If you don’t have a perfect credit store or a huge amount of savings, you might think that entrepreneurship is out of your reach. Think again. There are low-risk paths you can take to start a business that don’t require taking a big financial gamble. All it takes is careful planning and preparation.
Glamour Treat provides budding business owners like yourself with the knowledge they need to succeed. This guide lays out a low-risk path towards becoming an entrepreneur.
Write a comprehensive business plan to minimize risks
You don’t want to throw away your money on a business model that’s doomed to fail. Write a detailed business plan to ensure you have a viable concept. HubSpot provides business plan templates that cover the key points, like a product and service description, industry analysis, marketing plan, and financial projections.
A competitor analysis is another critical part of any business development plan. By checking out the competition in your field, you can determine whether there is room in the market for your business idea. According to Buffer, you can also use this data to finetune your unique value proposition, which will make your company stand out from the crowd.
Formally register your business as a legal entity
Once you have your business concept down on paper, you can formally register your business as a legal entity, such as a limited liability company, LLC. The business is registered through your state. Different states have different rules and paperwork for this process, so check your local guidelines before going ahead.
You might be thinking, “I registered my LLC, now what?” You’ll now enjoy many benefits. For example, your personal liability is protected in case your business gets into legal difficulties. Further, it will be easier to separate your personal and business finances, which simplifies future bookkeeping and tax filing.
Calculate your startup costs and look for low-risk funding opportunities
You’ll likely have to pay a small fee to register your LLC—one of the many startup costs you have to consider when founding a business. Before you go any further, calculate other expenses you will have to cover. RingCentral provides an overview of possible costs, like website design, commercial rent, and equipment and employees.
Once you’ve tallied up your startup expenses, look for low-risk ways to get the capital you need. If you don’t have a great credit score because of previous financial troubles, a traditional bank loan may be hard to come by. Liquid Capital Corp. has a primer to alternative types of business funding such as peer-to-peer lending and asset-based lending.
Look for ways to keep overhead costs low and streamline operations
You want to use your startup capital wisely. Keeping overhead costs low going forward will help. For example, instead of renting a commercial office space, you might consider starting your business out of your home. You can always upgrade to a larger commercial property later if you need a bigger space to accommodate a growing team.
Stampli has additional ideas for keeping costs low, such as outsourcing to freelancers instead of hiring full-time team members, going paperless, and automating basic tasks like social media marketing. Hiring a professional bookkeeper and tax advisor can also be useful, as these professionals can often pinpoint tax write-offs you can claim as deductions.
Starting a business doesn’t have to be a high-risk endeavor. This guide lays out a path towards low-risk, fiscally responsible business ownership. With this approach, you can start your entrepreneurial journey with less stress and more confidence.
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