Putting up a business can be a bit overwhelming. But here you are, thinking you have what it takes to become an entrepreneur despite the current uncertainties brought about by the pandemic. If you’re thinking of setting up a digital business, one that doesn’t rely on a brick and mortar structure, then that’s probably the best idea right now.
However, that doesn’t mean the process will be easier for you because you still need to think about these 6 essential considerations to start your new business.
1. Business Plan
Each and every enterprise, no matter how big or small, must have something called a business plan. Developing a business plan means laying out your goals and documenting the steps you need to take to achieve them, regardless of whether or not the pandemic has passed.
The business plan will be your reference for everything you need to know about your company. It can also document what steps you took right from the start for you to look back on whenever necessary.
2. Starting Capital
How much capital you need for your business depends on what industry you want to be in, how large your operation would be, and the price of goods, supplies, tools, and wages you’ll be paying for. If you think you have sufficient capital all on your own, then you probably don’t. Your capital should cover all your expenses as you wait for your ROI. Keep in mind that in the next year or so, you will most likely be shelling out more than your earning, and that’s a fact.
3. Proper Accounting System
Once you have enough capital to keep you afloat for at least the first year of your business operations, you’ll then need a good accounting system to manage your resources properly. You can’t afford to overspend on tools and supplies, and you definitely need to catch people who might be ripping you off. An accounting system keeps track of where your money goes, which is essential for any type of business there is.
There are a lot of things that could go wrong while you’re still learning the ropes of running a business, no matter how hard you try to practice due diligence on your part. There’s no guaranteed way to avoid accidents and damage done by other people under your watch, but ample protection from an insurance provider can at least prevent you from having to pay out of pocket for such unpredictable and devastating situations.
You’ll also find that more clients would be willing to pay for your services once they find out that your business is covered by an insurance policy.
5. Cybersecurity Software
Aside from accidents, cybersecurity threats constitute another concern that could cause small businesses to crash and burn if business owners are not careful.
Keep in mind that without the proper software to protect your company, employees, and client data, unscrupulous individuals and groups could easily target your business. Even if they fail to inflict actual damage to your business operations, you would be required by law to inform your clients that their data may have been compromised.
Word travels fast, and you can just imagine how difficult it would be to regain your clients’ trust if they so much as suspect that their information is not safe with you. As if that’s not bad enough, think of what could happen to your business if cybercriminals actually get their hands on your master database. Investing in proper security tech solutions can help you avoid most, if not all of these troubles.
6. Bank Account
If you ever plan to expand or scale up the operations of your business, it is inevitable that you would have to open a new bank account tied to the official name of your business. It only makes sense to do this from the get-go, so you can easily account for the cash flow of your business without it ever mixing with your personal funds.
Having an official bank account also ‘legitimizes’ your business’ image, as most clients might feel more comfortable coursing payments and transactions through official bank accounts instead of accounts named under private individuals.
It would also be prudent to build a good relationship with your bank of choice as early as you can in case you need their help in financing any future expansions or acquisitions you might be planning for your company. Developing a good relationship between the bank and your business can simplify future transactions for you.
Many successful businesses have launched from dingy garages and cramped dorm rooms, precisely because there are a lot of more important things to invest in rather than spending most of your capital on a fancy office. As always, focus on what’s important and prioritize customer safety and experience — everything else can be upgraded later on.
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