Recently updated on October 25th, 2022 at 11:01 am
When it comes to launching a business, there’s no one right path to assure success. A business is a complex and risky endeavor that will often have you put a lot on the line. But it can also be a very rewarding career path if you choose to pursue it and stick at it for as long as it remains profitable.
However, if you are just starting to get into the headspace of thinking about running your own business, there are a few things you’ll need to consider before committing to a business loan and launching your start-up idea.
In this article, we’ll cover our top 4 tips for launching your business in 2022. Let’s delve!
1. Consider Location Costs
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If you are starting a business that’ll need a physical storefront or some kind of commercial premises, then you’ll need to factor in the costs associated with your chosen location. Not just rent and bills, but how to reduce these costs as much as possible. This will allow you to expand your profit margins for the first few months as much as possible.
This is critical to getting your business in the green as quickly as you can, to start earning to grow, rather than earning to pay off loans.
Begin by assessing your business’s water usage and installing water-saving devices. Things like water-saving tap faucets, toilet tanks for bathroom facilities, and investing in efficient water-based appliances (for hospitality-based businesses) can save you hundreds initially. Also, consider switching to a business water retailer to get a great deal on things like fixed charges.
Electricity is another big monthly bill you can easily cut down on by using things like energy-saving light bulbs and having daily checks in place to ensure nothing is left on overnight.
As a rule of thumb, when taking on a new lease for a commercial property, always get independent contractors to perform audits of the establishment. It may cost money you don’t want to spend, but it can help you avoid regulation and compliance issues later on down the line. Audits can also catch potential issues with electrical wiring or plumbing that could cause long-term damage over time.
We’d always recommend getting an in-depth electrical audit and plumbing audit to be on the safe side.
2. Don’t Shy Away From Private Investors
It can be very tempting to take the bank’s money over a private investor, but choosing private investors can improve your overall ROI and give you more flexibility with your business (in terms of cash flow) than a bank can.
While you’ll likely need to give up a percentage of shares for this to happen, going into business with one or multiple investors is a great way to get additional financial support.
However, it is also a fantastic way to get business advice. Your business succeeding is in their best interests, as it will increase the value of their investment in your business.
It can be hard to secure good private investors, which is why a lot of new business owners will shy away from it, but it can often be the best course of action for injecting money into a new business.
Just be sure to always have your lawyer present to help with any negotiations. If not present, then your lawyer should always be in the loop with the particulars of the private investment deal you are going to make. They can help advise you on any legal implications of offering up shares and help advise you on courses of action to take.
3. Stay On Top Of Your Accounting
When starting a business, the accounting aspect of it can often trip new business owners up. It can be hard to know exactly what you need to keep, what you don’t need to keep, and even to find the time to do all your accounting on a daily (or weekly) basis.
But keeping a regular accounting schedule is critical to the continued success of any business. Consider using software such as QuickBooks, Sage, or Xero to make the process much easier instead of doing it all by hand.
Additionally, you could factor in accounting services from a local accountant or accounting agency to handle all this for you (including tax). If you aren’t too savvy on tax and accounting, then this is likely your best option.
4. Always Have A Cash Buffer
This may seem like an obvious piece of advice, but you’d be surprised how many people launch a business without a cash buffer in place. Sitting some money aside to use in emergencies can get your business out of tricky situations that could arise.
Sit anything from a few hundred to a few thousand aside in a separate bank account and leave it there. Don’t touch it for personal or for business use until you have no other option. Having such a safety net in place is great for your peace of mind too!
Launching a business is never easy, but we hope our tips will help you on your way. Stay dedicated, and don’t give up!