5 Things you need to know before starting your own business

There’s no dearth of start-ups being founded every day. And there are good reasons for that. The sense of accomplishment, being your own boss, flexible hours and potential for higher incomes are big draws. It is not for the faint-hearted though. Entrepreneurs need to have a handle on all the key features of running a business. Aspects like marketing, finance and of course production are vital in building a successful business. 

Benefits of running a business

History is littered with stories of people who were able to go from rags to riches because of successful businesses. This in itself indicates the potential benefit of starting a business. You can run it in the manner you believe is best suited for success. In a big, thriving economy, with endless demand for products and services, it is possible.

There’s no denying that it could take long hours and dedication at the start at least. But it can give you the flexibility to define your own hours. There’s also a sense of accomplishment at starting up your own business, whether it’s innovating a new product or entering a completely new market for you. 

5 Key features of a business

For a business to do well, however, an entrepreneur needs knowledge of a number of different features. Five key features are as follows:

  1. Starting up right: To start with, a business name that speaks to the customers about its products and services can be effective. The legal structure also needs to be defined. 
  2. Marketing and sales: Market knowledge is key to reaching customers. As is conveying the message attractively that can draw customers to companies. This goes for whether it is general marketing or through one-on-one sales pitches. 
  3. Product development: A good product or service that really meets customers’ needs can have the potential to succeed. Along with the right marketing and sales efforts, it can be the difference between whether a company thrives or not. 
  4. Contingency planning: unexpected challenges can arise in any business. A business needs to prepare for them by ensuring that it has enough resources to keep going even when times get tough.
  5. Funding and finance: Finance is the lifeblood of a business. Funding is available through private investors as well as public markets. However, it is essential to figure out which funding source is the best for your business. Once a business is up and running, it’s also essential to maintain proper accounts to know where the business stands. 

Managing finances well

Financial accounts can be helpful in determining how much profit and cash a company has. It can also determine key expenses like office charges, wages, and taxes. Taxes in particular can get complex. Consider the example of taxes for personnel. There’s a difference between the salary paid by a business to an employee and the charges of a contractor. 

They are also treated differently for tax purposes. While an employee receives a W-2 form that shows the income earned and the taxes paid during the period of employment. The contractor, however, receives a 1099 form from you if your business has paid them over $600 in a year. This can get complicated, but there’s help available in the form of online resources. 

Like Intuit QuickBooks, which offers tax forms for both the 1099 NEC and MISC forms. The NEC form is paid to all contractors other than lawyers, while the MISC form is specifically for attorneys. Plenty of other resources save both time and money, including accounting software’s available today. 

The takeaway

Getting a fix on finance is one of the key ways a business can try and ensure success. It can go a long way in ensuring that funds are available for sales and marketing, product development and even for contingency situations. For an entrepreneur who wants to be their own boss, have flexible schedules, and achieve their own personal purpose, good finances are critical. 

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