Things to consider when starting a business – Part 1
In yesterday’s post we gave mention to some great Female Entrepreneurs. They may all now be doing very well for themselves but it’s worth remembering that they all had to start somewhere. At some point most of these business owners will have either been sitting at work, having a coffee at home or perhaps daydreaming during a university lecture, wondering if they could possibly start their own business one day. Their success stories show that it is possible to start your own profitable business, so could you do it? Over the next few weeks we’ll be looking at a few important things to consider when starting a business. I originally intended to put it all in one post but as I was writing it seemed to quickly be turning into a book rather than a blog post so today we’ll just look at 3 points to consider.
Should I quit my job?
If you’ve ever thought about starting your own business then I’m sure you will know what I’m talking about when I mention the excited feeling you get in the pit of your stomach as you imagine where the business might take you. While your business may have lots of potential, it’s important to be realistic when considering at what point your business is likely to become profitable enough to support you and your family financially. This decision is truly a difficult one to make and mental balance is imperative. On the one hand, if you are going to make any business succeed it will likely involve some element of risk coupled with a lot of time and devotion. To show this devotion and free up the needed time, some people decide to jump in at the deep end and quit their job in order to give their new business the best chance of success. While this kind of commitment may be admirable, if the move hasn’t been planned out properly on a financial level, it could also be quite a foolish one. Some businesses are able to generate substantial profits right from the outset. Many businesses however can take years to even break even. So while quitting your day job may be the dream, perhaps a drop to part time hours or just committing as much time as possible outside of work hours to get things off the ground might be preferable. This is a decision that only you can make but it’s a decision not to be taken lightly.
Creating and Protecting your Brand
The first thing most people consider when starting a business is what the business will be called. This is one of the most exciting bits for me because I don’t just view it as naming a business. I prefer to think of it as creating a brand. This brand name will be attached to all of your company stationary, your advertising material and your business bank account so it’s important to get it right from the start as changing it at a later date could be time-consuming, frustrating and costly.
Remember that a brand isn’t just an online entity though. If you plan to have clients or customers visit your office, make sure you get something that will look classy and not simply trendy. White furniture for work or home offices tends to look very clean and modern and can elevate the impression that anyone visiting you in the office gets. Keep your business area as neat and tidy as possible and make sure that guests feel welcome, perhaps by offering them coffee or tea upon their arrival.
It’s also important to consider protecting your brand name. Do plenty of online research and take advantage of free government workshops or initiatives for business start-ups to get some free advice in this area as well as others. Depending on your business type you might need to consider registering a trademark. Or if you think you might want to trade as a limited company one day, then it might be worth securing your company name by registering a dormant company with companies house so nobody else can register it. Yes we are thinking far ahead here as most businesses can trade quite easily under sole trader status but the point is that you don’t really want to invest a lot of time and money into building a company brand, only to find out at a later date that you have to change it for legal reasons.
Separating Business & Personal Finances
If you ever want to get a true feel for how your business is performing financially and if the business model is sustainable, then it can be a very good idea to separate your business finances from your personal finances as early as possible. Not only will it give you a true view of how your business is performing, it will also make your life much simpler when it comes to sorting out your tax liabilities. The simplest way to do this is to open up a business bank account and start running all of your business income and expenditure through that account. Many people also find it helpful to draw some kind of a weekly or monthly wage from their business and then leave the balance sat in their business account. This can be very useful in dealing with the inevitable peaks and troughs of business, preventing you from overspending during the good weeks or months, only to go hungry during the bad.
Have you thought of quitting your job to start a business or have you already done it? How did it turn out for you?