Just as a house needs a solid foundation, your business start-up needs to be well planned to be well executed.
Here are some important first steps for your business start-up:
Explore your idea. What makes your business start-up different from other products or services that are currently on the market? How will you make yours stand out? If it’s a new innovation, you will want to protect your idea so it’s not poached by competitors. Pro tip: Price can’t be the only way you stand out because you want to be profitable – and not perceived as the bargain basement of your niche industry.
Do some market research. You think it’s a great idea. Maybe your family and close friends think it’s a great idea. What about your potential clients? What are they looking for? How much will they spend for your product or service? Is demand what you think it will be? What will they consider to be exceptional customer service?
Figure out your business model. Basically, this is the blueprint for how you plan to make money from your product or service. In addition to identifying the values and behaviours of your target market and competitors, you’ll anticipate expenses and possible alternate streams of revenue (like Internet advertising or selling space). Understanding the strengths and weaknesses of your business start-up helps you plan how to run your business profitably.
Determine the best business structure for your company. You could be a Sole Proprietor (you pay personal income tax on the net income your business generates and can opt to operate under your name or register a business name), a Partnership (a relationship between two or more people, corporations, or trusts that join together to provide services or goods), or a Corporation (a legal entity – separate from its owners – that can enter into contracts or own property). Each has different implications legally and in terms of taxation, so be sure to seek advice from a Lawyer and Tax Accountant so that you make an informed decision.
Investigate government programs and grants. Are there any business grant programs or other initiatives that you could qualify for? There are funding opportunities available through national and provincial funding programs.
Determine your initial costs. Setting up any business takes time, effort, and money. You need to figure out how many people you’ll need to employ (Pro tip: there are benefits to outsourcing accounting services), how much will it cost to produce your products or provide your services, insurance, and marketing (including the launch of your business).
Draft a business plan and a business budget. Collecting comprehensive information to help you write your first business plan and forecast a reasonably accurate business budget will help you begin to work toward your goals. It can also help with attracting lenders or investors. A robust annual forecasting and budgeting process will help you stay on track and make improvements to your business strategy as necessary.
Keep things running smoothly. You’ve likely heard that many start-ups fail because they run out of money before they make a profit, so understanding the reality of your endeavor is crucial. While businesses often fail because of cash flow issues, there are strategies that help companies manage times they don’t have as much money coming in as they have going out. An experienced Accounting Team can offer tips to mitigate cash flow issues and other financial challenges. As the saying goes, an ounce of remedy is worth a pound of cure, so reach out for professional expertise early.
Our virtual Accounting Team has experience with business start-ups. If you’re interested to find out how we help businesses meet their goals, please contact Finatics Accounting Solutions for a complimentary consultation.
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