By Deborah Sweeney
Oct. 21, 2010
New businesses often risk shooting themselves in the foot as they’re getting started. It’s not easy to be an entrepreneur. Not only are you getting your business up and running, your operations solidified, and your marketing strategy off the ground, but you are also trying to make sure you’re managing your business properly and minimizing liability. These tips will help you to prevent shooting yourself in the foot as you transition from start-up to full fledged business:
1. Incorporate before doing business: For liability reasons, it’s wise to make sure you incorporate or form an LLC before the business takes off. This can help protect personal assets by separating the business from your personal affairs. If anything were to go wrong with the business, it’s wise to make sure your house, car and personal effects are properly protected.
2. Consult a tax professional: If the type of business entity you should form is not clear to you, it’s wise to speak with a CPA. CPAs can help you understand tax implications and how the different structures can help you protect your assets, as well as save money on taxes.
3. Learn your market: It’s wise to know your market. Understand who your customers are and target them. One of the best ways to do that is to emulate a business in your industry that you believe is doing a good job. Take the items that are successful and combine them with that which makes your business unique. You don’t have to reinvent the wheel entirely. If your business idea is novel, leverage the expertise of other entrepreneurs and business owners within the same genre as your offering. Getting out there and talking with people can be one of your greatest assets early on. Plus, you may generate customers in the process.
4. Be creative: No matter what industry you’re in, don’t be stagnant. Stay ahead of the curve and constantly be on the cutting edge. Communicate with the youth to see what’s up and coming in terms of marketing and social networking. Don’t rest on your laurels, and make sure you’re on top of the next steps for your business.
5. Spend your funds wisely: Many small businesses make the mistake of spending too quickly. Either they spend what others have invested in their business, or they spend everything that comes in the door. That can be helpful in the initial growth stages, but it may not be the recipe for long-term success. Make sure to invest more heavily in areas in which you get a higher return, and take smart risks otherwise.
Deborah Sweeney is CEO of MyCorporation, an online business that simplifies the process of starting a business for entrepreneurs and start-ups by providing them with the tools and legal services they need for a reduced cost. Deborah is based in Calabasas, Calif. Her e-mail is DSweeney@mycorporation.com