3 Business Issues Every Start-Up Should Consider
When entrepreneurs start a new business they are usually in love with their idea.
They had that eureka moment combined with passion that led them to risk everything and start a new venture.
It's exciting, but there are risks involved.
First time business owners that are not well prepared and don't build a thorough business plan normally overlook 3 very important aspects of their business.
These issues are taken for granted as they are not directly related to the core product being sold.
1 - Taxes We all heard that taxes and death are part of life and we can't avoid them.
And that's true.
Before starting any business you should know exactly how much tax you have to pay.
Tax payments can force a business to lose money depending on the product category and the overall margin.
You should consult with a specialized accountant before getting into business.
Many people avoid this step as they think this is unnecessary and incurs into extra costs.
You should pay your advisors well as they can guide you to success and help you to avoid costly mistakes.
You also discover if your type of business can get tax benefits and deductions.
Just by registering the business in a different category can improve your financial situation.
This is not cheating just planning in advance and involves product choice decisions.
2 - Legal Issues If you are not a lawyer you probably freeze when you look at contracts.
They guarantee your rights and obligations.
You should read and understand them as they affect your business directly.
Every detail is important.
For example, if you buy a Franchise you can find in the contract agreement with the franchisor the fess you have to pay for advertising and how much money you have to pay monthly to the franchisor.
This is a simple example but knowing all the details helps you create a clear picture of expected profits and losses of your business.
Again, hiring a specialized advisor in this area is fundamental.
Don't try to cut costs unnecessarily with legal fees.
3 - Overall Costs We always underestimate business costs.
We dream about the big profits and hope that every other aspect of the business will run smoothly.
Unfortunately costs are part of running a business and having a complete knowledge of all possible costs involved is essential.
Before starting your business you need to do a thorough research on all possible costs, the obvious ones and the not so obvious as well.
Do a due diligence talking with suppliers, business partners and researching over the internet.
Items that normally can surprise you on costs are transport, inventory maintenance and employees.
Include all of them in your business plan and when your business starts, track all expenditures.
Statistics say that 80% of businesses fail in their first few years.
Main reasons are lack of planning and poor control when everything is up and running.
Take control of costs, legal issues and taxes and you'll see your business dreams come true.
They had that eureka moment combined with passion that led them to risk everything and start a new venture.
It's exciting, but there are risks involved.
First time business owners that are not well prepared and don't build a thorough business plan normally overlook 3 very important aspects of their business.
These issues are taken for granted as they are not directly related to the core product being sold.
1 - Taxes We all heard that taxes and death are part of life and we can't avoid them.
And that's true.
Before starting any business you should know exactly how much tax you have to pay.
Tax payments can force a business to lose money depending on the product category and the overall margin.
You should consult with a specialized accountant before getting into business.
Many people avoid this step as they think this is unnecessary and incurs into extra costs.
You should pay your advisors well as they can guide you to success and help you to avoid costly mistakes.
You also discover if your type of business can get tax benefits and deductions.
Just by registering the business in a different category can improve your financial situation.
This is not cheating just planning in advance and involves product choice decisions.
2 - Legal Issues If you are not a lawyer you probably freeze when you look at contracts.
They guarantee your rights and obligations.
You should read and understand them as they affect your business directly.
Every detail is important.
For example, if you buy a Franchise you can find in the contract agreement with the franchisor the fess you have to pay for advertising and how much money you have to pay monthly to the franchisor.
This is a simple example but knowing all the details helps you create a clear picture of expected profits and losses of your business.
Again, hiring a specialized advisor in this area is fundamental.
Don't try to cut costs unnecessarily with legal fees.
3 - Overall Costs We always underestimate business costs.
We dream about the big profits and hope that every other aspect of the business will run smoothly.
Unfortunately costs are part of running a business and having a complete knowledge of all possible costs involved is essential.
Before starting your business you need to do a thorough research on all possible costs, the obvious ones and the not so obvious as well.
Do a due diligence talking with suppliers, business partners and researching over the internet.
Items that normally can surprise you on costs are transport, inventory maintenance and employees.
Include all of them in your business plan and when your business starts, track all expenditures.
Statistics say that 80% of businesses fail in their first few years.
Main reasons are lack of planning and poor control when everything is up and running.
Take control of costs, legal issues and taxes and you'll see your business dreams come true.
Source...