5 Steps You Can't Forget When Starting Your Business

There are millions of small businesses located throughout the world today, with new ideas popping up almost every minute. Now that virtually anyone can set up a company and start selling online, more and more people are giving up their nine-to-five jobs in exchange for a shot at the good life.

While becoming an entrepreneur can be an exciting thing, it's also a risky endeavor, and something you need to plan with the utmost care. Not every small business will necessarily be primed for success from day one. The best way to boost your chances of a successful venture is to make sure that you're prepared with the following five steps.

Step 1: Do Your Research

If you're thinking of launching your own business, then you probably have a good idea of what you want to sell. Now's the time to start doing your research and finding out whether your plan has the potential to succeed. You'll need to go through a process of validating your business plan before you begin to invest in it, otherwise, you could be throwing your money at an idea that's doomed to fail.

The most important thing a small business needs to thrive is the ability to offer something that the market wants. To find something that your audience needs, all you need to do is look in your chosen industry and find out whether people are already asking for the item or service you plan to deliver. If there are people talking about your idea online, find out how many competitors you're going to have when you get into that space, and decide what you're going to do to differentiate yourself.

Step 2: Have a Plan

Once you know that your business idea is viable, it's time to create your plan. A business plan is simply a basic blueprint that you can use to guide your professional decisions as you move through the start-up phase, into the position of a legitimate business. The good news is that there are plenty of different business plans available for you to choose from.

Whatever you do, don't try to skip the planning stage to save yourself some time. There are plenty of people out there who assume that they can make things up as they go along. However, the truth is that if you plan on seeking financial support from a bank or investor, you're going to need a traditional business plan.

Even if you don't have a lot of ideas for how you're going to manage your business, a basic set of guidelines is better than nothing.

Step 3: Sort Out your Finances

Most entrepreneurs will need funding from an outside source to launch their business. Running a company is expensive, particularly at first when you need to invest in materials, real estate, and even employees, but you're not necessarily making any profits. There are a few different ways that you can get additional capital to support your business strategy. For instance, you might decide to put your business on a crowd-funding website to gain support from potential customers.

The most common option is to get a business loan. Before you get your loan, spend some time putting together a spreadsheet that estimates all the costs you're going to need to endure to bring your company to life. This will help you to figure out how much you need to apply for in capital. It's also a good idea to compare your loan options online so that you can ensure you're getting the lowest interest rate.

Step 4: Choose Your Business Structure

Next, you're going to need to choose a structure for your business. Your structure will determine a number of different things about how you're going to run your company and pay taxes, so make sure that you make this decision early on. You can either start your business as a:

• Sole trader
• Partnership
• Limited Liability Company
• Corporation

If you're not sure which format is right for you, then the best thing you can do is talk to an accountant or business professional. An accountant will be able to give you an insight into how each structure will affect you in terms of tax expenses.

Step 5: Choose an Accounting System

Finally, put an accounting system in place that will help you to effectively track your expenses and make sure that you're not over-spending in any specific area. Small businesses often work best when they have systems in place to keep them on the right track. Your accounting system will help you to set your budget, manage things like your price points, and even determine how much you can afford to pay your employees.

If you're not sure about using a piece of accounting software, you can always consider hiring a professional to manage your numbers for you.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes