It’s no secret that businesses are springing up everywhere. However a much lesser known fact is that more than half of these businesses will fail within 3 years. A big reason for this happening is because business owners fail to take the necessary pre-startup steps that will lay out a long term guide for the intended business.

The following seven tips is a good place for any aspiring entrepreneur with a strong business idea or has simply thought,   `I want to start my own business’.

1.     Survey the market and make your business plan

There are specific areas a basic business plan must cover. In order to compile a successful plan, there will be need to survey the market to get a clear picture of what your competitors are up to. The purpose of having a well thought-out plan is to make sure you are always a step ahead of competitors.

  • What is your business about?
  • What is the objective or goal of your business
  • Know your personal goals
  • Create an action plan to achieve goals
  • Conduct a SWOT analysis of your business
  • Project income and expenses of your business
  • Ascertain funding to sustain the operation of your business
  • Make a flawless marketing plan with the right strategies
  • Plan the budget well and stick with it
  • Read up and research about government policies, tax obligations, insurance, lease obligations and license requirements

2.     Get the right structure for your business

Creating the right “structure” will always be a subjective exercise. Each and every tax structure has advantages and disadvantages. So, to pick the right structure for your business, it is important for you to consider the following factors:

  1. The type of activity you intend to undertake and how high your business exposure to liability  is
  2. Your business plan – whether you will require additional partners for your business in the future.
  3. Whether the business will own significant assets.
  4. Whether you have adult family members who earn minimal amount of income.
  5. How do you plan to fund the growth of the business in the future.

 3.  Do not stretch your budget

The most common reason for failure of small startup businesses is that they run short of cash. Avoid spending on things that are not crucial for the success of the business. Until you start having a steady flow of resources, you will need to monitor and control your budget and cash flow. Stick with the budget plan, no matter what!

4.     Be willing to adopt new ideas

Being an entrepreneur requires flexibility. There will be need to change skill sets and other business strategies. This means you will be required to be open to changes. Seminars and networking events are where you can learn new things, after all, “knowledge is more precious than gold.”

5.     Spend on technology

If it is good for the business and will improve efficiency, do not hesitate to spend on installing a proper system. Documentation and data management is the key to ensure the successful running of day-to-day business processes.

6.     Explore the power of HR

With the right technology installed, you will need the right people to work with them. Hiring the right people with the potential to work with your business setup is important to improve the scope and growth of your business. Customer care, for instance, is an important and sensitive aspect of any business.

7.     Professional help doesn’t hurt

Seeking professional advice or a second opinion about important business decisions can make a big difference. There maybe oversights on your part that consulting with a professional can point out.

About the writer:

Elbert Tanuwidjaja is a director of ET Tax and Business Advisory which specializes in advising small and medium businesses. Elbert is a Chartered Accountant and registered tax agent with extensive experience in property tax area, tax structuring and management consulting for small and medium businesses.



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