Becoming an entrepreneur is a rewarding way to put your skills to work and share your ideas with the world, but it’s also a hard path to go down as there are many pitfalls along the way. Many entrepreneurs are full of ambition at first but don’t know how to start making their dreams into a reality. When you’re just starting out, these are a few things that can make you more successful in the long run.
Learn About the Obstacles
It might feel counterintuitive to think about failure before even starting your business, but the reality is that most small businesses ultimately don’t succeed. According to Fundera, 50 percent of small businesses close within five years, and 70 percent don’t make it past 10 years. The outlook is even worse for certain types of businesses, such as those in the food service sector.
That news can be pretty disheartening but learning what makes small businesses fail is actually one of the best ways to set yourself up for success. According to Investopedia, some of the top reasons for failure are not knowing the market well enough and not having a solid business plan.
Once you’ve identified what obstacles you might face, you can avoid them better. For example, crafting a strong business plan will help hone your vision and will help you have something to refer back to as you grow in the future. Having a business plan will also make you think critically about your market and the demand for your product or service.
There are numerous ways to fund a business. If you’ve got some money stashed away in your savings account, that’s one option for financing your idea, but it’s also possible to use personal funds by taking out a home equity line of credit or dipping into your retirement savings. However, these are riskier moves, since the consequences of a failed business would affect far more than just your personal savings account.
Money can also come from outside sources. For example, you can apply for a loan, get a credit card, or attract investors. You could even try asking friends and family for a loan or investment.
Name and Register Your Business
Your idea can’t really take off until you register your business. This step protects you while also distinguishing your business from others. It’s also necessary for tax purposes.
In addition to registering with the government, you may want to register a domain name online and set up social media accounts in your business name. Even if you don’t have time to make a website or start posting on social media yet, taking this step now will prevent your preferred domain name and usernames from potentially being taken by someone else.
Take Care of Accounting and Bookkeeping
When your business gets going, you’ll need to track and organize your finances in order to be successful. To stay on top of income and spending, make sure you keep your business and personal finances separate by getting a business bank account.
It’s also important to develop a system for tracking your expenses. Arguably, the best way to do this is by working with a bookkeeper. If you don’t know where to start, it’s easy to find a bookkeeper for hire online through online freelance boards like Upwork. Even if you’re good with money yourself, it’s a lot to handle alone, so you should still consider the services of a bookkeeper.
Whether you work with a bookkeeper or not, you’ll need to know your income and spending for tax purposes. As a small business owner, it is also highly beneficial to have a professional accountant take care of your taxes for you, even if you’re comfortable doing taxes on your own. Accountants know exactly what to look for and often find ways for you to save money by claiming deductions you might not have known about.
There are numerous steps to take to become an entrepreneur or small business owner, and not all of them are as fun as coming up with an awesome idea or the perfect business name, but they are all important. By taking your time and doing thorough research, you can start yourself off on the right foot and position yourself for a much higher chance of success.