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Look Before You Leap: Advice for Prospective Entrepreneurs

If you’ve decided to make the jump into entrepreneurship, you’re probably trying to work out how and where to begin. After all, there’s a lot to consider: What technologies should you invest in? Should you set up an office space or work from home? How should you structure your new business, and how will you finance it? Getting set up can be a daunting task, but how you do it is vitally important. Many new businesses don’t make it past their first or second year, which shows the importance of beginning with a solid financial and operational foundation.  

Business Tech 

Your ability to compete may depend on your willingness to invest in responsive, agile, and scalable new technology. Whatever your business model looks like, you can count on needing reliable data security, particularly when you consider that many small companies are driven out of business by data breaches. If you’re launching a retail business, there’s no substitute for a point-of-sale system, one that can help control inventory and track your sales. And you can make updated and accurate costs-to-sales comparisons as often as you wish.

A cloud-based data storage and filing system keeps everything organized and adds another layer of data security. It’s a practical, affordable move that helps monetize your existing assets, focus on your core business, and keep vital information securely backed up and stored. If you’re not sold on the need for new business tech, bear in mind that much of your online competition is likely benefiting from that same technology. 

Business Model

Consider adding a dropshipping component to your business model. It’s a low-risk alternative for new business owners who are still experimenting. Dropshipping requires no (or minimal) overhead, and there’s no need for inventory until someone makes a purchase, so your operational costs remain low. Do plenty of research on different dropshipping ideas, such as books, jackets, watches, jewelry, umbrellas and perfume, whatever’s popular with your customer base. 

Business Structure

Your company’s business structure will probably be determined by size, product/service offerings, and the scope of your operation. A venture you can operate on your own may function best as a sole proprietorship, meaning your assets and liabilities won’t be separate from your personal assets and liabilities. If you’re going into business with colleagues or friends, a limited or limited liability partnership may be your best financial model, especially if you’re testing a business idea before venturing into more ambitious territory. 

Home or Office?

Technology not only makes you more versatile operationally, but it can also free you from the expense of a traditional office setup and associated overhead costs. Unless you require square footage for storage, inventory, or research, communications technology makes it easy to stay in contact with your customer base, partners, and employees from the comfort of your own home. 

A home office also means you’ll save money by not commuting and parking every day. And there are tax benefits, not to mention that you’ll benefit from spending more time at home with the family. A home office can even be a viable option if you have to host clients from time to time, though you’ll need office equipment and enough room to meet comfortably and productively (you can always go the virtual route and meet via Skype). 

Getting started as an entrepreneur requires more than a strong vision and plenty of drive. Weigh your need for business technologies against your financial resources. A small business loan, line of credit, invoice financing, or grant can get you started on the right foot, but remember to do plenty of research to find the right financing package for you.

Image courtesy of Pexels

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