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Don’t move forward with opening a business until you consider these issues.
Key points
- Before opening a new business, you need to make sure you’re in a financial position to move forward.
- You need to have a business plan that can guide you to success.
- Make sure you understand all of the responsibilities that come with running a business.
If you’ve ever had a great idea for a product or for a service you could offer, you may have considered starting your own small business. After all, the idea of working for yourself and controlling your own fate seems pretty tempting — especially if you have a business concept you think can be successful.
The reality, though, is that a lot more goes into running a successful company than just having a great product. In order to make sure you’re really ready to start a business that stands a good chance of thriving, there are four key questions to ask yourself before moving forward.
1. How will you support yourself and your company?
The reality is, the vast majority of businesses won’t be profitable when they first start out. In fact, it could take months or even years before you start making real money from the company.
You need to make sure you have some plan for how to support yourself in the meantime. And you should also think about how you’ll finance the company’s growth and devote the time necessary to get it off the ground.
If you’re planning to work full-time, for example, and start your business on the side, think about what this will really mean for your company and your finances. Unless you’re confident you have the cash to live on and the time and money to give your business a chance to grow, you may want to wait a bit before moving forward.
2. Do you have a business plan?
You need to create a business plan if you want to maximize the chances of your company’s success. The plan should outline your mission, your goals, and a concrete path to achieve them. Without this big-picture document, you reduce the chances of your company being a success because you’ll be making ad-hoc decisions without a cohesive plan.
3. What is your motivation for starting the company?
You should also think about why you want to start a business. In most cases, being the CEO isn’t necessarily easy and it isn’t always a quick path to riches. If you just want to make a quick buck, you’re probably not going to be successful with your business. But if you really believe in what you’re doing and want to start a company for the right reasons, you’re more likely to be able to stick with your plan even through hard times.
4. Are you willing to handle all the administrative and legal tasks?
Finally, you have to consider all that goes into running a company beyond just offering products or services to customers. For example, you’ll need to decide how your business will be structured, and you’ll need to know what laws must be followed, such as zoning and licensing laws. You’ll also need to be prepared to deal with tax issues.
As your company develops more, you can hire people to handle these tasks — but in the beginning, you’ll need some preliminary knowledge about them if you can’t afford to pay experts.
By yourself asking these questions, you can make sure you don’t move forward with becoming a business owner before you’re actually ready to create a company that’s likely to succeed.
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