Starting a new business is no easy task, and it can take a great deal of courage and determination to turn your small idea into a large-scale corporation. According to studies, approximately one-third of businesses fail in the first two years because they haven’t considered the fundamental basics and the strategies they need to turn their venture into a success. With many individuals being made redundant as a result of the COVID-19 pandemic, more and more small businesses are being set up as a new and effective way of making an income. If you’re looking to set up a business in the near future, here are some useful tips you may like to keep in mind:
Have a business plan
Before you can start getting your business into action, you’ll need to write up a business plan. This will help give your venture a focus both for the present time and in the future, so you know exactly what you’re looking to achieve. Business plans are often critical if you’re seeking funding or loans either from a bank or investors, as it proves you have thought strategically about how you predict your business will succeed and grow. Some of the crucial elements to include in your business plan are:
- Target market
- Outlook (a five-year plan)
While it doesn’t necessarily have to be a long-winded document, establishing these points will give your business more credibility when seeking financial assistance.
Have an emergency fund
While you may be starting your business from home to cut costs, you must be frugal with finances to prevent getting into personal and professional debt. It’s unlikely you’ll make much profit in the first six months of starting your business; therefore, it would be wise to save cash to cover these months for living expenses and keeping your business ticking over. During this difficult period, you could decide to take on either part-time or freelance work to earn some form of income, or as a last resort – turn to friends and family for financial help.
Stock up on inventory
It’s impossible to know how your business is going to take off in the first few months of trading; however, you should always prepare for the unexpected and create an inventory. If a customer is impressed with your product, they may enquire about a bulk order. However, failure to have the relevant stock could lose you a significant profit in these instances. If you have no space at home or in your office for your stock, hiring a storage unit may be the best option to use as a warehouse for stock management. Click here to find out more about hiring a storage unit, to hire on either a temporary or permanent basis.
Know the legal requirements
Something you may never have considered is the legal requirements of setting up a business. If you fail to follow government guidelines, you could be facing a lawsuit or hefty financial consequences.