The checklist for a business startup is long and varied. There is a multitude of actions, processes and essentials to put in place to ensure long term success, writes Annette Densham.
As a business startup, there is so much going out (and not much coming in) in the early days that it is tempting to skip a few steps to save a few dollars. While you can get away with not forking out big bucks on Google Ads or a full-time copywriter, there are five key areas you definitely shouldn’t overlook. Skipping these five areas can put your business in a precarious financial and legal position.
Sonia Gibson from Accounting Heart said it’s important to determine the best business structure for the venture. It may feel as though you have to start with the end in mind as you set your direction based on your goals.
“Choosing the correct structure comes with a great deal of research, you must consider how the various structures will influence your tax contributions, your operational structure, your cash flow, and your ability to grow your business over time,” she said.
“You also need to plan your startup costs before you launch so that you’re equipped to kick off successfully. You’ll need money to fund both the startup costs of your business and to cover your living expenses through the startup phase.”
Meeting with an accountant to discover your tax obligations and to help you set your pricing intentions in line with your goals is also essential.
If you’re just getting started: How to turn your hobby into a side hustle
Lawyer Courtney Bowie has found many starting up a business put on the bottom of the to-list getting contracts. “Not because entrepreneurs don’t think they’re important – they know they are – but they’re often worried about the expense and stress of the process of working with a lawyer,” she said. She recommends finding a lawyer whose business values resonate and who works on fixed fees.
“The right firm will make you feel valued, empowered and in control,” Courtney said. “The heart-wrenching scenarios we’ve encountered where clients have come to us too late.”
Engaging a good lawyer will help a business avoid these scenarios.
- Not having an agreement between shareholders in a company, which later caused one shareholder to walk away from over 5 years of hard work with nothing.
- No agreement as to the use of copyright materials, which resulted in a significant settlement with the copyright owner and lots of money wasted on legal fees and time lost negotiating, not to mention the emotional toll
- A poorly worded contract resulting in a business owner having to issue numerous refunds to clients during a pandemic
- A failure to update terms of service as the business model evolved leading to insufficient protection against copycats competitors, leading to loss of business
And if you need any more convincing, who better to back this advice up than Cardi B.
Katriina Tahk CEO of A-HA – A Human Agency talks about how people often have this perception that HR involves a very highly paid HR manager and/or HR team. This isn’t always affordable, so they resort to doing it themselves. There are organisations that offer a virtual HR manager service businesses can access, when they need it.
“You save money in the long run because you avoid those issues with non-compliance, workplace behaviours and other areas that really require someone with sound legal knowledge,” Katriina said.
“I’ve seen companies who have, from the beginning, asked themselves “what do we want to be known for?” Consider not only the customer experience but the employee experience too.”
Never too late to start something new: How boomers can supplement retirement income online
Monique Reibelt from Honan Insurance believes investing in insurance and legal representation is vital when starting a business. “A business is most vulnerable in its infancy, operating with limited resources and large financial risk,” she said. “Adequate advice and protection could be the difference between a business being financially stable or failing. In the event of an incident, you or your business could become legally liable for personal injury, property damage and/or financial loss.”
WATCH: What sort of cover should you have to protect your wealth and life? Claire Mackay from Quantum Financial talks us through it.
Monique said when there are limited funds to fall back, it is a good idea for directors and officers speak to experienced professionals to get the best and most affordable coverage.
The truth is many people do muddle their way through the business startup phase, but true success happens when entrepreneurs realise that they don’t know what they don’t know. The business world’s secrets to success are contained in a proverbial treasure chest. Unless you open it, you’ll never know how many tools and essential bits of knowledge you’re missing out on.
5. Marketing and Branding
Branding specialist Karen Moloney said branding is about so much more than a logo and business card.
“You started your business because you wanted to do something you are passionate about and that passion, your values and the kind of clients you want to attract should all be conveyed by your brand,” she said.
“Diving into your business without fully fleshing out your brand can lead to ineffective and expensive marketing, missed opportunities to improve client experience, hiring the wrong people, attracting the wrong clients and ultimately creating a business that will be hard to run and may not go the distance.”
This article originally appeared on Kochie’s Business Builders.