Things to Consider When Starting a Business

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Starting a business is an exciting time and you should enjoy every step of the process.

It’s true that businesses are started every day all over the world, but you don’t start a business every day.

Take your time to enjoy the process and the milestone that starting a new business brings to your life.

While it is stressful, by fully thinking about the things to consider when starting a business, you’ll realistically prepare yourself for making the big, necessary decisions.

Here at Mollaei Law, I hope to educate and inform you so you can share your skills and talents with the world by starting your business.

When you’re considering to start a business, contact me at sam@mollaeilaw.com for your consultation today.

Here are things you should consider when starting a business...

 

Challenges Faced by Small Business

The challenges faced by small business owners include client dependence, founder dependence, fatigue, money management, and balance.

These terms may not make sense to you right now, so let’s put them into context because they are all things to consider when starting a new business.

 

Client Dependence

Client dependence is when you rely too much on a single client for your income. How much is too much?

No single client should make up more than fifty percent of your income or you could find yourself with a problem.

Just as you want to diversify a stock portfolio, you should diversify your client base as well. This will ensure that even if you lose a client, you will still bring in money to at least survive.

 

Founder Dependence

Founder dependence is when your business literally can’t run without you.

As important as your business is to you, it should be able to operate without you.

This means that if you have a health problem or other emergency, your business is still able to produce income without you coming into work.

This is essential to creating a business that can grow and sustain you for years to come.

While it’s true that you may not be able to immediately have a business that doesn’t depend solely on you, you should work your way towards that goal as soon as possible.

 

Fatigue

Fatigue as a business owner takes a toll on you quickly.

You’re likely used to a normal job in which you had set hours, vacation leave, and even sick days.

But once you go into business for yourself, it’s easy to end up working long hours, skipping vacations, and pushing through even when you’re sick.

Pretty soon, all of this hustle leads to burn out.

Fatigue can cause you to make mistakes or make decisions too quickly without taking details into consideration. Eventually, you may even want to give up your business.

Early on in your business, you will have to find a way to avoid total fatigue and take the time you need to recharge or you (and your business) won’t survive.

 

Money Management

Money management is one of the main reasons a business fails.

It usually comes down to not having enough cash to pay the bills of the business, much less your own.

How does this happen?

To put it simply, starting a business requires a lot of capital and you may find that you drain your savings account faster than you expected.

This is why you see people balancing a new business while still working a job. It’s something you may need to consider as well.

Balancing both a job and a business is a lot of work and makes it difficult to grow your business, but if you run out of cash-flow, your business will die.

 

Balance

One of the biggest struggles a business faces is balance. In the beginning, it may be balancing a job with a new business as we just mentioned.

You may also struggle with balancing working on your business and fitting in time to have a personal life. This can put a strain on relationships and add even more stress to your world.

Additionally, balancing the growth of your business with the quality of what you provide may become a challenge.

You may find that you have to delegate more tasks and sacrifice personally dealing with every client or looking at every creation.

This means that the quality may take a slight and barely noticeable hit, but your business will be able to grow.

As the business owner, you’ll have to make the decisions when it comes to what sacrifices the business can afford to make in order to grow.

Once you’ve considered all of the challenges you may face as a small business, schedule your FREE consultation by emailing sam@mollaeilaw.com to get started with your new business.

 

Factors to Consider Before Starting a Business

The top 10 factors to consider before starting a business include:

  1. Your knowledge
  2. Your passion
  3. Your capital
  4. Your financial plan
  5. Your time management
  6. The economy
  7. The target market
  8. The competitors
  9. The potential profit
  10. The location

 

Knowledge

Your knowledge is a necessary factor to consider before starting a business. Starting a business in an industry you know nothing about is a bad idea.

While you can educate yourself, and learn along the way, if you don’t start with at least a foundation of experience and knowledge, you’re making starting a new business even more difficult.

 

Passion

Your passion is the drive that keeps you going when things get tough. Passion also feeds inspiration and creativity, which are necessary in the business world.

If you aren’t passionate about your business – don’t start it. Find something else you are passionate about instead.

 

Capital

Your capital is the money you have available to put into your business.

You should research the amount of money you may need to start your business and work to save that amount before jumping in.

If you are counting on the business to be your sole income, you may also want to have a savings account with at least three months of living expenses. This money will take care of you as you start the business.

 

Financial Plan

Your financial plan will help you meet your expenses as you start your business.

You should plan how much money you’ll put into the business and where it will come from.

Additionally, you should know how you’re going to pay your bills and take care of yourself as your business grows.

Keep in mind that businesses do fail. Instead of assuming it won’t happen to you, be prepared with your financial plan.

 

Time Management

Your time management may make all the difference in the success of your business in the first year.

You should have a realistic idea of how much time you can spend on your business each day and how much time your business needs.

If you realize that your business needs eight hours a day but you can only give four right now, consider waiting to start your business or freeing up more time in your schedule first.

 

The Economy

The economy may severely affect the success of your business.

Be sure to do your research about the current state of the economy, the industry your business is in, and even consumers’ buying habits to determine if it really is the right time to start a business.

 

Target Market

The target market is the people who will become your customers.

You need to consider whether or not your product or service is something that people are willing to spend money on.

How much money would they spend?

Will your customers be repeat customers or will you have to consistently bring in new business?

 

Competition

The competitors are something you need to be very aware of in the beginning stages of starting a business.

First, determine who your competitors are. If you have many, choose the top three to five.

How can you be different (better) than them? And more importantly, how can you convey that to your potential customers?

In some cases, you may even be able to use your competitors to your advantage.

