One of the first things people think about when starting a business is money. They want to know how much it will cost to start a business, where they can find funding, how soon they may be making a profit etc…. It’s logical that money should be at the top a future entrepreneur’s mind.
Having cash on hand in a business, especially during the beginning stages, is important. According to Investopedia, “more businesses fail for lack of cash flow, than for lack of profit.”
That said, you can have plenty of start up capital for your new business but still struggle. Starting a business is tough, grueling work and it’s not necessarily meant for everyone. Curious about what you may need to start a business besides a full bank account?
7 Things You Need to Start a Business (and money isn’t one)
1. An idea
First things first. You need an idea for a business before anything else. For some people, this is the easy part. They may have invented a product that they are ready to share with the world. For others, coming up with a good business idea may take a little bit more time. Ask yourself about where your interests, passions, and talents lie. Ask yourself if you are looking to sell a product or a service. Once you have a preliminary idea, bounce it off others to help hone it.
2. A willingness to put yourself out there
Starting a business can be a very scary thing. In today’s gig economy, freelancers and entrepreneurs are on the rise, but that doesn’t mean you aren’t doing something difficult. When you see your friends from college or your neighbors across the street comfortably working at the same company year after year you might start to second guess yourself and your goals.
As frightening as it might be, you need to put yourself out there. Tell others about your business. Tell anyone, tell everyone! Embrace social media and use it as a way to share about your company, foster relationships with customers, and even get some free marketing opportunities.
Starting a new business is not the time to be shy. Don’t think you should wait to start talking about your company until it’s successful.
3. Rational and reasonable thinking skills
Oftentimes people think of entrepreneurs as dreamers. It’s true, they are dreamers. But, successful entrepreneurs don’t just have their heads stuck up in the clouds. They have rational and reasonable thinking skills. Why is this important?
In the beginning, even if you have plenty of start up capital it is better to spend as little as possible. Just because purchasing a lot of swag gear with your company’s logo looks really cool, it does not mean you should do it while the company is just getting off its feet. An entrepreneur needs to think through what expenses are necessary and when. Entrepreneur Bernie Klinder shared the following advice via Quora and Forbes, “Don’t spend a single dollar without thinking about how that dollar is going to grow your business.” Be rational and reasonable when making decisions for your business.
Starting a business requires not only an investment of money, but also an investment of time. At the get-go you will need to devote a lot of time to your business. This can be extremely difficult if you have a full time job already. You have to decide if it is worth it to sacrifice evenings, weekends, and any other available time that you may have.
5. A Support Network
As I’m sure you have gathered, starting a business can be pretty tough. It’s difficult mentally, emotionally, and physically. Having a good support network that you can bounce ideas off of, ask for advice, or that can even help you take your mind off of stressful matters is key.
The long demanding hours of starting a business can also be really hard on a family. Check in with your spouse or children throughout the process to make sure that everyone is still on the same page and has the same goals for the business.
6. (A little bit of) Professional help
This one is cheating a little bit because technically you do need money in order to hire professional help. When getting your business off of the ground there are quite a few logistics that need to be taken care of such as obtaining a Employer Identification Number, determining entity type, working on any patents or copyrights, and a business license and permits. In order to get started off on the right foot, hire a lawyer and/or accountant to help you.
As they say, Rome wasn’t built in a day. Neither will your business be. Being patient doesn’t mean being passive. It means to accept that things might not catch on as quickly as you thought. Don’t give up right away–your business will never succeed if it never has the chance.
Looking for more advice for your business? Contact us at Lumen Advisory and Finance!