Despite the problems the international financial crisis has caused many economies, it has also created opportunities. With jobs hard to find, many people have started their own business. Some adventurous young entrepreneurs have started up overseas, even venturing as far as Egypt.
Of course, starting a business isn’t something young people, or anyone for that matter, can do from one day to the next. They need guidance. Here are some basic finance tips for those just starting a business.
Creating and presenting your business plan
A solid business plan is vital. Investors base their investment decisions on it. They’ll want to know all the numbers: how much money it will cost to get your business off the ground and how much profit your business will make.
Make sure you understand your market.
Tell the bank about your company and products or service, but show too that you know how the sector works. Research your target market and competitors, and incorporate some of this research into your presentation.
Don’t forget that your business must have long-term financial viability. If a product is too unique, there may not be much demand. Meanwhile, selling seasonal products is risky, as you may go long spells without earning much profit.
Choosing insurance
Most businesses take out two main types of insurance policy: property insurance and liability insurance. Property insurance or commercial asset insurance will cover business assets, like your place of business, if there’s a fire or interruption to the business. Comprehensive policies cover additional risks that the average small business faces, such as vandalism or weather-induced damage, and liability if an employee suffers an accident at work.
Liability insurance covers legal costs you are liable for if an employee injures themselves in the workplace. There’s also product liability insurance. This covers you for legal costs that result from accidents or injuries your product causes. For instance, if you sell jam and a consumer catches food poisoning from it, the insurance would cover the legal costs.
Finding the funds
Friends and family are likely to be the first port of call when looking for investors. If you do your business banking with HSBC, you can also apply for a business loan, which will come with special — not to mention, favorable — terms and conditions.
You can also apply for government grants. Why not enter a business competition, too, in which you can win money for your business.
Setting up a business account
With a business account you can allocate money for partnerships, investments, and make mass payments. They’re particularly good for paying employees. You can also enjoy special terms and conditions on products such as credit cards and insurance.
Business accounts project greater credibility in the eyes of potential investors. You look more professional and they perceive you as being more capable of paying your dues.
When you start a business, you require certain basic indispensable tools. A well-devised business plan, a business account and funding will help your business get off to a good start, while insurance can protect you against circumstances that may harm your business.
See Also:
- Teaching Your Kids Money Management Skills
- How To Develop Winning Money Management Skills
- Money Management
Resources:
- Start Your Own Business, Fifth Edition: The Only Start-Up Book You’ll Ever Need
- The Toilet Paper Entrepreneur: The tell-it-like-it-is guide to cleaning up in business, even if you are at the end of your roll.
- The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
- The Accidental Entrepreneur: The 50 Things I Wish Someone Had Told Me About Starting a Business
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