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5 Things You Need To Know Before Starting a Business

5 Things you need to know before starting a business

This is a sponsored conversation written by me on behalf of Intuit QuickBooks and #WeAllGrow Latina Network. The opinions and text are all mine.

I fail at personal phone calls.

Everyone who makes up my personal circle of family and friends can attest to this. Even my kids will tell you I don’t do phone calls.

I’m a texting kind of mom.

Yesterday was a different story. Once in a blue moon, I take a few hours and make some calls and catch up with my peeps. So I spent an hour catching up with my friend of over 20 years, Niki, and then I made several more calls.

My last call was with another friend, Jesse, who asked me several questions about starting a business.

One of her questions was, “What if I’m not cut out for this stuff?”

If you’re not sure whether you want to take the plunge and start a business, check out this post, 5 Signs You’re an Entrepreneur. You’ll figure out very quickly if starting a business is right for you.

After leveling with her about the non-sexiness and real work involved, she wasn’t phased and was still raring to go. Her next question was, “Where do I start?”

So I gave her a few tips and a breakdown of the 5 things she will need to work on to get her business going.

Here’s my list with some great FREE resources from Intuit QuickBooks, the #1 accounting solution for small businesses.

#1 Creating a Business Plan

The first thing you need to do is get your ideas down on paper and build out a business plan. You cannot skip this step. I have seen so many business ventures fail simply because they did not have a well thought out business plan. If you can’t or won’t write a BP for your venture, then you really have no business being in business.

You have to be able to communicate your ideas and processes for yourself and others. Creating a business plan will enable you to think through, research and forecast many important things like:

The QuickBooks Resource Center has a great article on the 7 Elements of a Business Plan which include:

  • Executive Summary
  • Business Description
  • Market Analysis
  • Organization Management
  • Sales Strategies
  • Funding Requirements
  • Financial Projections

Do yourself a favor and spend a good weekend reading up on these, making notes and planning your research. As you go through these steps, you will learn more about your new business and what you need to plan for.

Once you are ready to create your business plan, head on over to Bplans.com and get a free business plan template to fill out.

#2 Picking the right structure

Another thing to think about is your business structure. The three main types of structures are Sole Proprietorship, Corporation and a Limited Liability Company. Each one has a specific function. For example, did you know that when you start a business, if you file zero paperwork, you are automatically considered a sole proprietorship?

There really are no benefits that I know of to choose sole proprietorship, since you miss out on many tax benefits and the protections of an LLC or corporation.

For example, if someone wants to sue your business, and you are a sole proprietor, all of your assets are at risk. That means your car(s), house, kids’ college funds, anything you own.

Read on about the different business structures and pick the one that’s right for you.

#3 Getting Funding

Once you have your business plan completed, you will know how much money you will need to get started. Remember you want to have enough to take you through the months or even years of the startup phase where there may be no profit.

The most common mistake new business owners make is not securing enough money to cover expenses until the venture becomes profitable.

You have several options, like tapping into family and friends, using your credit cards, finding a government loan, getting alternative or conventional loans. Each has it’s benefits and disadvantages, so it’s a good idea to learn about each option and the pros and cons.

Click here to learn about your options for securing funding for your new business.

#4 Picking a Location

I started my first legitimate business with my brother, Gene, when I was 23. By legitimate, I mean, it wasn’t two scrawny immigrant kids trying to sell stuff to our neighbors. We had a lot of those.

We opened an internet cafe that we thought would be a hit. We were both completely clueless and ended up singing a lease for a spot in a little shopping center that had zero traffic. We didn’t discuss or research things like street traffic and demographics of the area.

We worked really hard and poured everything we had both financially and energy-wise into it, it failed miserably. But we did take away some great lessons and we were young enough to start another venture that did succeed soon after.

Had we done our research on finding the right location, we could have avoided the miserable failure. Then again, we made so many mistakes with that cafe that we were probably doomed either way.

Do yourself a huge favor and research and educate yourself about the location.

Danay and Gene Escanaverino Zyber Center

#5 Know Your Numbers

I hate doing my finances.

There I said it.

I hate it, but I have to deal with it. I have someone who handles this for our business now, but when I was a solopreneur I did it myself. As much as I absolutely couldn’t stand it. So make sure you have a good grasp on your finances.

Invoicing

You need to get paid. Make sure you invoice your clients in a timely manner and follow up on those invoices as well. No one wants to make the “where’s my money” phone calls, but as a business owner you need to get over that asap. Check out 20 ways to get clients to pay their bills and invoices faster.

Use this free tool to build an invoice template.

Cash Flow

KNOW your cash flow. You can’t make any decently informed decisions without knowing where you stand financially at any given moment.

Here is a free cash flow template with examples. Use it.

Taxes

I know, it’s an ugly word. It will be even uglier if you don’t handle them. You know what I’m going to say. Suck it up and just get ‘er done.

Make sure you know about the 10 tax deductions every freelancer needs to know. One of my favorites is “Personal Development” (ie. learning and honing your craft).

Bonus Tip

Caffeine is a magical elixir that makes the hard work possible. Make sure you have oodles of coffee, soda or tea, whatever your caffeine poison is and get to researching and writing out your business plan. The only thing stopping you from creating a business is you.

And more coffee.

Don’t forget to check out Intuit QuickBooks on Facebook and Instagram for some awesome inspiration.

This is a sponsored conversation written by me on behalf of Intuit QuickBooks and #WeAllGrow Latina Network. The opinions and text are all mine.

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