Congratulations on the decision to start a business. This is the first step toward achieving your goals and dreams. Starting a business is exciting, fun, hard, and scary – ALL at the same time. It does not have to be expensive, but it needs to be properly cash flowed on the front end. Several businesses (even companies that have been around for 80 years) fail to grow and succeed because of cash flow problems. BUT I am putting the cart before the horse. Let’s get you started on the right foot.
Where are you going? Before you do anything else, write down on paper with a pen, I am going old school, what you want your business to achieve. This becomes the beginning roadmap and business plan for your business. Depending on where you want your business to go and how you plan to get there, will determine several factors: business structure, partners, tax classification, exit strategy, retirement, insurance, earned verse passive income, cash flow management – just to name a few. Example: I want a business that will generate $120,000 in net positive cash flow at the end of year 3. The more specific you are, the better.
Once you have written where you want your business to take you, write how you will get there. The business will generate $30,000 in positive cash flow in the first year by generating $100,000 in sales. Again, be more specific. The more specific you are, the more we can help you structure and strategize for your success. Without a business plan, you have chosen to take your car on the interstate and start driving, with no destination or goal in sight.
Although the above is not a formal business plan, and I encourage you to write one, if you have not done it already, and we can help. But the above questions are vital to you understanding why you have chosen to become an entrepreneur and what your rewards are going to be.