7 things to know before starting a business
Starting a company from scratch is not an easy task. Having a good idea and wanting to put it into practice requires a lot of determination and knowledge. We have listed 7 things that will help any first-time entrepreneur to understand how to open their own business without fear of making mistakes during the process. Learning from our own mistakes is a good thing, having the opportunity to learn from someone else’s mistakes is much better.
1. Set the starting capital
Starting a company and asking banks for financial resources to increase initial capital can be risky and an extinction sentence for the company. In the first few months, profitability may not be high enough to cover these debts, generating debts, and this will make it very difficult to stay in the budget.
When calculating the initial capital, take into account all the essential resources to start a business activities, starting with the purchase of goods and machines, until the expenses with the branch. Maintaining working capital for the first few months’ expenses is also a good way to avoid future headaches.
2. Separate personal finances from company finances
Using the company’s cash to pay for personal expenses is common for some entrepreneurs who have just started their own business. Mixing personal and business finances, however, is a serious mistake that can even lead the company to bankruptcy, as it causes you to lose control of your cash.
One tip is to stipulate a salary for the owner, which must be taken together with the employees’ payment. Avoiding withdrawing money outside the pre-set payment dates and keeping the company’s financial control well structured are also important tasks when starting a business.
3. It is essential to have an action plan
It is important to think about how the company will be in 5, 10, 20 years from now. The growth objective for the company’s future can be related to different areas: number of customers, revenue, market share, profits, etc. But to turn goals into reality, the entrepreneur needs to have a business plan and define the company’s goals. Setting goals and objectives will help the entrepreneur to reflect and identify the resources, time and money that will be needed to succeed. Read our article: How to create a business plan for a small business.
4. The customer is key to growing your business
Nothing is better than knowing exactly who you want to serve with your product/service. Identifying the right segment to start a business is one of the first steps for those who want to undertake. Taking care of regulatory barriers and knowing if your product fits to the market are some variables that must be considered.
Finding out who your customer is is essential for anyone who wants to succeed as an entrepreneur. What he likes, how he thinks and whether he would recommend his business are some questions that the entrepreneur needs to find out. Knowing well who consumes your product or service is a way to stimulate the company’s growth.
5. Learning to speak in public
Public speaking and ability to communicate verbally and effectively is an universal and critical skill for any situation. This is a common skill among most great entrepreneurs that is underdeveloped by a large number of adults. Having a careful and consistent speech to customers and knowing how to motivate employees with words is an asset for the company to move forward.
6. Marketing and Communication: Show the business to the world
You can have the best product on the market, but if you don’t tell the world that it exists, people won’t know. A website and social networks are good ways to do so. Digital marketing is one of the best ways to attract customers, especially if you have a startup and want to start a business. The investment amount is lower and many of the tasks can be performed by yourself, such as posts on the social networks Instagram and Facebook.
7. Speak in the same language as managers and directors
One of the biggest difficulties that professionals who have eminently technical knowledge has is ensuring good communication with executives. Speaking the same language as management professionals will facilitate internal communication. Invest time and effort to try to understand your company’s values and what your strategic objectives are.
When starting a business, you might encounter new challenges and sometimes, face some situations you never thought about. The most important thing is to take measured and meticulous steps and to be surrounded by the right persons that will guide you in the journey. Be sure your product/service has a place on the market and set up a strategy to leverage it and you will be able to grasp new opportunities.