The idea of owning a company someday, isn’t that exciting? There are just a few things out there that are as exciting as starting your own business. But as exciting as it is, it is a lot scary as well. Developing a company or business from the bottom up is difficult, and it takes a lot of planning, execution, patience and most importantly; finances.
There are various things to keep in mind while starting our own business.
Create a business plan
First and foremost is to have a business plan, and we should draw up a budget for our business. We should financially plan for at least the first 12 months of our business. Adhering to this budget will be the difference between the success and failure of our business.
Retain the day job
If it is possible, we should not quit our existing job till we can get our business off the ground. Our business might some take time before it can bring in its own revenue. Therefore, having our day job will be helpful since we will have a source of steady income. We should try not to quit our jobs till our business can replace that income.
We should focus on assigning our capital to the advancement of our business. In the initial stages of our business, we should try to keep things simple. There is no need for a big office or to hire a lot of people, unnecessarily. We can build on that as our business grows. As an entrepreneur, we should know all the aspects of our business and what goes on in the office. It is best to know how all departments of our business works. While buying long-term assets for our business, we should consider applying for a business loan instead of exhausting the liquid cash.
Keep business funds separate from personal funds
We should be extra careful to keep our personal fund separate from our business fund from the very beginning. We should open a separate bank account for our business. This way, it assures that we don’t dip into our personal funds to use for our business expenses. This will help us make sure that we don’t run short on our personal funds by using it for our business. We should constantly be aware of every expense or income that takes place in our business.
Set up an emergency fund
It is always best to have an emergency fund— business and personal. Business and personal emergency funds should always be kept separate. In case of a bad situation, it is always best to be prepared and this will help us.
Ask for outside help
It is okay to have the help of a third party in the time of need. It will only help us if we hire someone to guide us in assessing our finances if we are not able to do so successfully by ourselves.
Create realistic financial goals
It is important to create realistic financial goals for ourselves and our business. This way we will know if our business is headed in the right direction. We can begin by establishing smaller goals – daily goals and weekly goals, and then we can slowly establish long term goals for our business.
Reward you hard work
Rewarding hard work helps with increasing motivation. Although it is our own business, it is important to give ourselves a salary at the end of every month. This doesn’t mean that we give ourselves a hefty salary in the beginning of the month. We should give ourselves enough to live comfortably without hindering the growth of our business.
Time is money!
It is important to make the best use of our time. If we still have our day job, we have to find a way to juggle our day job and our business without it affecting our performance at both.