Owning and operating your own business has both positive and negative aspects. While it can be one of the most rewarding (and lucrative) decisions you can make, being your own boss can be a stressful and demanding experience. It is always good to look at both the pros and cons of business ownership before opening a company. Once you’ve decided to start your own business, it’s imperative to start off on the right foot by following the appropriate steps to launching your own business.
In this blog post, Swyft Filings will take you through the pros and cons of new business ownership and the steps necessary to get your business off the ground.
Benefits to Starting Your Own Business
Many entrepreneurs make the decision to start a business to generate a new source of income, or in hopes of making more money than they do at their current job. While it is true that many companies take a while to turn a strong profit, a financially sound business can mean big things for an individual’s income potential.
A flexible schedule
Many business owners are motivated by the fact that they are able to work when and where they want to. The fact that you can take care of your business responsibilities on your own terms is a huge benefit, especially for those with family obligations.
Few lifestyles offer the type of freedom than that of a business owner. Knowing that you are the one making all the day-to-day decisions, completely in charge of what you do (or do not do), and that your decisions and hard work are the reason for success is an attractive reality for many people.
Making a difference in your community
Running a successful business provides the opportunity to positively impact the lives of others. Whether it is through creating jobs, operating a business that meets a need in your area, or via philanthropy, talented entrepreneurs are an asset to their community.
Drawbacks to Starting Your Own Business
All of these benefits come at a cost. Many people find that being a business owner is:
No matter how you break the numbers down, a majority of new businesses fail. While it is possible to enter any market successfully, it requires hard work, talent, and a great deal of knowledge. Due to the increasingly competitive nature of business, you can do many things well, but still have a hard time becoming successful.
A huge time commitment
As long as your business is open you will need to keep an eye on its operations, and emergency situations are bound to come up. As a business owner, you are likely going to be the one to solve any urgent problems. Do not expect to ever be able to completely take time away from running your new company.
Business owners have to be versatile and knowledgeable individuals, especially when their company is young. When first starting your business, you will likely need to work hard to keep up with your organization’s marketing, sales, accounting, and day-to-day operational aspects—and that is just a few of the things you will need to pay attention to.
A lifestyle change
It is likely going to take time to turn a profit, no matter what industry your business serves. With that in mind, no widely successful business was built overnight, and creating a profitable business in order to sell it is not easy either. If you decide to pursue business ownership, be ready to put in a great deal of effort over a long period of time.
As a business owner, there is never going to be anyone to turn to when you can’t find an obvious solution to a problem. You are the boss, for better or for worse. This can put a great deal of pressure on anybody, no matter his or her personality type. If you are going to run a business, be ready to be the one your employees look to for answers.
Ready to start a business? Get it right from day one
There are several steps that need to be taken to ensure that your company is primed for a successful launch. Be sure to pay close attention to these three aspects of forming a new business; make sure that your new company is running efficiently from day one.
1) Create a formal business plan and decide on the structure of your company
Having a formal business plan is exceedingly important when launching any new business. Having a solid plan, in the beginning, gives you a set of clearly defined goals and objectives that will focus your day-to-day operations. In addition, a well-written and organized business plan is an absolute necessity for successfully securing any outside investment or financing.
Different corporate structures offer different benefits to business owners, while also dictating different requirements. Be sure you choose the most beneficial structure for you and your business. Once you have decided on which structure is right for you, file the necessary forms to incorporate or form your business.
2) Obtain all required permits, licenses, and tax I.D. numbers
All corporate entities are required to have a federal tax ID number that is used to identify the business (much like a Social Security Number). This identification is used for a variety of financial reasons: paying taxes and applying for credit, for example. Be sure to apply for this number early on, and store it securely to prevent any corporate identity theft. Take the time to make sure that you have all relevant local and state-level licenses that are required for running a business in your industry.
3) Find and hire relevant business professionals
Having a skilled and reliable attorney and accountant can be a great asset for any business. A proficient attorney can help protect you in the event of any unforeseen legal problems. An accountant can often be a great investment, as they will be able to assist you with legally minimizing your tax-related expenses, and help ensure that you are correctly keeping track of your financial assets. Talking to other business owners and conducting research using professional directories is a great way to find professionals that will fit your needs.
4) Open a business bank account(s) and obtain business credit cards
Even if you are running a small business, it is integral that you keep you and your company’s finances separate. Typically, your financial institution will be sure to provide you with an in-depth set of requirements for what you will need to open up your business’s first bank account.
Using credit cards for your company’s payment needs is a great way to establish credit early on, and keep track of your cash outflows. Just be sure that you are not spending more than you can afford to pay back quickly.
For a majority of new businesses, maintaining a strong liquid cash flow can be difficult. By establishing credit with your suppliers, it will be much easier to make sure that all of your bills are being paid on time, as you will be able to avoid prepaying for goods and services.
5) Develop an efficient accounting system
Mismanagement of financial resources is one of the most common reasons a business fails, especially new small organizations. Whether you will have an accountant on retainer or plan on using small business accounting software to track your finances, you will want to carefully record your business income and expenses. Making a point to keep your finances organized will save you a substantial amount of time, and likely money, in the future.
6) Research and purchase any mandatory insurance
Depending on the type of business that you’re starting, there may be industry-specific requirements like insurance, operating standard, or tax requirements. It’s important that you understand these requirements before opening your business so that you can ensure you are in compliance with each of these regulations.
7) Research and conform to all federal, local, and state regulations
There are several governing bodies (OSHA, the Department of Health, etc.) that exist to make sure that your business is operating to code. Make sure you understand which organizations will be monitoring your company, and then make sure that you are in compliance with their rules and regulations.
No matter what type of business you will be running, there will likely be a long list of documents and forms you will be using on a regular basis. Be sure to develop these beforehand, to save yourself time and effort after opening.
8) Write and implement a formal marketing plan
Before you can reach your first customer, you’ll need flyers, sales letters, and other promotional materials to help you communicate your message. Part of this equation is having a logo, business cards, and custom stationery in order to present your company in a professional and memorable manner. The most important resource for a business is a steady stream of new clients or customers. While it will likely change often, it is important that you have a plan in place that addresses client acquisition.
9) Claim all domain names and social media handles and create a website
Maintaining a strong web presence is important in the modern business environment. Be sure to claim any domain names or social media handles you will need to market your business online. Add content to your social media profiles and use these tools to communicate with potential customers. Have a plan to manage online contact with current customers when your business is up and running.
Now that the Internet is easily the most widely-used information source among all types of customers, it is integral that your company has a website. Either look to template-driven options that you can create yourself, or locate a reliable and skilled web development agency.
10) Research and join any beneficial industry organizations
Depending on your industry, there are more than likely organizations you can join that will increase your credibility, provide useful networking opportunities, and pass on useful information regarding insider industry trends. If you qualify and can afford the necessary fees and dues, it may be well worth joining these types of organizations.
Swyft can help make this process as smooth as possible
If you work with an experienced professional service from day one, you’re much less likely to make a mistake that will cost you down the line. Contact Swyft now for helpful support and information from experienced business professionals.