If there’s anything this last year has taught us, it’s how important proper preparation is. You’re a creative, a free-thinker with an innovative vision. Maybe you don’t see yourself as the “business type” but you know you’re good at what you do and people want to see more of it.
The steps of setting up a business, and doing it properly, can seem overwhelming, but with the right preparation and guidance you’ll save yourself a whole lot of frustration in the future.
Research, research, research
There’s an immeasurable amount of content online designed to help you start a business: blog posts (like this one!) videos, PDF guides, and even classes you can access remotely. You’ve got a wealth of information at your fingertips, and chances are you’ve already started taking advantage of it all. So what sort of questions can you be trying to answer with your research?
- How do I want to structure my business? Will I be a sole trader (that means you’re running your business yourself, taking on all profits and all responsibility), a partnership (splitting responsibilities, experience, and profits with another person), or a limited company (the business’ finances are separate from your personal finances with more stringent managerial and reporting responsibilities)?
- What does the market for my product or service currently look like? Who are my competitors, and how can I stand out?
- Who is my ideal customer or target market? What’s their demographic, what problems do they need solved, and how do I plan on reaching them?
- What legal steps do I need to take in order to set up this business? How do I register my business? Do I need anything like permits or insurance? What are the rules for selling goods online or abroad?
Generic and broad-reaching advice is great when you’re just starting out. You’re rearing to go, ready to make sales, with visions of your face gracing the cover of Forbes in a few years. We love your passion, but it’s important to plan the specifics of your business to prevent problems from arising further down the line.
Have a business plan
You’ve probably heard the saying, “the best offense is a good defense.” What makes a solid business plan so wonderful is that it’s both an offense and a defense. Not only are you mapping out your vision for your business – with clear, actionable steps you’re going to take to achieve it – you’re also foreseeing short and long-term road bumps you might encounter.
Your business plan is where a lot of the questions you considered in your initial research (target market, competitive landscape, pricing, structure) will be expanded on. It’s something you can keep on your desk, pinned to a bulletin board, or open on your computer so you can refer back to it again and again. Not only will a business plan help keep you on track, it also helps keep you accountable.
With all the value a business plan provides, it can feel daunting to actually create yours. If you’re feeling overwhelmed, Raedan has a dedicated 4-hour workshop where we help write your business plan. Sign up here.
Practicalities, like bookkeeping, are imperative for keeping your dream alive
We get it: the idea of bookkeeping is hardly exciting. Certainly not as exciting as your creative vision, the passion that you’re transforming into a business! But without the solid foundation that bookkeeping provides, your business won’t be able to soar.
When you’re just starting out, you may decide to try bookkeeping yourself. Luckily, there are some great programs out there like Xero that provide you with tools to do just this. You can also create a simple spreadsheet on excel and track your accounts there. By accounts, we mean records of all financial transactions of a certain type, like:
- Expenses – the money your business is spending, on things like utilities or salaries
- Revenue – the money your business is bringing in through sales
- Assets – resources owned by the business that have a measurable future value, i.e. cash, vehicles, long or short-term investments, equipment, etc.
- Liabilities – the money or debts owed by the business, like accounts payable or loans
- Equity – the value of the company, assets minus liabilities
Bookkeeping requires consistent diligence. You’ll be recording every financial transaction your business makes and assessing it to compile financial reports, or a summary of what all the numbers mean. You’ll then be making vital decisions for your business based on these reports and your understanding of the numbers.
Invest now to save in the future
This can all sound a little daunting when you’re just starting out. We often have clients come to us who are paralysed with fear, certain that the next decision they make will be the wrong one and doubting their ability to run their business.
If this sounds like you, hiring an accountant could be an important investment to make either at the very beginning of your business or a bit further down the line.
Bookkeeping is just one of the tasks a good accountant will do for you. They’ll not only track your numbers and compile reports, they’ll teach you financial literacy so you can understand exactly what it all means. They’ll offer advice on future business needs, hiring, pricing, and investments.
While it may be an investment in the present, hiring a skilled accountant who understands you, your business, and your goals will save you – money, time, and frustration – in the future.
If you’re interested in learning more, check at our How We Work page to learn about Raedan and our flight preparation process!