When people start their own business, they often aren’t prepared for the emotional rollercoaster that can ensue. Sure, they’re ready for the long hours. They know that it will take hard work. They expect to have to make adjustments in their life. But for anyone who has ever got as far as getting a business off the ground, the initial issue of what it does to you mentally is one not easily forgotten.
Firstly, it’s an exciting time. You have a plan that you are confident will work, and you’re in a business niche in which you feel at home. The opportunities that stretch out in front of you are plentiful and worthwhile. Then, you’re also apprehensive. The thing about opportunities is, they aren’t certainties. If this whole thing falls apart, that’s your reputation trashed. Why are you doing this again?
Ah, because you’re also optimistic. You know, if you do this right, that there is no reason for it to fail. And it’s something you’ve researched, so you feel confident that it has the potential to succeed. And, as you can see, this is before you even hit the ground. Your emotions can pull you in so many different directions. You won’t have much time to think once things are up and running. So you need to do a lot of thinking before you launch the business. You need a checklist.
Item One: Your Business Plan
Every once in awhile you’ll see someone on the TV who has made their first billion before they even turned 30. As much as you may curse them when you hear that, you’ll go apoplectic when the next words out of their mouth are “Yeah, I don’t believe in business plans”. Somehow, they just stumbled into all that cash? How is that fair?
It’s not. They’re lucky. You still need a plan. What will your business do? Do you need premises? Do you need employees? How many? What equipment do you need? How much is all of this going to cost? Are you planning to borrow all of that? Are there grants you can apply for? Will you be looking for outside investment?
That’s nine questions, and there are more than those to answer. Take the time to answer them now, because if you want investment, or even for a bank to lend you the money, you’ll need coherent answers.
Item Two: Being Up On The Regulations
Dependent on where you are setting up your business, there may be more or fewer regulations to keep up with. However, it is your job to make sure you are compliant with them. It doesn’t matter if you think they are unnecessary, or excessive. You will need to keep state and federal laws and regulations in mind so that you can keep your business ahead of the game. If you get a reputation for breaking regulations, you’ll struggle as an employer.
It may be that you are required to register with a Secretary of State and file a confirmation of your business details with them. You can find a version of that confirmation statement explained here. Mostly, the information you will need to register pertains to what your company does, who its directors are and where it is located. You may also need to pass certain inspections at state level, to show that your premises are fit to run a business from.
Item Three: Your Timetable For Launch
Having a business plan is, of course, essential. That is the document that shows what your business will do when it is up and running. Before you get to that stage, though, you will have a lot of things to deal with. Are you planning to start as a “lone wolf” entrepreneur, or do you need to hire staff? Picking the right people – headhunting them if necessary – can take a while, so allow yourself plenty of time.
Your premises, also, are unlikely to arrive fully assembled and ready to plug and play. You’ll need to get them into shape – including testing all of the electrics and systems you’ll be using when you go live. You don’t want to have a “great switch-on” on Day One and see everything go up in smoke. Literally or metaphorically. Appointing a small transition team can be of major value to you in this respect.
Item Four: Contingency, Contingency, Contingency
No one sets up a business expecting it to fail, unless they are attempting to commit fraud of some sort. However, expecting a business to fail and being ready for what happens if it does are two different things. In some ways, it’s very simple. If your business fails, it goes bust, and you learn some valuable lessons. But that’s only if it fails completely. There may be chances to reset your expectations and rescue part of the business, if not all.
Your business plan will be based on revenues from operations – and at the start, these will always be projections. If your revenues fall short of what was projected, then there is the possibility that you will not be able to grow the business as you had planned. To set against this possibility, it is wise to have a contingency fund which can be used to cover shortfalls.
Item Five: Your Exit Strategy
You should also have an exit strategy in place. In fact, you should have two: one where you get out having made a success of the business, and one where you accept it’s not going to happen and move on. The former may involve selling to investors for a healthy profit and moving on to pastures new.
The latter should include having a sector of the business that can operate on a reduced revenue and with a smaller core staff. This way, if things haven’t gone your way in the beginning, you can still make something of the business. Or, at the very least, have something to pass on to someone who can.
It may seem strange to prepare for failure in business, but it may be the most important thing you do. Having learned the lessons of business failure you can then take them, and the money from any sale, on to another business. Everyone fails a few times before they succeed; you just need to make the success bigger than any failure.