A fundamental truth about any construction is that it’ll have a better chance at lasting if it’s built on bedrock rather than sand. The same idea applies to any business — it has to have a solid foundation in order to survive. To make sure this is the case with your business, you have four pillars to strengthen right at the very start of building your business.
1. The Product
The product is an important cornerstone you have to start with in your business foundation. Without it, there really is no business to talk about.
Figure out the ‘what,’ ‘who,’ and ‘how.’ What product can you offer, and how will it stand out? Who are the people you think will be willing to pay for it? How can you effectively sell it to them? Answering these questions can build a strong pillar out of your product. Although it might seem simple, the whole process of coming up with a good product will take time and effort before you can reach the point of confidence to launch it.
If you are starting from scratch, think of something simple that you can create either on your own or with a very small team. There are so many “handmade” business ideas you can start from home, such as t-shirt design, studio photography, or e-book writing.
2. The Paperwork
Once you have a product, the next pillar for a solid business foundation involves formalizing and legalizing your business. The actual paperwork you’ll be required to do will depend on the type of business you’ll be setting up.
Sole proprietorships, for instance, don’t have a separate legal entity of their own, so you won’t need to file any forms or documents to create the business itself — you’ll just need to apply for tax identification numbers and permits depending on what you’re selling. If you want to make your business more official, there are other business structures you can apply for.
Registering a limited liability company involves submitting documents like Articles of Organization and an Operating Agreement. Though there are extra steps to doing this, it can help ensure your business foundation in the long run. This is because it provides personal liability protection, the ability to avoid double taxation, and a more flexible management structure.
For partnerships, there are no documents to file to begin its legal existence. However, there are certain documents needed to finalize the formation process, such as a partnership agreement. And with corporations, you need to file formal paperwork, usually called “articles of incorporation,” and pay filing fees depending on the location where you incorporate.
3. The Payments
Once you have a business structure, you’ll need to make payments for startup costs, which require careful planning and meticulous accounting, especially in the early stages.
Equipment, incorporation fees, insurance, taxes, and payroll are just some of the overhead expenses you’ll need to pay for initially. However, startup costs still vary based on business type and industry — an expense for one company may not apply to another. Maximize whatever capital you initially have by setting the right payment priorities.
4. The People
When you start executing your idea, you’ll need people to help you build your business and get your product into the hands of paying customers. These people will be vital for the future success of your business.
For many new business owners, you’ll need to find the right talent your company needs at the moment. You don’t have to fill every seat in your company right away. Prioritize those you think will play the most important and urgent roles. Make sure their skill sets are complementary and not redundant.
To ensure you have a strong founding team that works harmoniously, you need to become an effective leader to keep them moving as the business grows. You will be the one to give them purpose and encouragement; listen to them and understand their concerns; welcomes necessary changes; supports their growth and development, and appreciates and recognizes their efforts that contribute to the success of your business.