Sunday, March 3

What To Consider Before You Start a Business

A group of members excited as they starting with a business.

When starting a business, it is incredibly easy to get carried away and begin operations before you are completely ready. There are a number of steps that everyone should follow before opening their doors on day 1, some of which many people do not even consider.

By learning and following these steps, you significantly increase your chances at success as you mitigate potential problems later down the road.

Establish Legal Documents

Before you launch your business, there are a number of legal requirements you need to follow as well as business forms that need to be filled out. You will likely encounter dozens, if not hundreds, of different forms that all require your signature and approval, though there are four main forms that absolutely must be covered before you start.

Agreement of Operations

For an LLC, you will require an operating agreement, and for a partnership, you will require a partnership agreement; while these documents have a number of differences, their primary purpose is the same. An agreement of operations, regardless of your business model, dictates the internal operations of a business.

Documents such as this are implemented to ensure that upper management are all on the same page, and will abide by the agreed-upon rules and regulations of this agreement.

Business Plan

Business plans not only outline the direction and goals of the business but also utilize market data to establish financial projections and inform management decisions and sales strategies. Business plans also look internally, using a strength, weaknesses, threats, and opportunities (SWOT) analysis to avoid potential pitfalls and establish a unique selling point (USP).

A business plan may change as the business progresses; however, it is important to have one for direction before you start up.

Employment Contracts

Before you begin, you should know what terms you are willing to offer your employees, including salaries, benefits, leave, and various other information. It is wise to draft up an employment contract ahead of time and to check the labor market to gain insights into how many workers will realistically apply to the position.

Non-Disclosure Agreements (NDA)s

Designed to protect company secrets, NDAs are often included in the signing process when employees sign their contracts. Even if you believe your business will not require NDAs, protecting your information from potential competitors is always a good practice.

For business ideas that may revolutionize the field, such as in technology companies, NDAs are a necessity.

Find a Location

Once all of the legal documents are established and agreed upon by the necessary parties, your next step should be finding a location. While it may be tempting to launch your business from the comfort of your home office, you will likely need a legal business address to begin operations.

Moreover, a designated business location will give the company more gravitas, and it will function as a base of operations for any employees, customers, or clients you wish to meet with. While you may not yet be in a suitable situation to use the office full-time, having a location at the ready for intermittent use is more likely to draw in employees and customers alike.

Utilize Online Marketing

While traditional marketing may not be possible before business operations start, online marketing can begin months or even years before the first day in the office. By creating a website for your business, you will give customers and clients somewhere to go to see all of the information about your up-and-coming company.

Furthermore, social media pages and posts are a great way of establishing public engagement before you even open your doors, ensuring you are able to hit the ground running. Every day that you delay setting up an online presence is a day that you could be acquiring future customers, so ensure your online marketing predates the launch of your company.

Build Contacts

Many startups take time to gain momentum, so it is important to have contacts before your first day, as it will decrease the amount of time that your new company is stagnant. If you are providing products, then having the contact information and quotes for manufacturing teams should be done months in advance.

Potential investors, employees, and clients, and external contractors should also be established in advance, as you do not want to launch your company and then spend the first two months of operations tracking down people to fill roles. Having options at the ready protects you from verbal contracts falling through before written agreements are signed.

You should have four or five times the number of applicants at the ready compared to the number of employees you need. You should also have the information for numerous contractors and manufacturers, even if you will realistically only work with one in each industry.

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