The BizFilings blog covering business tips and trends.
Four Considerations to Make Before Launching Your Business
Published on Jul 28, 2013
Whether new or a veteran entrepreneur, to set you up for success we have identified four tips for successfully launching your business.
When launching your business, there is a unique combination of excitement and fear. The decisions you make during the initial stages could make or break your business. This can seem overwhelming, even for those who consider themselves veteran entrepreneurs. To set you up for success, we have identified our top four tips for successfully executing any new venture.
1. Put that handshake down on paper
Verbal agreements have no place in business relationships. The hesitation to create proper documentation of the relationship is normal, especially when starting a new business with friends or family. However, a written agreement formalizes your partnership, and protects all parties should the “end game” veer off course from what was originally negotiated. There isn’t a universal template for a written agreement, and its contents will vary by industry and the nature of the partnership. As a starting point: percentage of ownership, a buy/sell agreement and allocation of profits and losses are important details to include. Consulting with a professional advisor or attorney is smart, as they can ensure you have included all necessary elements needed to manage, protect, and grow your business incorporation.
2. Confirm your rainy day fund
Debt is inevitable when launching your business. Paying yourself, at least at first, should be your lowest priority. Instead, pay yourself enough to get by and minimize overhead. Having a safety net for living expenses during the initial phase of your business is crucial as it’s likely that your business won't be profitable right out of the gate. And if it is, you'll want the flexibility to invest most of that revenue back into the business, promoting further growth.
3. Have a growth plan
How big does your business have the potential to become? If you’re starting an online business, will your servers be able to handle the traffic? Checking out the growth plans of other successful business incorporations in your industry is a good starting point. Use their ideas as a guide for your own development plan. Determining your expansion opportunities, developing a marketing strategy, and outlining a financial plan are also smart initial steps. The growth plan will keep the business on track and in line with projected long term goals.
4. Research the competition
Researching the competition is a key step in the initial stages of any new business incorporation. But it doesn’t stop there. Continuing to monitor competitors enables any business owner to get to know their behavior, and in turn, anticipate what they will do next. As a result, business owners can then develop their own strategies and creative angles, leveraging themselves above the competition while remaining attractive to current and potential customers. Attending industry events, keeping tabs on social media and relevant editorial coverage and opening the dialogue up to current customers are all smart ways to carry out research.
With any new business incorporation, there is uncertainty, but planning for success will keep your business booming against the odds. Much like any successful feature film, the pre-production phase for your business is one of its most important stages.