New Year’s resolutions take all sorts of different forms. Some people focus on diet and exercise, others on meditation or improving relationships. More entrepreneurially minded people may resolve to finally start their own business. If you are one of those people who will be launching their first business in the new year, this article contains some helpful tips on how to hit the ground running with your new startup.
Talk to prospective customers
Lots of them. People you know. Random strangers on the street. Anyone who will listen. The old Field of Dreams quote “if you build it, they will come,” applies only to movies. Basically, make sure that there are real people out there in the real world who will buy what you’re planning to build and sell. UNC Charlotte has a fantastic program with an intensive focus on customer discovery that provides structure and guidance.
Don’t sign any contracts before forming a company
You don’t need to form your company the moment you think of your great business idea, but you do need to make sure you have limited liability protection (e.g., by forming an LLC or corporation) before you start putting your Herbie Hancock on official contracts. So don’t go signing commercial leases or any other contracts (especially those with long-term or expensive obligations) in your personal name.
Develop a budget
This may seem obvious, but you need to do some simple financial modeling. Create a budget for how much it will cost you to launch the business. Think about one-time costs (e.g., paying a designer for your new company’s logo) as well as recurring monthly overhead costs (e.g., rent/utilities and insurance). Consider how long it will be until you bring in your first dollar of revenue. Depending on your business, it could be immediately, six months away, or longer. For example, if you’re launching a consulting business, you can make your first dollar immediately. Whereas if you’re launching an apparel company, it may take quite some time to find the right manufacturer for that perfect luxury socks brand you’re creating.
Think if there is a way for you to test the market before quitting your full-time job,. Walking away from a steady paycheck and/or benefits may be the right call for you, but it’s certainly better if you’ve started bringing in revenue through your business before you take the plunge. You’ll likely be working nights and weekends and during your lunch break, but it’s worth it. Honestly, if you’re not up for burning the midnight oil, you’re not up for owning and operating your own business.
Talk to an attorney
At Spengler & Agans, we offer a variety of startup formation packages. Don’t hesitate to reach out if you are ready to follow through on your New Year’s resolution of launching a business!