matter, you can balance your passion for your idea with confronting practical concerns head on. The more careful you are when starting your business, the more likely it will be that you’ll take it from fantasy to reality. Because the reality is that when starting a business, you’re not only creating a job for yourself, but a job for other people. The ideal goal is for your business to take off, and be successful enough to employ other people. But you can’t get to that point — and sustain it — without doing your homework first. With that being said, we’re going to delve into some of our top tips for new entrepreneurs. While everyone has different business ideas, and different approaches to starting a business, some tips for new entrepreneurs apply to everyone. Let’s dive in, and find out what’s more relevant to you and your future business. What do you need to keep in mind before launching it in full?
1. Startup Costs
Whether you’re starting a doggy daycare or an auto body repair shop, you’ll need to invest a certain amount of money in your business before you can make money. Of course, a lot of us have a hard time coming up with the money to start our businesses. But the fact is that you can’t move forward without some level of capital. This amount may vary greatly, depending on the type of business you want to start. But most small businesses don’t break even over the course of their first year and it can take a while for you to earn the amount of money necessary to make a profit.
So, where does your startup money come from? Of course, you’ll want to be frugal and save, in order put as much of your own money into the business as possible. But there will likely be a point at which you need more money. Some of this can come from investors. However, you’ll have to convince investors to invest in a business that hasn’t even started yet, which can be quite difficult. Another issue that a lot of small business owners confront is the fact that investors often want some degree of ownership of the business. If you’ve yet to launch in full, do you really want to give up any degree of ownership of your business? While it can help offset the costs in the beginning, you may end up earning less from your business in the long term. If your small business ultimately isn’t as successful as you expected, or perhaps doesn’t succeed at the speed with which you would expect, your investors could become upset, causing you a lot of issues in the long term.
Perhaps one of the most important tips for new entrepreneurs to remember has to do with a mean for obtaining funding: a loan. There are loan programs available, specifically for up and coming entrepreneurs. Small business loans can help cover your startup costs, and greatly offset the financial burden you’ll undertake in the beginning of your journey as an entrepreneur. Before you even begin looking for a lender, of course, you should create a business plan, as well as an expense sheet and financial projections. You should be able to project what your business will make — realistically — within the next five years, and back your projections up with data. Be as prepared as possible; because you must take that with you to different banks and credit unions in order to get a small business loan. You’ll want to speak to multiple banks and credit unions, of course. That way, you’ll have the best chance of getting a loan that works for you. If you don’t receive a loan, you can consult these tips for new entrepreneurs again — and take into mind why you were rejected. Maybe you’re not ready yet. Or maybe a small business loan isn’t for you, and you should seek out other options like investors, self-funding, or even crowdfunding.
2. Legal Aspects
Perhaps one of the most important tips for new entrepreneurs to remember is that you can’t forget the legal aspects of starting a small business. Once you start to transition from a dreaming entrepreneur to a true business owner, you should seek out a lawyer to help you along with certain issues. The last thing you want to do is spend more money than you should before finding out that you missed a key legal component of starting your business. The types of legal advice you need, and the types of lawyers you may consult with, can vary depending on your business.
Some legal concerns are universal for all business owners. For example, you should seek legal advice regarding workers comp no matter what type of business you run. Yes, your business may seem sedate. But if you employ people, they can potentially get hurt on the job and seek workers comp. However, not all small business owners will need to understand patent laws. While one of the tips for new entrepreneurs that many people guess has to do with getting a patent — not all businesses operate off of proprietary ideas or technology. If it does, the small business owners in question should certainly seek help from lawyers. But you don’t want to jump ahead of yourself and spend more money on legal fees than you must. Keep in mind that you shouldn’t ask lawyers to work on material that they don’t specialize in. Your family attorney may not be the right person to help you draft contracts for employees. The last thing you want is to open yourself up to legal action from former employees or clients down the road. Wading through legal waters may not be your idea of starting a small business — but it’s one of those practical elements than an entrepreneur cannot neglect.
When looking through tips for new entrepreneurs, you’ll probably see a lot of tips that advice you on big ideas and turning your dreams into a business. Many entrepreneurs are naturally creative, which means that they want to focus on the big picture rather than the details. But, as we’ve mentioned previously, starting a small business is about more than just creating a job for yourself. You’ll want to create jobs for not just anyone, but the right employees who will successfully support your business. This means setting up a competitive benefits package for your potential employees. In this day and age, a benefits package can make or break whether or not an employee takes a job. You can’t just prioritize the types of benefits that you need — you should look at the job market, at your competitors, and at what similar jobs offer to candidates. A competitive benefits package will cost your business to small degree, but it will offer a return in the form of qualified employees, who will in turn help launch your business. Usually, a good benefits package includes quality health insurance plans, which will ensure that your employees receive proper healthcare services. It should also include sick leave, paid time off, and retirement benefits. Another thing to consider is the fact that many employees expect their employers to contribute to a 401K as well. Many don’t think about benefits packages when compiling tips for new entrepreneurs, but it can in many ways make or break the future of your small business. Remember that the right employees are key to your success.
Many of us consider the upkeep required when we take on a new home; we know what is expected of us as tenants of a house. But what about the physical aspects of keeping up your small business? One of the tips for new entrepreneurs that can easily be overlooked is to remember the upkeep required when running a small business. It’s exciting when your business is successful enough to move into a building. Chances are that you’ll be renting your space, which means that you’ll not only need to approved as a tenant, but maintain the space to your landlord’s expectations. Often, commercial real estate is leased with the expectation that the tenant will cover most of us, and perhaps even all of the upkeep costs. This includes regular building maintenance, energy costs, and cleaning costs as well. You’ll want to make sure that you hire the best possible cleaning services for your small business. If your business is customer-facing, this is especially important. You’ll want to make a good impression, and it’s key to keep a clean space. Even if your business isn’t customer facing, cleanliness is an important part of creating a professional and safe environment. For that matter, you need to hire a cleaning company that you can trust. After all, they’ll probably be at your business after hours. Essentially, you’re outsourcing an important part of your business. While this may not be one of those exciting tips for new entrepreneurs to remember, keep your small business and its space clean and well-maintained cannot be forgotten. Nor can you forget the costs involved in your business’s upkeep.
There are many benefits to becoming a small business owner, but you shouldn’t let yourself get too eager too early. Unfortunately, the Small Business Association estimates that just 51% of businesses continue beyond five years. You need to make sure that you stay organized, and part of that is to keep these tips for new entrepreneurs in mind. At the same time, don’t let them discourage you. These tips aren’t meant to keep you from starting a small business in the first place. Rather, it should simply be a part of making your small business really happen. You should be excited about getting these aspects of your small business in order. The sooner you do so, the sooner your business will really fall into place. In the long term, you’ll be glad that you approached your business practically, without getting too far ahead of yourself. Once your business is running smoothly successfully, your forethought will pay off.