Starting a business is a daunting task. Statistically, there’s a 50/50 chance your business will survive the first five years. And who’s to say you’ll be able to scale — or even pay yourself a livable salary in that timeframe?
There are many opinions on how to stay afloat for those first five years (and beyond). A quick Google search on the matter leaves any budding entrepreneur reeling. But have no fear, we’ve cut through the bullshit and boiled down what you need to know. We’re looking at just the essentials in this round-up of our Starting Your Business category.
This is a starting place, but a good resource nonetheless for anyone who wants to get down to the basics of making your business survive and thrive.
#1. Get funded
Funding is a barrier to many entrepreneurs. They have a great idea for a new product or service, the strategic plan and leadership to execute it, but lack the funding to get their dream off the ground. Fortunately, they have options.
Crowdfunding is a very popular means to fund new businesses. To date, $16.2 billion has been raised on crowdfunding sites. There are now sites like Seedrs, Code Investing and Crowdcube that are specifically geared toward business ventures.
Peer-to-peer loans are also a possibility, because they cut the bank out of the lending equation and connect you directly with investors. These loans typically carry higher interest rates but they have a higher acceptance rating than traditional bank-backed funding.
You may, however, know an angel investor. This could be a wealthy friend or loved one who can infuse your business with cash to get it off the ground.
Friends and loved ones who aren’t in a position to loan you hundreds of thousands of dollars but have an interest in the business may want to form a co-op. In this case, they become part owners and offer their opinion and talents on major business decisions.
#2. Make the time
This is the easiest and the hardest. Anyone can find little ways they can adjust their schedule to find more free time. But how willing are you to make those changes? That’s where the hard work comes in.
It’s all about choices. If you truly want something different for your life, you must choose to change your schedule. Change is never easy but it’s almost always important. Ask yourself, is starting my business important enough to change my lifestyle?
You’ll notice that this section isn’t called “Find the time,” it’s called “Make the time.” If you’ve got that fire in your belly you should stop at nothing to create time to properly build your enterprise.
If you can’t find time in your schedule, buy it back. Determine the minimum amount you can live on and put the excess into a Freedom Generator until you’re able to pay your personal bills with just that passive income. When you’re Financially Free, you can choose where to spend your time without worrying about your personal Financial Security.
#3. Get paid
We all dream of building a business that is an instant success. As soon as you open you make enough money to cover your overhead and pay yourself a family-sustaining salary. Sounds great, right?
Unfortunately, this scenario is the exception, not the rule. The reality is many small business owners, especially those who are just starting out, struggle to pay themselves on time.
Protect yourself by purchasing insurance like workers compensation, short (and long-term) disability and life to provide for you and your family. Another form of insurance is your Security Buffer. Save at least one month of operating expenses in this fund to cover costs if needed.
Being able to pay yourself on time, or at all for that matter, depends on your clients’ ability to pay you. Vet your clients before they sign a contract to make sure they are legitimate. Include payment terms and a deposit amount in your contract to ensure that you are paid for your work.
#4. Minimize mistakes
You’ve heard it a million times, “everybody makes mistakes.” It’s true. But when it comes to your fledgling business you need to make as few mistakes as possible.
Start by creating a solid team. Granted, the team may be just you to start. But when you’re ready, engage a virtual assistant to help you with everyday tasks. Then you have the time to focus on advancing the vision of your company.
When the time comes to hire warm bodies, consider your strategic plan and decide which roles you need to fill to reach your goals. If you determine that you need to hire a salesperson, find a qualified candidate who shares your passion for the business.
Consulting with an impartial third party will also help minimize mistakes. Business coaches help you see your problems with objectivity and clarity. If you can’t afford a coach, find a mentor in your industry or keep up with articles and books written by a business coach you respect. You may also want to join a local business development group to learn from your peers.
#5. Set reasonable goals
Setting reasonable goals may seem obvious, but many entrepreneurs neglect this step. Make goal setting a priority and follow these SMART goals guidelines:
Specific: Set a goal that has a measurable outcome.
Measurable: Create a goal that has a number-based outcome.
Attainable: If your goal is too lofty, you will probably get frustrated a give up. Set a goal too low, and it is really a goal, at all?
Relevant: Focus your goal on the outcome, not the individual steps to get there. Make sure it jives with your long-term strategic plan.
Time-Based: Pick a reasonable timeframe to complete your goal. A good timeframe is one that gives you a sense of urgency but doesn’t overwhelm.
Keep your goals SMART, and you won’t go wrong!
Starting a business is challenging, but not impossible. You have what it takes to create a successful business but you must choose to do it the right way if you want to find success.
You can find Financial Freedom by starting a business and becoming your own boss. Start planning today and create an enviable future for you and your family.
The views and opinions expressed are those of the guest author and do not necessarily reflect the views and opinions of MindShift.money.
image credit: Bigstock/monkeybusinessimages
Amanda Witman is a freelance writer and editor who is passionate about communicating ideas that improve readers’ lives. She has a background in government public relations but has experience writing for many sectors including the financial, tech, culinary, environmental and sports industries. Amanda resides in the heart of Amish Country in Lancaster, Pennsylvania with her husband, two-year-old daughter and an overprotective cat.