Top 10 Tips for Starting Your Small Business

August 9, 2016, 4:51 pm Posted by: Lori Askins Category: Financing & Investing

What makes a perfect entrepreneur? It is a question that most young people seek an answer, but the problem is there is no one perfect response. All successful businessmen of the world have varying stories. However, there is one common aspect they all share; they all started from the bottom of the ladder and worked their way up. Here are a few tips that will help you reach your goals and rise to the top as you start with your new business venture:



The Idea:

Are you confident that you have a unique business idea that not only seems viable to you but to society as well? You cannot tell society about your ingenious idea, because you do not want someone else to steal it. But you must do your due diligence to determine if your idea is feasible, practical, and profitable. You need to make sure that people will be genuinely interested in your business idea and that the return on investment (ROI) is positive. You need to assess whether your business venture will be a cyclical one, that is part of a trend. Will it give you a tremendous ROI? But then diminish just as quickly? It is imperative you research your idea well before implementing it. Some say 2-5 years is the ideal time frame, while others say if you it is an idea that is part of a trend or will quickly be done by someone else, you need to act fast. That means you need to think fast and do a thorough, but quick evaluation of your business idea.



Budget:

A person that is serious to pursue his/her idea will have a reasonable estimate as to how much capital is required. The problem arises when you wonder how you would obtain this much money. The best option is taking a line of credit (LOCs). Unlike traditional loans that are often given out by banks, a line of credit doesn’t require tons of paperwork, or for you to sit back and wait patiently hoping your business idea will get approved. A line of credit can either be based upon collateral or non-collateral. A collateral based line of credit means you are responsible for the capital you borrow, where as a non-collateral based line of credit, means you do not have to put any property; personal or business, at stake. In addition, when borrowing a line of credit (LOCs) you need to ensure you are getting the best possible rate on the money you borrow. Some companies offer 0% APR for up to 24 months on a non-collateral line of credit whereas others charge rates as high as 30%! In order to get the best rate you need to make sure your credit score is up to par. The national average credit score is 695 and your should be in line with that number. When you apply for a line of credit your character, capacity and credit score will play a crucial role whether you are approved or not. Therefore it is imperative to make sure your credit score is considered good or excellent. If it is not, BR Finance Solutions can ensure that your credit score is where it should be, so you are able to get the capital you need to start your business.



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Know the relevant market:


Research from the internet is not enough when it comes to evaluating the marketplace you plan to join. Every region has secret monopolies and other contingencies that might hinder your plan. On paper, things might seem good, but to ensure they will work in the market a thorough research of the market is required. You need to define the addressable and available markets.



The addressable market is defined as the total revenue opportunity for your product or service whereas the available market is the portion of the addressable market for which you can realistically compete. This is based upon many factors such as geography, resources, capacity, etc. Then you need to calculate the ROI, and lastly where your business idea would best be suited. For example you want to sell a specific niche product across the world, but you are set on a certain location. The location you chose has a ban on parts of this product and so the size of your sizeable market has shrunk.




Stature of the Firm:

There are three types of businesses; sole proprietorship, partnership or a corporation. Depending on your situation you need to know how your business hierarchy will work and who is responsible for the debt. This type of business determines various aspects including financial decisions and responsibilities. A sole proprietorship and partnership is personally liable for any debt incurred from the business. A corporation is not personally liable which can be extremely beneficial. If your business idea does not workout as planned and the business goes under, you will not be responsible for the debt that has accumulated and take a risk of losing all your personal equity.



Name:

Be it a clever acronym or just a fancy word, the name of your business has to be exquisite, thus capturing the essence of your business. Name registration is a vital component when you complete legal procedures of the new business. You cannot register your firm with the name of a pre-existing one so be sure your business has a unique identity.



Competitors:

You need to keep an eye on your surroundings. If you want your business to flourish and become the champion in its field, then make sure there is less competition or simply that you have the right equipment to face them all. By determining who your key competitors are and identifying their customers you can identify how you can compete in terms of cost, service and technology.



Get an Accountant:

Most businesses start as a small scale set-up. There is no shame in that because it's a wise route when reaching to the top. An accountant will help you every step of the way with record keeping expertise. This way you will know what is lacking and what is not. As a result, your decision making will be easy.



Customers:

Whether you want to sell a certain product or a service, the person on the recipient end is the customer. Know who your potential customers are and what problems they are facing. If you manage to catch the attention of the customers, your business is a guaranteed success.



Recruit the right people:

You cannot possibly run operations until you have a staff to run your business idea. Get your timing right so that you can interview the people that match your frame of mind and who care about your business as if it was their own. A team of employees can do wonders.



Avoid Confirmation Bias:

Confirmation bias is when you keep taking wrong steps to prove that your previous decisions were correct. When you start a business, you should be aware that everyone commits mistakes, and you should learn from them rather than dragging yourself towards more loss.



The aforementioned ten tips will help guide your way towards the top to create a successful business. Just remember each person starts from the bottom, but if he lays the right foundation, the building is destined to stand tall.




Are you thinking about starting a new business? Do you have any suggestions to add to this list? Let us know.



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