Starting a business can be an exciting and rewarding venture, but it’s important to carefully consider a few key things before jumping in. You’ve likely heard the stories of multiple failures and low success rates for first time entrepreneurs, but many businesses fail for the simple reason that their founders forget to focus on the basics.
By taking care of some fundamental business strategies, you can massively increase the probability that you’ll succeed in your entrepreneurial journey. To help you on your way, we decided to compile the top three things to think about when starting a business.
Develop a business plan
A business plan is a crucial document that outlines the details of your business, including your goals, target market, and financial projections. Your business plan is the most basic way of finding out if your business will be profitable or not, and will help you to identify the areas that will require investment.
It can also help you secure funding and attract potential investors, so it’s important to spend time developing a thorough and well-written plan. Spend a lot of time on it – any basic problems that you can predict early on can often be avoided, allowing you to massively simplify your business’s success trajectory.
Choose the right business structure
The type of business structure you choose will have important legal and tax implications, so it’s important to carefully consider your options. Common business structures include sole proprietorship, partnership, corporation, and limited liability company (LLC). Each has its own advantages and disadvantages, so it’s important to choose the one that best fits your needs.
Consider shareholders agreements
If you’re starting a business with one or more partners, it’s a good idea to put a shareholders agreement in place. This document outlines the rights and responsibilities of each shareholder, as well as the rules for managing the company and resolving disputes. Some key points to consider when drafting a shareholders agreement include, but are not limited to:
- The percentage of ownership held by each shareholder
- The rights and responsibilities of each shareholder
- The process for making decisions and resolving conflicts
- The allocation of profits and losses
- The rights and obligations of the shareholders with respect to the management of the business
In addition to these three things, there are many other factors to consider when starting a business. For example, you’ll need to choose an appropriate location, obtain necessary licenses and permits, and secure funding. You’ll also need to carefully consider your target market and develop a marketing plan to reach potential customers.
For more specific advice on some of these points, it’s likely necessary to reach out to an employment law specialist.
They’ll be able to help you draft contracts such as your shareholder’s agreement, and advise on other appropriate legal structures. By taking the time to carefully consider these and other factors, you can set your business up for success.