Starting a business for the first time? Success often depends on the right preparation. You’ll want to follow several essential steps to ensure that the body you’re creating is legally sound and that it will be able to turn a profit and ultimately achieve its objectives. So, what steps might you take to do this?
Choosing the Right Legal Structure
The way that your business is structured will determine what taxes you’ll need to pay, and what regulations you’ll need to abide with. For the sake of simplicity, you might operate as a sole trader, or alongside a partner. But limiting your liability might confer several key advantages – perhaps the most obvious of which is that you’ll be protected against personal bankruptcy, should things not go according to plan.
The laws you need to obey will depend on the niche into which you’re entering. You might need special permission to sell drinks or play music, for example.
Conducting Comprehensive Market Research
To sell your products and services successfully, you’ll need to understand the customers to whom you’re selling them. This means conducting market research. This kind of research comes in two varieties: primary and secondary. In the former case, you’ll collect the data yourself, using questionnaires and other methods. The latter case involves using someone else’s data, which you’ll consume via industry reports and public databases.
In most cases, a combination of both kinds of data will inform your business plan.
Establishing Effective Human Resources Practices
If you are going to be employing people, then you need to take Human Resources seriously. This will allow you to keep everyone happy, minimise your staff turnover, and stay on the right side of employment law. For enterprises of a certain size, investing in professional HR services for SMEs might help you to get the best from your staff, while minimising your costs in the long run.
Developing a Robust Financial Plan
If you don’t have control of your money, then you probably don’t have control of your business. Getting a grip on your finances often means setting out a financial plan, which should set out how much you need to raise, and how much you expect your business to bring in. This document will help you to manage your cash flow later on, and it can also help you to secure the support of investors. Should you need additional finance later on, this will allow you to demonstrate your track record of prudent spending.
Your financial plan, ideally, should be regularly reviewed and updated over the lifespan of your business. It should be a component of, rather than a substitute for, your broader business plan.
