Starting a new business is one of the most exciting endeavors a person can take. As entrepreneur Scott Crockett, CEO of Everest Business Funding, explains, there’s a lot of behind-the-scenes work that’s necessary to launch a new business and make it successful long term.
No matter the type of business they’re starting, every entrepreneur should understand the fundamentals of starting a new business. Here are the basics that every entrepreneur should know.
#1. Have a Good Idea
Every venture starts with a great idea. Many people think they have to completely reinvent the wheel to be successful, but that’s not the case. In fact, many of the most successful businesses in history simply improved on an idea for a product or service that was already launched by someone else.
Once you have that good idea, do your own research to determine the potential needs for your product or service and its potential market. Host small focus groups of friends, family, and acquaintances first, and then branch out to “test” your business idea before it launches.
#2. Get Your Finances Straight
It takes money to make money. That’s a famous saying for good reason. Every business takes at least some money to get off the ground. Do you have an adequate amount to do so?
Many new business ventures that fail to do so because they aren’t adequately funded. It’s important to ensure you have enough startup capital to get your venture off the ground and serve as a cushion in case sales ever dip below what you expected.
Because of this, it’s important that your personal finances are in order, too. There may be times when you have to cut back on your paycheck — or forego one completely — for a while to sustain the business.
#3. Have a Solid Plan
If you want your business to be successful, you need to have a solid plan right from the start. It’s always advisable to have a full-blown, official business plan. Not only will this serve as a blueprint as you launch the business, but it’ll be an important document if you ever need to get outside funding or raise capital.
Your business plan will help guide every aspect of your business — from marketing to your path to profitability, to recruiting and hiring, to future opportunities and threats.
#4. Know the Legal Process
Every business needs to adhere to certain rules and regulations. At the very least, you’ll need to register your business and file for an EIN with the IRS.
Making a mistake at the time of business formation could set you up for major failure. As Scott Crockett explains, knowing all the legal aspects of starting a business is important.
Depending on what industry you’re in — and what state you’re launching the business — you may need special registrations, permits, and licenses. In addition, you’ll need to follow local and federal guidelines for payroll, insurance, and paying taxes.
About Scott Crockett
Scott Crockett is the founder and CEO of Everest Business Funding. He is a seasoned professional with 20 years of experience in the finance industry. Mr. Crockett’s track record includes raising more than $250 million in capital and creating thousands of jobs. Scott has founded, built, and managed several finance companies in the consumer and commercial finance sectors.