When people are entering a business, they are looking for some sort of freedom. Sometimes that freedom is financial. They may want more money or they want more time because of health, family, personal or other reasons to do whatever they want to do. They have the technical skills for their business. For example, a hairdresser, nail technician, jewelry maker, service provider, or analyst will have the technical skills necessary for their business. However, when it comes to starting your business, you need to have the core concepts. Here are three questions you need to ask yourself whether you are providing goods or services:
1. Do I have an end in mind?
Before you tell me who you service or your business name, you need to tell me when you plan on getting out of the game because it will direct your next steps. If your end goal is to sell to Target or Walmart or another big company or go into e-commerce, that will determine the next steps. That will determine the type of entity you establish, the way you structure your business, the common contracts that you will need. All of these need to be in place before you start marketing your goods or services because you can be subjecting yourself to some type of liability.
2. Do I have my personal business totally separated?
This is SO, SO important. When people are starting out, they do not want to make that investment. They do not want to spend that money especially if they only have one client or if they are only making a $5, $10, or even $100. However, the reason you need to do this is because you are comingling your personal assets and business assets. For example, even if you only made $5, that does not matter for the sake of a lawsuit. Your personal assets can and will be tied up if you do not separate them from your business assets. This is why it is so important to separate your personal assets from your business assets. Do not comingle. SEPARATE. Keep it separated. Establish an entity. Establish a banking system that is separate from your personal assets.
3. Do you have the systems and structues in place to sustain your business?
While you are marketing to attract customers, are you truly targeting the right people? Can you handle the influx of customers? Do you have systems in place? Would you be able to deliver all those goods? Can you service all those people? Do you have the proper contracts? It is so important. You have to have systems and structures in place to sustain it. Having a business and website is good but the system and structures is the bread and butter to make it run smoothly.
These are some common mistakes that I see business owners make.