I’ve heard people say that owning your own business is like juggling or plate-spinning. You have to keep your eye on so many different things. Here are five best practices to incorporate into your strategy for launching your new business.
So, you are ready to take the plunge into entrepreneurship. Congratulations, it’s exciting! As you get started with your new venture, here are some best practices to keep in mind when first setting up your business and in those vital early months once you’re up and running.
Do not co-mingle business funds with personal funds! You formed an entity to protect yourself. Co-mingling funds pierce that veil and negate that protection. Talk to your CPA about what investment you will make in the business. Make that investment into a business checking account and pay all business expenses from there. That also means all business revenue should go into the business account, not your personal account.
In addition to a start-up budget, know your monthly overhead. Establishing revenue projections allows you to evaluate how much revenue you need to cover your costs, achieve a profit, and plan your cash flow.
2. Obtain a Business Address
One of the first steps in opening a business is creating an entity. This is done early in the process before you have an actual location. I see many people make the mistake of using their home address when creating the entity. Why do I say it is a mistake? Because this is a public record, and you have just given your personal address to anyone who cares to do an internet search.
3. Decide if a Trade Name is Right for You
If you are forming an LLC (Limited Liability Corporation) in Arizona, you must put that LLC on anything with the company name. Letterhead, business cards, websites all require you to notate LLC. By obtaining a Trade Name, you can eliminate that requirement. Trade Names are inexpensive and can be renewed every five years.
4. Value Your Time
While starting a business requires wearing many hats and sometimes doing everything, you want to be mindful of how much your time is worth. None of us are experts at everything, and sometimes it is more beneficial to spend our time elsewhere. For example, setting up a new computer. Maybe you know enough to get all the updates, load the software, set up the printer and Bluetooth. But how long is that going to take you? I consider myself tech-savvy, but it would probably take me half a day to do this. If I multiply my hourly rate x 4 hours, would it be more cost-effective to have a professional IT provider spend one and a half hours doing the same thing, but better? The answer for me is YES!
5. Hire Talent with the Needed Skillset
I’ve often seen where Uncle Bob is hired to do the bookkeeping because he is trusted. However, Uncle Bob’s background in engineering doesn’t correlate to maintaining the financials. The good news is Uncle Bob is not stealing from the company. The bad news is that the books are a mess, costing you more when it comes to tax time, not to mention money is being left on the table because Uncle Bob doesn’t know what he is doing.
Another scenario I often see is hiring someone because they are your friend or you like them; however, they don’t have the skills needed for the position. That is not to say the person is not a good hire, just not for that position. If you must tweak the job based on the individual, your business will suffer. Create a position description, then use that as a guide to ask yourself if a particular candidate is a good fit for the position regardless of who they are.
Contact Flourish Today
There is so much more to starting a business than most people think, especially if you want to build your company on a solid foundation. Having the right team can save you time, money, and headaches! So, why not start your business with a Flourish?
As a business consultant, I’ve spent years helping entrepreneurs launch their new ventures. I’ve developed a flexible, personable, non-judgmental approach that helps small business owners set and achieve their goals. While you’re here, read this blog…it might be helpful – Starting a Business? Are you going to wade in or jump in?