5 Tips For Going Into Business

Starting a new business isn’t easy even in the best of times. In a turbulent economy, it can be downright intimidating. That’s actually a good thing: it means that savvy entrepreneurs will think before leaping and have a strong plan in place before entering the market. Here are five tips for entrepreneurs who are ready to take the plunge. 

1. Know Your Mission

The first step in starting any company is having a well-written business plan. This is more than just a basic mission statement, but it has to include that. Traditional business plans include an executive summary and company description, as well as an overview of how the company is organized and what it aims to accomplish. Market analysis is also an important but necessary component. You need to have a grasp of not just the market and economic forecasts in general, but your target audience and potential competition as well. Companies that serve a specific subculture need to have a firm grasp of what that niche expects in terms of products and services. Businesses designed to serve other businesses will need to know the latest trends in b2b marketing. In other words, before you can know your market, you have to know yourself. 

2. Choose a Legal Structure Wisely

Possibly the most important considerations for new business owners are the legal responsibilities inherent to ownership. This affects your tax liabilities (and breaks) as well as the types of paperwork that must be filed. It also has a bearing on legal liabilities. For example, if you just default to being a sole proprietorship and don’t adopt a more formal structure, there’s no separation between your assets and responsibilities and your company’s. This can leave entrepreneurs open to devastating lawsuits if something goes wrong. Research the various structural types available and choose what best suits your goals. 

3. Don’t Skimp on Insurance

The protections offered by legal structures like a limited liability company (LLC) or S Corp are rarely comprehensive enough. In fact, certain types of additional insurance coverage are often a legal requirement. It’s almost always an excellent idea. General liability insurance is a good match for all businesses, and product liability insurance can cover manufacturers in case a product unintentionally causes harm.

Understand that if you have employees, this ratchets up the need for coverage even further, since the federal government requires employers to get disability, worker’s comp and unemployment insurance. It may seem onerous, but the protections offered can mean the difference between recovery and bankruptcy. 

4. Explore Multiple Streams of Income

Another advantage of choosing certain legal structures is that it can make getting a bank loan or investing easier. Most businesses require some startup capital, and bank loans are often the best way to go about it, but the choices you make in the planning stage can affect just how much credit a bank is willing to extend.

Additionally, the ability for a business to invest in stocks is in large part a product of those early structural choices. Investment can be a lucrative source of passive income for businesses and their owners since any source of income that doesn’t require active work to acquire is a safety net if profits aren’t stellar. Remember, just because you can do something doesn’t mean you should. If exploring too many alternatives comes at the price of focus, keep the focus. 

5. Create Customer Convenience

All businesses exist to make money, but the ultimate purpose of a business is to fulfill a need. Make the buying process as easy as possible for your prospects. Engage with them across multiple platforms, especially through social media. Build your brand logos using memorable iconography and color psychology. An Emarketer survey showed that 52% of customers see companies more favorably when customer service is personalized, so consider live chat or human phone operators as customer service options. Make your business unforgettable for all the right reasons. 

It’s often said that knowledge is power. If you’re preparing to go into business, it pays to have a solid understanding of the strategies you need to get the right start on the path to success.