Happy Holidays from all of us at Paul C. Armstrong Insurance Brokers Inc.
With the year quickly coming to an end, and a new year starting perhaps there are some changes coming your way. Maybe you’ll finally start your own business that you’ve always been dreaming of.
If you have the perfect idea for a new business, but are not quite sure how to get it up and running, this helpful quick start guide includes six steps that will help you on the road to success.
1. Take a personal inventory
The most important thing you should consider before starting a business is whether you are ready to be your own boss. The benefits of being in charge are obvious, but have you considered the risks? By taking a personal inventory, you can figure out whether you are ready to start a business. A few of the questions you should ask yourself include:
- Do you have time to commit to the business?
- Are you confident that you have a good product, service, or business model?
- Do you have the management, accounting, and marketing skills to run a business?
While you do not have to do everything yourself, you need to be aware of the responsibilities you will have as a business owner and have an idea of how you will get the support you need for areas where you lack the time, skill or resources to manage.
2. Decide how you will structure your company
You can elect to organize your company in 4 different ways:
- Sole proprietorship
You are the sole owner of the company in an unincorporated sole proprietorship. In this business type, you assume all the risks as well as all the benefits of the business.
In a partnership, you and a partner share both the expenses and profits of the business. The exact terms of the partnership should be outlined in writing in a formal partnership agreement.
A corporation is legally recognized as an individual or entity that is separate from its stockholders or owners. Cooperatives are comprised of individuals who run a business together according to cooperative principles in order to achieve the same economic or social need.
3. Expand on your business idea
In order to create a budget and develop a business plan, you will need to expand on your business idea by deciding the following:
- What products or service will you offer?
- Who is your target demographic?
- How many competitors do you have?
- What differentiates you from your competitors?
- How much market share do you think your company will be able to capture?
Being as specific as possible with your answers to these questions will help you create a more effective business plan.
4. Create a budget
Even if you have a shoestring budget, you can make your dream of owning a business a reality with proper planning and support. To determine your start-up costs, price the items you will need to run your business along with working capital for the first few years. Deduct any personal investments you will be able to make in the business to determine what your financing needs will be.
Take the time to make your budget as accurate as possible to avoid financial shortages down the road.
5. Understand business regulations and liability risks
Depending on the products or services you will be offering, you may need to obtain a government-granted license or permit. Complying with all business regulations for your business type will ensure that you can do business with major suppliers and customers. It will also help you avoid costly fines or even the threat of being shut down for non-compliance.
Your business may need to acquire government granted licenses and permits. This will not only help you avoid fines or avoid being shut down, but major suppliers and customers will then be able to do business with you.
During this step, you should also consult with your insurance broker about the cost of business insurance. Business insurance can ensure that your business continues to thrive even if you face unforeseen challenges. By talking with your insurance broker about your business needs you can determine the best type of plan. Coverage can protect your business from devastating lawsuits, loss of business property, and even loss of a business partner.
6. Develop a business plan
A good business plan will serve as your company’s road map to success. You will refer to your business plan many times as it should include your short and long-term goals as well as the steps you plan to take to achieve them.
While starting a business will not be without its challenges- no matter how prepared you are- by taking the time to complete each of these steps, you will boost your confidence and ensure that your business gets off to a successful start.
And finally don’t forget to call us, you local insurance broker to make sure your new business is covered against any losses.
Have a safe and Happy Holiday!