Thinking About Starting a Business?

Tim Borody, CPA and Life Centered Planner at Advice First Financial, shares his thoughts on this topic in this video.

Some would-be entrepreneurs look at a displaced business landscape and see trouble. Others see an opportunity: the chance to become owner and CEO of the company they’ve always wanted to start.

If you think that 2021 could be the moment for your dream company to open its doors, these four steps will help you refine your vision and prepare for a successful launch.

1.Reevaluate your business plan.

Your business plan has probably gone through months if not years of revisions. Now, it's time to do a couple more. Examine your new company from every possible angle and answer some important questions, such as:

• How will your company be structured?

• What's your projected cash flow?

• What's your potential market size?

• Who are your ideal customers? How do you plan on marketing to them?

• What problems does your product or service solve?

• Who is your biggest competitor?

• What are your company's values?

• Where do you want your company to be in one year? Three years? Five?

• What could go right?

• What could go wrong?

• Are any parts of this plan out of date, especially post-pandemic?

You might feel like you've answered these questions hundreds of times, both on paper and in your head. Answer them again. Specificity is an important key to turning your dream company into a real one.

2.Assess your personal and professional finances.

Your business plan should have detailed financials, including budgets and cash flow projections. Before you start approaching banks or other potential investors, consider if your updated answers to the questions in step one change your numbers. Have you set achievable goals for the first year that will also build towards bigger long-term goals? Are there any areas where you could economize?

As an entrepreneur, many questions about your new business will be closely tied to your personal finances as well. If you're going all-in on this new company, your household budget might need some tightening or an extra cushion while you work towards profitability. Depending on your specific plan, you also might need to investigate new health care options for you and your family, such as purchasing insurance off your state's marketplace.

3.Put the best people around you.

Many first-time entrepreneurs join their friends and family for an "all hands on deck" new business launch. However, successful entrepreneurs learn quickly that they can't do everything by themselves, and that talent is one budget item you can’t scrimp on.

If your business plan doesn't have an adequate budget for staff, then you're not building a real business. On the ground floor, you need people who can handle basic service tasks while you, in your role as CEO, focus on the health of the overall business. Further up the ladder, you need leaders and executives who can bolster your strengths, fill in your weaknesses, and help you keep moving the company towards your overall vision of success.

You might not have the need or the resources to fill out a c-suite on opening day. But a CEO who’s also the accountant, sales manager, and digital marketer will never be an effective CEO. Make sure you have the help you need on day one and a road map for hiring more top talent in the near future.

4.Get a fresh perspective.

Identifying and mitigating blind spots can be one of the biggest challenges for an aspiring CEO. Show your updated business plan to people you trust: your spouse, a colleague at work, a friend who made their own entrepreneurial leap, a mentor, or a business coach. Welcome their criticisms. Follow their feedback to better ideas that will improve your plan and strengthen your new company’s potential future.

We hope you’ll consider including us in your pre-launch brain trust as well. We can put you in touch with pros who can help you put the finishing touches on your business plan. And we can discuss how your personal financial plan will support you and your family as you prepare to move into the big chair – even if that chair is in your spare bedroom for now.