When starting a business a lot of new entrepreneurs are focusing only on their revenue or what their business will bring in first. If this is your decision then congratulations! You are making the correct decision.
This decision is one that we often make when we first start out, and it is important for your business to be built around the financial model that you will have until you can afford to make a change.
Build Your Customer Base
If you are not expecting to bring in a lot of revenue right away, then you should focus more of your energy on building and maintaining your customer base. As time goes on, your existing customer base should begin to create an expectation that your business should begin to bring in regular revenue.
However, this should not be the expectation that you place around your business. Building and maintaining a large customer base will take time, not just weeks or months. So when you do begin to bring in regular revenue, you should be focused on expenses.
You may be saying to yourself “Well if I’m not bringing in regular revenue right away, how can I justify spending the initial money on the business?”
Well the answer is that you should be focused on regular revenue by taking a few steps in that direction. The first step is to write down what your expenses should be for the first few months of business.
Be as precise as possible in the preparation of this list, because the more specific you are in your planning, the better the end result will be. Also the more specific you are, the more prepared you will be for expenses that you may not see coming.
Next, use a 10 year forward look to your financial plan.
What will your income look like in the next 10 years?
What expenses should you be making?
How much revenue should you be bringing in?
How much should your balance sheet reflect?
Where should you be pulling in revenue?
How should you grow your business?
These are the types of questions you should ask yourself, but remember you have to start out thinking these things. Remember you should also be doing these things.
Revenue Related Expenses
The next step is to look at what monthly expenses are associated with the revenue you are generating.
Which expenses should you reduce?
What additional revenue should you be generating each month?
How should you grow your business?
These are the kinds of questions you should be asking yourself.
Next, you need to look at your income flow and think how should you be spending your income.
What should you buy?
How should you sell?
What new products should you promote?
How should you act in the marketplace?
These are the types of questions you should be asking yourself.
You need to make a few other decisions before getting started.
* Do you want to open a store or do you want to open a website? Both can be successful. It really comes down to your comfort zone.
In either case it is important to do some market research to see what the public wants and you need to be able to cater to that. If you don’t do this first you are setting yourself up to fail.
* Do you want to operate your business full time or part time? This is a big one.
It really comes down to how much time you can dedicate to your business. If you decide to operate your business full time you need to plan accordingly. Your income will suffer if you decide to spend 9 to 5 every day.
* Do you want to operate a franchise or do you want to do it on your own? Franchising can give you a solid income if you do it right.
You are tied to a certain amount of stores. You get to use a certain amount of the property that the franchiser buys for you.
Plus you are also given a certain amount of the company’s products that it sells. If you decide to go this route be sure to research what the franchiser offers before you commit to it.
If you do your research correctly you should be able to open on the first of your choice. You should also have the money to pay some people as employees.
You should also have some money to invest in advertising. Be sure to research how to get started in this business.
You should also know what the requirements are for your state. Don’t just dive in blindly.
Take your time and research. There is a lot to think about when you decide to start a business.
You need to be able to plan ahead. You need to know what you want to offer and how you want to offer it.
The more you research the more you should plan. You also need to be able to deal with failure and setbacks.
With a business you need to be able to plan ahead. This is how you figure out what your goals are.
You also need to be able to take action to reach your goals. A business is not easy.
A business is not something you can do in a couple of hours. Your business will take time and dedication.
You should also have a business plan created that will guide you through the process of opening a business. Your business plan will help you to determine what your goals are and how you are going to reach them.
You should also be able to explain your plan to others so that they can support your efforts. Your goals should also include what you plan to do for customers so that they know what to expect from you.
Conclusion: Starting A Business
As you can see starting a business is not a simple process. If you are thinking about starting a business then you need to do your homework. It will be hard, but it will be worth it.
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