Think you have the next big idea? Before you go taking out any business loans, make sure you have an air-tight plan in place. Too many entrepreneurs are overly anxious to launch their startup company and pull the trigger before thinking through every single detail.
More often than not, this type of oversight leads to costly consequences and forces business owners to shut their doors before they even had a chance at success. Beat the odds of failure and avoid becoming another statistic by having these five tenets in place.
- Business Plan & Projection
The most expensive mistake you can make as an entrepreneur is to skip the market research and analysis stage of business planning. In order to create a value position, you need to identify what makes your business unique. How does your product or service provide a solution to a need? Who is your target audience? Why would they choose your offering over the competition’s?
Keep these questions in mind while setting your price and creating your sales projection. Identify at what point in time you’ll start flipping a profit and pull enough revenue to offset startup costs, then present these calculations to investors when it comes time to obtain funding.
- Sustainable Funding & Marketing
Some entrepreneurs choose to launch their startup with their own capital, but this is a risky move. Should anything go sideways, then so too will your personal investment. Rather than placing your livelihood on the line, explore different funding options available to you, some of which are more sustainable than others.
From partnerships with investors in exchange for equity, to crowdsourced campaigns on Kickstarter, every deal will come with different terms—be sure to go with the model that makes the most sense long-term, not the one that provides the fastest solution to your problem. Usually, the easier it is to get funding, the higher the interest rates are on the loan.
Be sure that whatever funds you do obtain are carefully allocated between overhead costs and marketing initiatives. For example, you don’t want to spend too much money on direct mail marketing only to realize your audience is best reached through digital channels. Once you have the capital, make it last for as long as possible.
- Employee Recruitment & Retention Strategy
You need to hire the best employees you can find, so it’s wise to formulate a recruitment strategy that attracts the best applicants on the job market. Whether you post available positions on job board sites or head to a local career fair, the role description should highlight reasons why someone would want to work for you over the next company.
When you locate a potential hire, confirm that the candidate is who they say they are by running a criminal background check. What is a background check? Essentially, they can reveal red flags if your applicant has relevant criminal offenses in their history, suggesting they’re not the best fit for the job.
After making the best possible hires, increase their odds of them sticking around by creating an employee retention program. This helps reduce the cost of turnover while uplifting company culture and moral.
- Well-Built Website & UX
In order to attract business, you’ll need a website that’s built with search engine optimization (SEO) in mind. SEO refers to the strategies and practices used to boost your online presence by appearing higher on the search engine results page (SERP). Remember to claim your listing on local business platforms with contact information and hours of operation, regardless of whether you run a brick-and-mortar space or an ecommerce storefront.
Your site’s architecture needs to be properly indexed so that Google can crawl its pages, and the design should consider user experience to increase your chances of converting traffic into paying customers.
- Organized Bookkeeping & Accounting
Finally, it’s critical that small business owners adopt a meticulous accounting process to ensure no transaction, small or large, falls through the cracks. Falling behind on quarterly estimated tax payments can lead to large penalties and interest fees, and there will be very little margin for error within your business budget.
If you keep your company organized and your books balanced, your goal of a success will be within close reach.