Editor’s Note: This post was written by guest blogger, Danielle Rodabaugh. Learn more about her in the bio below this post.
If you’re a young entrepreneur who’s planning to start up your first enterprise, you might not know where to start. To help you on your way, work though this checklist when brainstorming your next entrepreneurial venture.
Running a successful business takes more than a good idea; you’ll also need the ability to execute it. Finding an experienced mentor to help you should be your first priority. Your mentor will give you invaluable advice based on how the business climate actually works.
- Business Plan
Creating a business plan is typically the most boring part of the process for young entrepreneurs, but it’s a crucial step for every new enterprise. Your business plan will help you set realistic goals and then allow you to track them.
Starting a business will likely be costly no matter your line of work. You might need to pay for license and registration costs, too. If you plan to run an online business, you’ll have to purchase a domain name and then pay a server to host your site. Even operating a basic lawn and gardening enterprise requires you to purchase and maintain equipment.
Once you know how much you’ll spend on overhead costs, you’ll have to find a way to pay for these expenses. If you have a bank account with the necessary funding, you’re set. However, if you need additional funding you’ll have to speak with investors, which could range from friends and family members to financial institutions such as banks. Whoever backs your funding will expect your business plan to effectively explain how exactly you plan to turn a profit.
Before starting your business, you should fully understand any federal, state or local laws that regulate your industry. Some laws include hidden costs for business owners, such as licensing fees. Understanding current industry trends can also help you determine the best way to run your business.
- Surety Bonds
If you’re wondering, “What is a surety bond?” you’re not alone. Surety bonds prove that you have the financial credibility necessary to work in a certain industry. You must always maintain your surety bond according to law. To the surprise of many new business owners, the inability to get or maintain a surety bond according to law can keep them from running a business. If you’re required to have a surety bond but don’t have one, you could face license revocation, penalty fines and even legal action.
Most lines of work require business owners to be licensed and registered before they can legally operate an enterprise. You might think that licensing laws won’t affect your business venture since you’re young, but this isn’t the case. In recent years, city governments have even been known to issue citations to children operating lemonade stands without the proper licensing. Getting licensed and registered can be a hassle that includes hidden costs, it’s better to be safe than sorry.
No matter what scale you plan to operate your new enterprise at, you’ll have to file all applicable taxes according to law. The IRS has a great online resource for self-employed individuals. If you have any questions about the taxes you’ll be expected to pay and how often you’ll be expected to pay them, get in touch with your accountant as soon as possible. Failing to file taxes correctly could result in some unfortunate consequences that will haunt you for the rest of your life.
Whether you plan to open a business online or in your hometown, you’ll need to fully understand how the market works. If you’re looking to attract clients in your area, you’ll need to know that people will pay for the products and/or services you’ll provide. Otherwise you could lose your initial investment and then be left with inventory that you can’t sell.
To effectively infiltrate your industry, you’ll have to do some invasive market research based on the type business you plan to run. For a physical business, you’ll need to evaluate the local competition that operates in you area and brainstorm ways to compete with them. If you’re planning to run an online business, you’ll have to research how competitors implement online marketing strategies that appeal to consumers nationwide.
Coupled with a level-headed demeanor and realistic business approach, this list should help you find entrepreneurial success.