Some estimates say that more than 625,000 businesses start each year. About half of those businesses will make it to their fifth anniversary.
How you start your business sets the tone for the first several months and beyond. You want to make sure you start off of the right foot.
Read on to learn the top 5 things you and your startup business must have to be successful.
1. License and Registration
You do need to register your business with the secretary of stateâ€™s office where you want to headquarter your business. It could be in your state or elsewhere.
When you register with the state, you select your legal entity, such as sole-proprietor or LLC. Sole proprietorships donâ€™t have a lot of paperwork to handle.
Do you need to know how to incorporate your business? LLCs and other corporations need to have articles of incorporation and an operating agreement, along with the application fee.
2. Business Plan
A startup business plan is a document that shows you did your homework. It outlines your understanding of the marketplace, the competition, and the obstacles that will get in your way.
The business plan also gives you a financial plan and goals to meet. Youâ€™ll know your expenses and the amount you need to bring in each month to be profitable.
3. Financial Skills
Cash flow is one of the most common reasons why businesses close. Itâ€™s tough to manage cash flow when your income is inconsistent.
You may find that changing your business model to a subscription model would help your cash flow. You also want to make sure you have a system in place to invoice customers automatically and make it easy to accept payments.
4. Money Stowed Away
You donâ€™t want to put pressure on yourself to be profitable right away. You want to take your time to build up the business.
If you are under pressure to make money from the outset, youâ€™ll end up taking on customers that arenâ€™t the ideal fit for you. Money in the bank relieves that pressure, which allows you to attract the right customers at the right time.
5. Strong Boundaries
Business owners want to do a great job for their customers. They may not realize it but they are setting the wrong expectations when they answer emails and take calls 24/7.
Customers will come to expect that, no matter what. That will make your customers happy, but youâ€™ll be miserable in the end. Youâ€™ll sacrifice family time and have no downtime at all.
The best thing you can do for yourself and your customers is to set strong boundaries. Let them know upfront what type of support they should expect from you and stick to that schedule.
Build a Strong Startup Business
A startup business is only as strong as the foundation you build when you start the business. If you want your business to grow, you have to be able to manage finances, have the business registered, and set strong boundaries with your customers.
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