Millions of businesses are started each year, but many fail. Read these things to consider when starting a business and get tips that will help you start and successfully run your business.
Business Assistance and Training
Conducting proper research and creating a solid business plan is essential to avoid failure. You can find many free (or nearly free) sources of training, mentoring and counseling for small business owners. The U.S. Small Business Administration offers free online courses, local workshops, and technical classes. You can also get entrepreneurial training from active entrepreneurs either online or in person. (Make sure to research the authenticity of online classes that charge fees.) Also consult your local colleges for free entrepreneurship classes.
Financing A Business
Business loans are much more difficult to obtain than loans for a home mortgage, car, or credit card. You’ll need to provide detailed financial statements. Lenders consider many factors including personal and business credit history, amount of the loan requested, repayment ability, and collateral (what you’ve pledged to forfeit if you default). It’s important to present a strong detailed business plan (including how the money will be spent), cash flow projections for at least a year into the future. Explore smaller banks, ones you are already experienced with, community banks, credit unions, and especially the Small Business Administration.
Choosing a Business Location
Research the market with help from a realtor. Realtors have expertise and insider knowledge of the city, including information about where your potential customers tend to shop. Knowing the market and whether it’s a renter market will help you negotiate, ask for concessions on your lease, and lower the rent payments from face value. By signing a lease, you’re effectively “marrying” your landlord. Investigate your landlord’s credit and if they’re in financial trouble. Conduct interviews with your landlord. You may want help from an attorney to ask the right questions when reviewing the terms of your lease. Moving may be expensive. You also want to consider if your space will be suitable for what you want to do and possible expansion.
Legal Structure of Your Business
Research incorporation and which legal structure is best suited to your business (LLC, C or S corporation) to prevent personal liability, even if your business is small. Without it, complications could arise down the line when you seek outside investors, founders leave, or former employees/customers sue. You can also register in a different state for various benefits – Delaware being a popular choice.
Employer Responsibilities
Basic research can done by looking at OSHA’s website (Occupational Safety & Health Administration). Aside from that, you will need to develop hiring practices and employee expectations. Consult with a human resources professional to create an employee manual. Make sure proper channels are available to report violations such a discrimination and harassment.
Protect Yourself from Liability
Aside from establishing the legal structure of your business, you’ll need to take additional steps to safeguard you and your business from liability that could hurt your business financially. A Business Owner’s Policy is a good place to start, but you will also need to cover for professional liability, auto insurance, and worker’s compensation. You may also want to consider crime insurance that protects against employee dishonesty – an issue that smaller businesses are much more likely to suffer from. Even though your business may be small, money spent on protection won’t be wasted. Learn more about which types of insurance your business needs. To inquire about our various types of business insurance, or for any other questions, please contact TJ Woods Insurance Agency today.
