So you’re thinking of starting a new business. Becoming an entrepreneur has plenty of positives. You’ll take control of your future career, you can take the lion’s share of the profit or split it with your partners, and you get to work in an industry you’re passionate about. However, there’s also a lot of risks that comes with being a small business owner, especially when you run a startup. To give yourself the best chance of success, do these four things before launching your own business.
1. Take Business Courses
You don’t have to get a bachelor’s in business to run a company, but taking a few business courses through a two-year associate’s program at your state university or community college can teach you a lot about running a startup company. While taking out a student loan or two will have an impact on your credit score, if you find the right student loan, you won’t have to worry about high-interest payments or paying tuition up front. After all, knowledge is a valuable business investment.
2. Make a Good Business Plan
Business plans are important for several reasons. First, they give you a roadmap your business can follow to turn a profit. Second, they let potential investors know that you understand what you’re doing. When you’re writing your business plan, remember to use plain language, keep it short, and break it down into steps that help you build a business that can run itself. Don’t forget that business plans are for investors first, so point out the profits you’ll make even if you care more about the products.
3. Research the Laws and Regulations
Even the most business-friendly parts of the country have plenty of laws and regulations you need to follow if you’re going to start a company. You need to decide what kind of business entity you’ll run, which taxes and regulations to watch out for, and who you’ll bring on as partners or co-founders. Each state has different laws, and while it’s a headache to do the research, it’ll be a bigger headache if you don’t do your homework.
4. Get Your Finances in Order
Good credit is essential to succeeding as a startup. A high credit score means you’ll be able to take out bigger loans at lower interest rates, and you’ll be able to rent larger offices or workspaces. Investors usually don’t worry too much about your credit score, especially if you have a solid business plan, but they may back off if your credit is bad enough to make it harder for you to get the loans you’ll need. Don’t forget that however much money you think you need now, you’ll need more as your business grows.
There are plenty of other things you can do to prepare to start your first business, but these four are essential. With good credit, the right knowledge and research, and a solid business plan, you’ll be well on your way toward giving your startup the best chance of being successful.