If you’ve had an entrepreneurial brainwave that’s going to change the world in ways that people can’t yet even imagine, you’re probably eager to dive right in and get started with your business start-up. Here are some things to consider first…
Keep an eye on hidden costs
This is something that almost all entrepreneurs can hold their hands up to and say that at some point they have been guilty of. The fact is that businesses have overheads. Little expenditures here and there that grease the machinery of average daily business operations. For example, if you are starting a restaurant, it could be something like buying napkins and disposable table cloths.
If you are starting a company that makes bespoke baby clothes, you may find that you run into the regular expenditure of buying new pink and blue cotton. You get the idea. Before the profits start to roll in, these expenditures are often taken from the entrepreneur’s own finances, meaning that the business books will balance in ways that are not exactly accurate.
Whilst these may seem like modest expenses, they very quickly add up, along with all the other costs coming out of your bank account. This can lead to issues down the line when everything is eventually taken into consideration and you realize that your business is not quite as profitable as you’d anticipated.
Keep an eye on hidden costs from an early stage to ensure you don’t end up with phantom profits. You don’t want to get yourself in a situation where you lose control, with impending debts, being chased down by County Court Judgement – want more info on a CCJ? Click the link.
Funding can be difficult
Finding someone who agrees to fund your start-up is going to seem like the weight of the world has been lifted from your shoulders. From the moment you cover your start-up costs, you will feel like all you have to do is put in the hard work and the profits will begin to pour in. But investors should not always be viewed as the saviour to your entrepreneurial designs.
Some investor groups, for example, may wish to sell your business after a few years, and others may want to take a huge slice of your profits for themselves. Make sure you know what you’re getting into from the outset.
Don’t quit the day job too early
Far too often, business launches are announced and the self-crowned entrepreneur of the decade quits their job to focus full time on their venture. Try to avoid this kind of rush of blood to the head. You can still call yourself the CEO of your bedroom-born empire, you can still print the business cards and attend the key events, you can still tell everyone that you focus all your time and energy on your business, but don’t quit the day job just yet.
You’re new. Things will go wrong. Many things.
From broken supply chains to bad PR, you could quickly find yourself in a non-profitable business with no income. Perhaps leave things a good 3-6 months before judging whether to walk away from your former income stream.