If you want to take control of your financial future and enjoy greater professional freedom, it might be time to ditch the 9-to-5 job and become your own boss.
It could be one of the most rewarding decisions you will ever make. However, it will come with many challenges and risks that could make or break your venture.
To make sure that you get your company off to the best start, here are four factors you must consider before starting a business.
- The Right Industry
While you might know your current job inside and out, it might not be the best industry choice if it doesn’t light a fire inside of you. If you want to wake up every day feeling determined, pick a field that fills you with passion.
For example, if you love to snap high-quality photographs in your spare time, you could turn to the likes of ShootProof to create a successful photography business that will grab clients’ attention. Starting a business in an area that you’re passionate about will boost your motivation each day. You will then be more likely to find many customers, grow your annual revenue, and build a positive reputation.
- Business Structure
As soon as you have found the right industry, you’ll need to identify the correct business structure for your needs. Many entrepreneurs often choose sole proprietorship, as they will have control of every aspect of their business. The biggest downside is that you will accept all financial responsibility following a lawsuit.
If you don’t want to accept personal liability, a partnership might be a better option, but the business will be divided with at least one other partner. Alternatively, you could set-up a corporation and divide the business with a minimum of five stockholders.
- Asset Requirements
Almost every new business will require an initial investment in various assets, which will be essential for its daily operations. For example, you might need to get prices for electronic message boards and buy:
- Computers
- Equipment (for example, a photographer would need to buy high-quality cameras, LED ring lights, softboxes, etc.)
- Company vehicles
- Furniture
Write a list of the essential assets you’ll need to buy, the quantities, and prices, which can help you to identify the budget you’ll need to start your new business.
- Sufficient Business Capital
Insufficient capital is one of the biggest causes of business failure. If you underestimate the amount of money, you’ll need to launch your venture, or you don’t have a firm understanding of cash flow, it might not be long until your company is forced to shut forever.
Before you start building your brand and investing in the products listed above, identify exactly how much capital your company will need to operate each day.
For example, you’ll need to consider:
- Lease payments
- Monthly inventory fees
- Shipping costs
- Software and subscriptions
- Licenses
- Operating fees
Plus, you must build an emergency fund to pay an unexpected bill with ease, which can take the financial pressure off your startup.
