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Whether you want to open a home-based business or establish an international corporation there are some vital things you need to know before you begin. We know it can be overwhelming when starting out but the good news is you can start here with our top five things you need to know and think about before opening a business!
Where you will seek funding
The first thing you are going to need to know when setting up a business is how you will fund it. There are numerous options to consider too including bootstrapping. This is where you pay for the setup costs out of your own savings or from a side hustle, so it’s best suited to businesses that aim to start small and grow over time. One of the biggest benefits of bootstrapping is that you don’t end up in debt to anyone else, once your business becomes profitable. That means you won’t need to worry about investors or their influence on how you run your business.
Other funding options include borrowing money from the bank or peer loan schemes. The advantages of this are that these tend to be the most reliable and trustworthy ways of borrowing money, so you can count on the funding that you need appearing when you need it.
Lastly, you may also want to consider finding private investors for your business. A strength of this option is that you may be able to find very large sums of money for funding this way. However, you may also have to give up a high percentage of shares in your business to close the deal.
What your financial projections will be
If you have ever watched a show like Dragon’s Den you will know that at some point investors always get down to the nitty-gritty and ask startup owners what their financial projections are. Indeed, having an accurate idea of what you can expect from your business financially will help you make all sorts of decisions including where to focus your time and investment, so be sure to do these calculations before anything else.
How to minimize risk
Another thing you will need to know how to do before starting up a business is how to minimize any risk involved. After all, a business is a venture that operates within one system (the world, the financial market), and this means there are lots of unpredictable factors that could impact its success.
One way of reducing the risks involved in starting up a business is to make sure you take out the correct insurance. This means picking policies that cover every aspect of your business including third-party liability insurance, as well as accident and property insurance.
If your business will include a fleet of vehicles then educating yourself on the issues of fleet risk management vs. compliance and how they can keep your company running even if something unexpected happens is also a good idea. After all, when you include vehicles and drivers in your business equation, there is often even more unpredictability to account for.
What your business values will be
Before setting up your business it also makes sense to define what your organization’s values will be. Your business’s values are what is most important to your company, as well as the way in which you will act.
For example, many businesses have issues such as sustainability and social justice at the top of their list. These values then dictate how they conduct themselves in business out in the world, doing things that further and do not contradict them. A good example of this would be a business that is presented with the opportunity to switch to a cheaper manufacturer but refuses because the new manufacturer does not adhere to the preventing modern slavery guidelines.
Where you will find, and keep the best employees
Last of all, if you want to set up a business you will need to at least consider whether you will want to bring in employees at a later stage. After all, if you plan on being successful over the long term you are going to need to employ some additional help.
However, recruitment can be an area in which many businesses fall down. This is because it can be both costly and complex to find the right people for the roles you have and to keep them over the longer term. With this in mind, it’s good to have an idea of the type of people you would like to employ. You should consider their experience, and education, as well as their personality and how well they match the values and goals of your business.
You may even hand this process over to a professional in the form of your very own HR department. Alternatively, you may like to work with a trusted recruiter or work with freelancers more flexibly.