For example, customers who have a short lunch hour may be more willing to try your restaurant over the competitor across the street because you have a shorter wait time.

 

Profit

The potential profit of your business is something you can’t ignore.

You should take the time to consider what business expenses you may have and the cost of your products or services.

Then do your best to estimate the profit you’ll make on every sale before you even begin starting your business.

Unfortunately, you may find out that your expenses leave very little profit. In that situation, you either need to cut your expenses or come up with a more profitable idea.

 

Location

The location of your business, if you need a physical location, is important.

As a brick-and-mortar business, there are a several factors you should consider, including:

  • The traffic in the area
  • Your competitors
  • Zoning regulations
  • Security of the area
  • Parking and accessibility

As you can see, there are many things to consider when starting a business. This isn’t a decision you want to make too quickly, but you shouldn’t be too afraid to begin either.

 

Before Starting a Business Checklist

Your before starting a business checklist should include:

  • Do market research
  • Get organized
  • Ask yourself: why am I starting this business?
  • Improve your personal credit score
  • Determine the business structure
  • Know the legal requirements
  • Know the tax requirements
  • Find a mentor
  • Survey your target market
  • Name your business
  • Hire an accountant
  • Prepare for cyclical downswings in revenue and activity
  • Network with entrepreneurs for advice and support

Compiling a checklist will help you plan the actionable steps you need to take leading up to starting your business.

Remember that even with the best plan, things can go wrong, so you need to try your best to prepare yourself for all possibilities.

When it comes to the legal requirements of starting a business, we’ve got you covered. Email me at sam@mollaeilaw.com for your FREE consultation and we can look at the legal requirements together.

 

List of Things Needed to Start a Business

The things you need to start a business include time, research, patience, money, and a business plan.

 

Time

Starting a business requires a lot of time. You should be aware of the required time commitment before you get started.

An important skill you’ll need to start and run your business is time management and the ability to prioritize tasks.

 

Research

You’ve seen in this article that there are a lot of things to consider when starting a new business. Research them.

Have all of the knowledge you can gather to make an informed decision and plan accordingly.

 

Patience

Starting and running a business requires patience with the process and patience with yourself.

Understand that you may not turn a profit immediately. Give yourself room to make mistakes and be patient as you learn.

Realize that the customer isn’t always right and you may need patience to deal with difficult customers and help you learn from each encounter.

Even if you start a business in the most exciting area to you, there are certain business-related tasks that can get monotonous.

Have patience to complete the required tasks even when they’re boring.

 

Money

You need capital to help you start a business, whether it’s in the form of cash, credit, or a loan.

You should have a good idea of how much money you’ll need to start your business. Be aware of the necessary expenses.

Some of the basic expenses include a filing and legal fees, a website, business cards, advertising, accounting, a payment processing system, and an accounting software/professional.

 

Business Plan

You need to have a business plan no matter what type of business you start.

Sole proprietors especially may be tempted to skip this step, but you shouldn’t.

Writing a business plan or creating one with a lawyer takes patience, knowledge, and research. It’s a great first step in seeing if you have what it takes to run a real business.

 

Things to Consider When Starting a New Business

There are many things to consider when starting a new business.

To make it a bit easier on you, the U.S. Small Business Administration put together a list of 20 questions to determine if you’re ready to become a business owner.

When you're starting a new business, things you should consider are:

  • Why are you starting a business?
  • How much will it cost to start a business?
  • Can you spend the time and money required to start your business?
  • Should you get a loan for startup costs?
  • What kind of business do you want?
  • What products/services will you offer?
  • How is your products/services different from what’s already in the market?
  • Who is your ideal customer?
  • Where will your business be located?
  • Do you need employees/independent contractors? How many?
  • Do you need suppliers? What type?
  • How soon will you be ready to sell your products/services?
  • How will you price your products/services?
  • How long will it take to make a profit?
  • What competition are you facing?
  • What legal structure do you want and how will you set it up?
  • What’s your tax liability?
  • What types of insurance do you need?
  • How will you manage your business?
  • How will you advertise your business?

The above list is just some of the questions you should consider in the immediate time frame of thinking about starting a business.

You should be able to answer all of the questions before you file your first document or spend your first dollar to start your business.

Remember that as your business grows, there will be more things you’ll need to consider and be prepared for.

A business lawyer can help you with a few of the things on the list above such as the business structure, filing the needed paperwork, and even learning about your tax requirements.

You don’t have to figure all of it out alone. I’m here for you. Just email me at sam@mollaeilaw.com with your questions.

 

Steps to Starting Your Own Business

The steps to starting your own business are:

  • Write a business plan
  • Find financing
  • Develop a basic marketing plan
  • Decide on your business’s legal structure
  • Decide on a business name (make sure it’s not taken)
  • Register your business name
  • Hire a business lawyer to prepare organizational paperwork
  • Find a location if necessary
  • File for any needed permits and licenses
  • Determine your insurance needs and purchase it
  • Hire an accountant

When you’re ready to start your business, contact me at (818) 925-0002 or email me at sam@mollaeilaw.com and we’ll schedule your free consultation.

 

Conclusion

Sam Mollaei, Esq., Business Lawyer

Sam Mollaei, Esq., Business Lawyer

Starting a business is definitely not something you want to rush into.

There are many things to consider when starting a business, and overlooking just one area could make it very difficult on you.

Remember that starting a business should also be fun and exciting as you take the necessary steps to living your dream. Enjoy it!

There is no better time than today to get started. Why wait?

Email me at sam@mollaeilaw.com to take the first step towards starting the business of your dreams today.