Being a new business owner means learning a lot on the job. No matter how experienced you are at starting a new business, there are challenges to overcome and questions to answer. By keeping an open mind and staying willing to learn, you can maximize your chances of success and that of your business.
Still, learning doesn’t always mean understanding lessons from your own mistakes. There are plenty of business success and failure stories to learn from. In this article, we are going to talk about the 5 do’s and don’ts of starting a small business based on the experience of other business owners who have succeeded – and failed – in setting up their businesses.
Do: Invest in Your Team
Investing in your team as a small business owner is a must. This is just as important if you’re a one-person business. If you are an employer, every team member counts and the best way to maximize their value is by investing in their personal growth. The growth of your business depends highly on the growth of the people in your organization.
When you have committed and capable people filling strategic roles, there is nothing you can’t achieve. Since you always know how capable your team members are, you can stop micro-managing early and begin trusting the skills of your team.
Don’t: Waste Money on Unnecessary Expenses
No matter how cool a fancy office or a brand-new laptop for employees is, your business needs to stay lean for as long as possible. Money is a limited resource and you have to be extremely wise about how you utilize the money you have.
Yes, there are ways to raise more funds and finance business operations, but that doesn’t mean you can waste money on unnecessary expenses. After all, every penny you spend will affect your bottom line, and the bottom line is everything in today’s market.
Do: Get advice on the right legal structure for your business
Just because you’re a solo business, doesn’t mean that being a sole trader is necessarily the best legal structure. If you’re a consultant then it often makes more sense to set-up as a Limited Company. See this useful guide to those two main UK business structures – sole trader or limited company. There are other legal structure options too.
If you are in the USA there are different legal structures again, including the LLC. If you’re not sure how to form an LLC, companies like My Company Works can help you complete the process without hassle.
It is well worth getting advice from a Chartered Accountant or a commercial lawyer at the outset to make sure that the legal structure you opt for is the best in terms of ownership, flexibility and tax implications for your particular business model.
Don’t: Mix Your Finances
If you set up as a sole trader then you do not legally need to have a separate bank account, but you do need to keep very clear financial records. For all other legal structures you will need to have a separate account. The business is a separate legal entity to you. It is important that you do not mix up finances.
Get an accountant to manage your finances as soon as you can. A good accountant will save you money. But never delegate everything; while it’s better you use your time to focus on the things you do best, you should always make sure that you understand your finances and are fully involved in financial decisions and planning.
Yes, there are a lot of challenges to face when you are starting a new business, but not taking that first step isn’t a solution either. Don’t take a risk, do take a calculated risk. Ideally test trade and make some sales first, then when you’ve done your sums, don’t hesitate: take the leap. You know the market is ready for your products and services, customers are eager to try new things, and you have everything you need to succeed.
Besides, we already cover the essential dos and don’ts in this article. You know the mistakes to avoid and the right things to do in order to give your business the best chance of succeeding. All there is left to do now is take that first step of bringing your business idea to life. With a mature idea in mind, you will have a business up and running in no time.