Do you have a seriously exciting and disruptive idea? We hope so and certainly don't intend to dampen your enthusiasm. However, it can also pay to think about how your new business can be seriously sensible too.
Adopting a methodical approach behind the scenes will ensure you're blazing a trail on firm foundations. Consider the following sensible steps and you'll stand a better chance of not just making a big splash but sticking around for a while too:
Cash is king. Cash is king. Cash is king. We can't say it enough. Even if you're a tech start-up in a rush with a natural burn rate, you still need cash. You still need to make sure everything gets paid. The key is being organised. Get good accounting software and make sure everything is logged. That way you can see exactly what you've got in the bank, what is coming in and what is owed.
Tax is more boring than cashflow but it's at least as important. Before you start up you must understand what taxes you are liable to pay, what proportion of your gross profits will be drained by them and when you'll need to pay. You really don't want any nasty surprises just as you're about to truly take off or, even worse, when the tank is already dry. Get good advice up front and plan ahead.
Get everything in writing. When you partner with another company (to develop your website, supply you with goods, or to do your marketing, for example) create legally-binding contracts. A handshake won't cover it; the best-intended relationships break down and, when they do, recourse to the law is usually the next step.
There are about a million licenses that apply to different types of businesses (including licenses to show a film, licenses to sell alcohol, licenses to run a pleasure boat, licenses to play music - you get the picture). You may not need any licenses to do what you do, but it pays to check.
Insurance is one of the most sensible things you can buy - and some of it is compulsory. It ranges from public liability insurance to protect you if a client falls over in the office, to contents insurance which protects you if your stock is damaged. Talk to specialists to ensure you're covered and operating within the law.
We challenge any small business to get excited about H&S - it's bureaucratic and tiresome but you absolutely cannot ignore it. H&S is most likely to surround any premises you operate from or where employees work and customers visit. It pays to get your entire business process assessed, though. What is easy to overlook could wipe out your company in a second should an accident occur that could have been prevented.
Your technology represents the veins and arteries of your business. Make sure the network is strong enough to support everything that happens in your operation, plus gives you the option to take on new staff and expand your product portfolio. Think ahead for spikes in activity - there's nothing more frustrating than spending thousands on a marketing campaign than not being able to service the leads.
They might not be everyone's cup of tea right now, but your bank manager really should be your best friend. Chances are you'll need their support at some point and having established a healthy relationship with regular contact and transparent reporting will definitely help. Bank managers can also help your business far more than people tend to give credit for: they'll often be well-connected in the local business community and will be about to offer advice on anything from your business model to finding an accountant or lawyer.
Well perhaps not everything, but as much as you can. Try to resist taking on fixed costs wherever possible so your business can stay lean and agile. Consider sites such as Concept Cupboard, Elance and PeoplePerHour for finding freelancers and outsourcing projects. Look to partner when you can instead of building everything yourself.
Be lovely to have a nice, city centre office, swivel chair, glass desk and Apple everything, wouldn't it? Of course. But it'll also be nice having a business hit profitability as soon as possible too. For as long as you can, work from home. If you need to entertain clients, use business clubs or share workspaces. When you do need your own place, keep costs down. There's plenty of time for expensive offices once you're established.
Want more? For extra information on what you need to know before starting a business, click here.