5 Tips To Learn Before You Start Your Own Business
After months and months of deliberation the time has finally come: you have had your eureka moment and consolidated your idea, and the budding entrepreneur in your has decided you are ready to take the plunge and start your own business. The time before you decide to start your own company is perhaps the most exciting in your life. While the world flashes statistics in front of you, about how half of all small businesses fail within the first five years, you have faith in your idea, work ethic and business sense to know that your company will do well. However, before you render in your resignation letter from your “ball and chain” 9-5 job and plunge into the world of self-sufficiency, you need to take a step back, and double check on a few key pointers. Following these simple guidelines will make sure you are part of the half that succeeds.
Seek Guidance
A crucial step which several small businesses and start-up owners often forget to take is seeking guidance. But we’re not talking about seeking business pundits or market analysts who will dole out statistics about how your business is likely to do given the market climate, instead, we are talking about people who are or have been in the position as you. Reach out to budding entrepreneurs or small business owners who took the plunge much like yourself and ask them for tips and tricks that you should note before diving into business for yourself. They are likely to provide you with insight and opinion that no expert or rule book will be able to give as they have first hand experience of what it is like to enter the market you are trying to penetrate.
The Thumb Rule
Another critical step you need to double and maybe even triple check before tending in your resignation is consolidating your sources of funding for your new enterprise. If you plan to self-finance your business and are using up your savings for the same, make sure you have a rainy day plan in place, as well as have secured your finances. It is very likely that you have dependents or other responsibilities, and not having a monthly income, along with the exponential costs of supporting a new business can take a toll on anyone’s bank account, and you need to ensure you are prepared for the same. As a rule of thumb, ensure you have around 9-12 months of expenses stored in your rainy day fund, this includes monthly personal expenses along with bigger expenses such as EMI payments, school fees for kids, amongst others
Plan it well
Even if you are planning to put up some of your own savings, several start-ups and small new businesses do need help from other investors to be able to successfully sustain themselves. If you are planning to borrow money from family members or any financial institution in the form of a loan, or have them as a profit participant, ensure the costs of the same have been accounted for in your business plan. If you have put up any personal assets as collateral for any loans obtained, ensure you have factored in the risks of the same. The more planning and thought you put into your businesses and financial plan, the more safe and secure your financial future as well as your company’s and your family’s is likely to be.
Even if you are planning to put up some of your own savings, several start-ups and small new businesses do need help from other investors to be able to successfully sustain themselves. If you are planning to borrow money from family members or any financial institution in the form of a loan, or have them as a profit participant, ensure the costs of the same have been accounted for in your business plan. If you have put up any personal assets as collateral for any loans obtained, ensure you have factored in the risks of the same. The more planning and thought you put into your businesses and financial plan, the more safe and secure your financial future as well as your company’s and your family’s is likely to be.
Right Investments that would help
It is important to understand that as a new business owner you will be making several investment decisions that could determine the fate of your company as well as your financial future. Real estate has always been the traditional go-to investment for smaller business owners due to the amount of security and backing that it provides. However, given the technological innovation in every industry, investing in things such as content management software, a cloud, document sharing tools, internal communication networks, sales CRM, can all be worthwhile to ensuring productivity and efficiency for your enterprise, thereby, proving to be wise investments.
The Spirit of Entrepreneurship
Finally, make sure that you have the emotional backing to go through this new venture. While starting a new businesses is a great initiative it is extremely tiring and stressful, and having a spouse, family or peer group who will support you through the same is extremely critical. Taking all this into account will make sure you feel secure in your decision to quit your job and completely dive into your venture, making you more confident and optimistic of its success.
Source: Dainik Bhaskar
- Amit K Arora
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