You’re onto a winner. You have a brilliant business idea with the confidence that you've cornered a market. You have vision, determination and dedication. You can see your end goal. Insight such as this can’t fail. Or could it? No matter how good your skills, experiences or ideas are, it could all amount to nothing unless you nail these five business essentials. Taking these five steps will set you up for business success and longevity.
1. It all starts with a plan
This is crucial! A business plan gives your vision clarity. It defines business direction and can help you secure finance. Your business plan is a chance for in-depth analysis and allows you to answer questions such as:
- Who is your target market? Do you understand their needs? How much appetite is there for your product or service?
- Who are your competitors? What is your business’ advantage over them?
- What opportunities exist for you, in the market or otherwise?
- What’s your advertising and promotional strategy?
- What are your sales and profit targets? How much money is required up front? Have you got suitable cash flow to support your growth?
Your business plan is a living, breathing document. Its actions and strategies change as your business grows and changes, and it should be used to guide your decisions every step of the way.
2. Budgeting for success
Developing a budget is a must for your business if you want it to have any chance of survival. Your budget is the means to reaching the financial goals you have set. Your budget should be used to monitor the financial impact of your business decisions and operations. Your budget summarises the expected revenue, income and expenses of your business operations for a given period. Through regularly monitoring this against actual results, you can see whether or not you are on track to meet your initial financial goals. You can reassess your goals at each period and make the necessary decisions and changes to stay on track. If you aren't tracking your income and expenses, you can’t possibly know where your business stands, financially.
3. Ensuring you have a sound structure
Choosing the right structure impacts every facet of your business. It affects who has the authority to make important decisions, how profits are distributed and even your tax and legal obligations. The three main structures commonly used by businesses are that of a sole trader, a partnership and a company. When choosing which business structure is optimum for your business, consider the size and nature of your business, as well as the compliance requirements. Remember, you should be choosing the structure that’s right for your business now - you’re not locked into it. If your business grows and changes, you can change the structure in the future.
4. Having peace of mind through protection
You protect family, your house and even your car. You should do the same with your business - don’t put all of your hard work at risk. No business, whether it is a small family owned business or large multi-national corporation, is immune to disaster or litigation. The size and nature of your business will determine what level of insurance you need. Identify the potential risks your business may face and decide if you should insure against them.
5. Finding a banking partner to take the journey with you
Putting the right banking solutions in place from the start is an optimum way to ensure that you have everything you need for the future. Before you do this, however, you need to know your own needs. Are you looking for a specialised service, or something more generic and simple? The big banks offer a comprehensive service, from securing a loan and helping with a business plan, to opening an everyday cheque account and providing online banking solutions. However, don’t rule out the smaller banks and credit unions that can offer personalised services and competitive rates. You need to determine what your individual business needs and then choose the right banking partner for you – for now and for the future of your business. Have you experienced startup success personally? Let us know your business essentials tips and tricks below in the comments!