Starting a business is quite an undertaking. You need an idea and gumption enough to bring it to life. Of course, it takes more than an idea and gumption. Time, energy, and funding all factor in as well. Let’s say you’ve got the idea, the gumption, the time, the energy, and enough funding to kick things off.
Here are five things that are going to make all the difference as you get started:
1. Do the things that are free (or very inexpensive) first
Get an EIN, establish a legal identity for your business, and get accounts created just for your business. Whether or not you’re looking to get business financing, you should still write a business plan so that you have a clear outline on how your business will run. When you’re done, you’ll have more than just a document that’ll help you secure funding–it’ll help you consider aspects of your budding business that you haven’t thought of yet.
Fortunately, you can get started the instant you have your brilliant idea, no cash needed. So before you move on to the next steps, be sure that you’ve got your primary bases covered.
2. Prioritize your spending
Start by making another list of all the equipment you’ll need to get going. In this ledger, write down everything–even if it’s free, you already own it, or it’s something you need to acquire. Then list how much that item will cost, and its status.
Let’s say you’re planning on creating a full-time business selling your paintings. Perhaps your ledger would look a little like this:
Clearly this illustrative chart seriously underestimates what you’ll actually need to create, but it does give you a look at what’s required. Again, this is a goal that you can complete for free before jumping in with both feet. No matter if you’re using personally raised funds, an SBA loan, or a business credit card to fund your startup, you’ll want an accurate idea of how much you’ll need to invest every month into your burgeoning venture.
3. Make your budget and stick to it
You might be in a select group of people who can start a business without crunching some serious numbers, but the rest of us will be filling up notebooks and Excel sheets trying to get the math right.
Once you’ve got the ball rolling with your business, be sure to update the ledger and keep track of your expenses in a way that makes sense for you. Accounting software can help you with your income and monthly expenditures, but keeping a physical copy around can’t hurt. No matter how you choose to keep your books, keep track of every dollar that comes in and goes out (read more about cash flow here). Not only will this help during tax season, it’ll help you chart your growth as a business.
4. Make every dollar count
If you get into the nitty-gritty, every problem has a handful of solutions—all you have to do is find them. This is especially important when you’re trying to get your business off the ground.
When you’re making your initial investment to establish your venture, look for creative ways to stretch your dollars. Here are just a few cost-cutting ideas to consider when starting out:
- Check your area for liquidation sales for office equipment.
- If you have small jobs that are out of your skill set, check out Fiver.com, where you can hire someone to design your logo, write a jingle, or retouch your headshots.
- If you can’t buy something you need, see if there are reasonable leasing options (which can be a great way to build business credit, too).
- Hire your kids (or someone in the neighborhood you trust) for small tasks on an as-needed basis.
5. Talk to tax pro to discuss potential write-offs
Sometimes hiring a professional is absolutely worth the investment, and a good accountant can help you stay in the black. When starting a business, there are so many tax implications to consider that it might just make your head spin. Talking to an accountant or tax advisor may influence where you spend your startup money, which again, will help you get bang for your buck.
For example, if you’re using your personal car to conduct company business, you may be able to write off those miles during tax time. But did you know that in certain situations, you can write off even more if you display your company’s details on the car because it’s considered advertising? And that’s just one pro tax tip–your local advisor will be able to help tailor their advice to your situation to save you even more in the long run.
Before you arrange your appointment with your tax professional, you’ll want to organize as much information as you can. This will include all the documents and ledgers you’ve created here, as well as your personal and business credit reports. Armed with all of this information, they’ll be able to better advise you as you confidently make your way into the business world.
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