What to Consider When Launching a Small Business
Do you want to learn more about what to consider when launching a small business? Tune in here to learn more.
(Video is 4 minutes. The full transcript is below.)
Full Transcript of video
1. Ensure You Have an Income Runway
As a businessowner myself, I can tell you that not having an income runway is sky diving without a parachute. And while entrepreneurship may bring you riches down the road, the early days often mean you’re dealing with no income for months or even years. So, you must get your cash in order.
A good step to take on this-write down your cash balance at the start when you plan to launch your business and set a timeframe or a runway. After that, determine what your initial monthly expenses may look like for both your business and your personal life. Think mortgage, food, electricity, kid’s school, technology, internet, services, etc.
The key is to get the total picture. And finally, determine your current cash balance at the end of your runway. This will help set the stage for how long you have before you either need to get investors or generate positive cash flow.
2. Get Your Business Plan or Idea in Order and Tested
After you have your idea on paper, it’s time to test the concept.
Generally, there is no hard and fast rule, but getting in front of 50 potential customers or clients can give you a signal to test any new business idea.
The best way to do this?
Aim to reach out to 100 to one 150 people to get 50 interviews.
Document the information and feedback you receive, and at the end of it you should have a good idea if your small business idea is viable.
3. Get Comfortable with a New Schedule
When it comes to entrepreneurship, not only will there be trade-offs with friends and family, but you will be pulled in numerous directions and have to wear multiple hats.
Accounting, sales, product, marketing, finance – in most small businesses, one or two people are doing these functions in the first three 3-18 months. And if you’re not careful, you will spend too much time working in the business rather than on the business.
Therefore, it’s critical to respect your time and your calendar. The easiest way to do this: Time blocking. Setting aside chunks of time through the day or week to tackle heavier tasks. There’s nothing quite like the experience and autonomy that comes with launching or being a part of a small business. But just like anything else in life, there will always be trade-offs, and being an entrepreneur is no different.
Speaking with trusted resources, like a financial advisor, CPA, attorney, or mastermind group, can help you think through and navigate the ins and outs of the start-up scene.
If you are interested in learning more about starting your own business, please reach out to us here at F5 Financial Planning. Thanks for joining us!
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