Some tips to limit the risks when starting a business
Starting a business is an exciting time but comes with a lot of worries and mistakes. Here are some tips, exactly 6, that will help you to be better prepared and to prevent common mistakes.
Here we write some tips to limit your risks when starting a business
1- BUILD A STRONG BUSINESS PLAN
A good starting a business plan will allow you to better prepare the entire life cycle of your business in terms of its structure, management, and growth. This document is also intended to define the key elements of it.
It will be mandatory to convince investors or new customers as this will give them an overview of your company.
Do not use too detailed models but make your own business plan because this will force you to look at the reality of the market, the competition, the numbers in a real and unfiltered way.
Underestimate cash inflows and sales, overestimate payment delays, production problems and bad payers and most importantly, consider that you will work only 6 hours a day as the early energy should not be considered habitual.
You may also like to read: 10 essential steps to open a childcare business at home
2- DO NOT UNDERESTIMATE THE HUMAN RESOURCES
Who says business creation says hiring your first employees and/or starting a business partnership relationship. It is imperative to know your needs and define the type of profile you are looking for. In addition, do not hesitate to call on your network. It is sometimes difficult to find good people. Talk to those around you, it can sometimes facilitate good meetings and you avoid a bill too salty headhunter.
Three important elements to note:
- Determine the number of employees/executives at a minimum to limit your expenses if you have no income.
- Pay attention to the desired profile for each of your positions. Study CV well and ensure a creative, independent and flexible personality. A person will sometimes have to manage several fields of activity or work in a sector that is unfamiliar to him. You can not constantly hold their hand.
- Contact with your team is essential, a daily appointment (live or via a Skype App type) to make a point with your team is essential. Make sure you always give your teams 15 minutes a day to take stock. In the same frame, make sure to make a weekly appointment with each of your employees to see the evolution of their work as well as their well-being in their position/company. It’s better to be proactive than reactive. This will save you a lot of time in the long run, not to mention the fact that your team will appreciate this attention.
3- PREPARING FOR UNPAID BILLS
We always tend to think that all our customers will pay us on time and that the money will simply come back. This assumption will have a huge impact on the sustainability of your company and your cash flow. Indeed, it is not enough to sign contracts, but it is still necessary to enforce them and make sure to receive the money as agreed.
Some advice on this subject:
- Always expect to have at least the equivalent of 6 months of expenses (salaries, rent, inventory, marketing, RP etc.) on your account when you start your business.
- Be aware of your client’s payment Make sure to send the invoices at the right time and do not hesitate to relaunch your contact several times in case of unpaid. It happens too often that the payment is made at 3-4 months for lack of follow-up on your part and the lack of scruple of your client.
- In the financial part of your business plan, plan receipts at least 3
- Know in advance which payment issues are worth the time and the cost of legal proceedings. Know the latter (such as the notice of default, the summons, the order to pay, etc.) in procedure and in cost.
4- MAKE SURE YOU KNOW THE LAW AND MASTER YOUR CONTRACTS
Too often, some business leaders neglect proper control of laws or the re-reading of contracts.
Do you know everything that’s happening in your field of activity?
Some laws may affect you or create constraints for your customers and suppliers. When it comes to your contracts, it’s safer to hire a lawyer to review your contracts to make sure you’re protected from your suppliers or customers.
5- PROTECT YOUR BRAND
Once you’ve found a unique brand name that’s right for you, make sure it’s easy to say abroad if you want to export in the future.
The mark belongs to the first who deposits it. You will then have to make the deposit at the National Institute of Industrial Property (INPI). This deposit is valid for 10 years renewable indefinitely by the simple payment of the renewal fee.
It is also possible to make a trademark registration protecting your brand in all the countries of the European Union. This deposit can be made via the INPI or directly with the Office for the Registration of Trademarks and Designs of the European Union (OHIM).
6- TO BE WELL SURROUNDED AND PREPARE HIS FAMILY
Finally, it is obviously essential to be well surrounded. Do not hesitate to call on experts in your area of activity who will advise you when making important decisions. You do not always have all the answers to your questions and humility does not mean weakness.
If applicable, do not underestimate the impact that the starting a business will have on your family or couple. Your company will take a lot of time. And you have to make sure that everyone is ready to embark on this adventure. Legally it will also be better to study your matrimonial regime to protect you in case of divorce or death. It’s up to you to determine what will work for your couple. If business creation was done before or during the wedding.
Starting a business can seem stressful, but there are solutions to these obstacles. If you have a project you believe in, do not let it stop and do not hesitate to consult experts who will help you make the right choices or at least not go in the wrong direction.