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New startups can be adventurous and challenging with a great number of factors to consider. If you plan on growing your business and one day selling, it is critical that it is run right from the start and that it operates within the law. Basic steps that are involved in starting new businesses are not all that difficult to find. That being said, some tips are often overlooked. Let’s take a peek at a few of them now.
Please note that these tips are in no particular order.
Your data is probably your greatest asset as a startup. You have your clients’ information, company documents, inventory lists, book keeping documents and more. The thing is, you need to keep them protected. Your business is right in the crosshairs of things like exploits, vulnerabilities, ransomware, advanced threats, and even targeted attacks.
The only way to protect yourself from this is to have total network security. You need to have omniscient visibility into all of the traffic on your network and the activity in order to stay ahead of attacks that now bypass the traditional controls to exploit the vulnerabilities in the network and ultimately either steal or ransom intellectual property, communications, and sensitive data.
Do the Research
Just because you sell it or build it, that doesn’t mean that people will want to buy it. You really need to do your research to see what the potential market is in your area. Is there anyone who needs what you have to offer? Is the market saturated with something similar or is there space for it? Is your market national? Global? Or only local? Is it a niche market? Have you defined your target demographic? All of these questions need to be answered. Too many startups have failed because the entrepreneurs behind them didn’t have all the answers before they got started.
Yes, it can be exhilarating to launch your own business. Many people will keep their “day jobs” while getting their startup off the ground. There are pros and cons to this – as with everything. How do you know when to start dealing with your startup on a full-time basis? If your workload reaches a tipping point, this is probably indicative that you need to be working with your startup full time. Losing focus is also an indicator of this. The main idea here is that if you don’t focus on your startup, how can you expect anyone else to?
Have you decided if you are building this business to be a lifestyle business or if you are just trying to get some outside capital. This is because things that you might consider doing for yourself, you wouldn’t entertain if you are doing it for outside capital. Having outside investors means that you will more than likely need to grow at a faster pace. You will also need to have a clear vision to an exit for their investment after a certain period of time. You, on your own though, you might be fine with having a smaller revenue stream as long as it gives you the lifestyle you desire while not having to deal with outside investors.
Make sure that you keep your personal and businesses expenses separate. There is a range of expenses that will meet GAAP (generally acceptable accounting principle) standards and it is entirely legitimate to be using business monies to pay for them. However, if you use your business funds for personal use, you can get in serious trouble with the IRS while also exposing yourself to liability. If you have paid for personal expenses using business money, it will be hard to separate them in the future if your company gets valued. The best way to avoid this is by keeping your personal expenses and business expenses separate from the beginning.
Also, make sure that you report all of your revenue. Don’t skim money off the top if you are doing business in cash. This can also get you in deep with the IRS while reducing the overall value of your business in the long run.