5 Tips for Starting a Business in 2020
The events of 2020 have a lot of people rethinking their career choices. For some, this experience will be the push they need to pursue their entrepreneurship goals. Whenever a new problem or change arises, there’s a need for a solution. This is where the opportunity lies.
Here are five tips for starting a business in 2020 to set you up on the right foot.
Choose the Right Business Structure
Choosing the right business structure is essential for protecting your assets. Choosing your approach will relate to the type of business you offer, the financial risks involved, and how you plan to scale over time. The main business structures include:
- Sole Proprietorships
- Limited Liability Corporations (LLC)
- S Corporations
You can read a detailed explanation of the pros and cons of each legal structure at Salesforce.com. Pay close attention to the taxation requirements when choosing a legal structure for your business.
Create a Detailed Business Plan
Creating a business plan isn’t always required, but it is highly recommended. This document will outline important details about the competition, your marketing strategy, and the financial requirements for getting started. If you require a loan or investor, a business plan with a functional template could be mandatory.
Working through a business plan is a valuable exercise. It allows you to highlight things you hadn’t considered before and provides a structured framework for researching the market place. While it may seem like a time-consuming endeavor, it could save you time and money down the road.
Put a Money Management System in Place
In 2020, more entrepreneurs are looking beyond the traditional business models to put a money management system in place. This transition is largely due to the interconnectivity between business and personal finances. By putting a money management system in place, you can focus on profits over revenue and pay yourself a salary.
Take some time to highlight the various costs associated with your business. Consider how you’ll divide money when it comes into your business to ensure all the bills are paid and that you have enough cash flow to get you through. Tracking your expenses and keeping your accounting up to date is a must for success in 2020 and the future.
Think Remote Thoughts
Remote work was gaining steam before 2020 changed everything. Now, it’s expected that many traditional businesses will continue with remote work in the aftermath of the global pandemic. There are many benefits to working remotely, from safe social distancing practices to lower overhead costs. It also allows businesses to draw from a global talent pool.
When implementing your business, think of how you can leverage remote work to get things done. If you’re considering starting an in-person business, you’ll need to adapt to the way the world is going. As a new business owner, you’ll have the advantage of existing only in the post-pandemic world, rather than changing something that’s already established.
Start Small and Scale Up
One of the most damaging errors a new business owner can make is over-investing. In other words, spending more than you can support and growing your business before the customers are there. For example, if you were starting an off-road tour business, buying one or two off-road vehicles makes more sense than buying a large fleet. As demand increases, you can add more vehicles to accommodate so that the bills are paid from the beginning.
Consider how you can start small and grow your business over time. Draft out trigger points at which you expect to reach your capacity and need to scale. Creating a scaling plan will help you set milestones and offer consistent service as the business grows.
Every negative event can be turned into an opportunity for personal and professional growth. Keep these tips in mind if you decide that starting a business is the right career move for you in 2020.