Important Things Entreprenuers Overlook When Setting Up Businesses

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There is undoubtedly a lot to think about when it comes to setting up a new business. There are definitely the more obvious aspects to consider, such as hiring employees, finding suitable premises, registering for taxes, etc. These are all common aspects that are part and parcel of setting up a business.

With nearly 5 million businesses on average starting each year, you’d think that all bases would be covered. The role would be to understand the importance of research and getting things right. However, with a high failure rate for small businesses, around 20% in the first year and 65% within the first 10 years, avoiding the fate some may have experienced before is vital to help you succeed.

This post will sidestep the obvious aspects of setting up and running a business and dive into the more often overlooked factors that people often don’t consider until they realize they overlooked them or didn’t even really think they should have given more thought to.

Company Structure

It’s imperative that you don’t skip this step, as it will impact your entire business journey. There are multiple different structures you can choose when setting up your business, and it’s vital you understand what each one means and offers. Whether you want to be an S-Corp, LLC, or C-Corp, each one will have its own advantages, disadvantages, and limitations that will dictate how you perform and your insurance and taxes, too.

You need to implement an investment strategy to find the right structure for your new venture. Then, take it to a business lawyer who is well-versed in company formation so they can advise you. Don’t just rush into picking what you think will fit you now; you need to think long-term, use your goals and objectives for the company, and get expert advice before making your final decision about choosing the proper company structure.

IP Protection

IP is your intellectual property and, for any business owner, an area they perceive to be as important as other aspects. However, all of your intellectual property should be registered at the onset of the formation of the company, not just when you are trading.

This means protecting your business name, branding, taglines, logos, and product design details that are synonymous with you as soon as possible to avoid them or producing something too similar to help ride your coattails or misleading consumers. This is especially important for tech companies’ patents, which need to be filed early and prior to product launch so you are covered. 

On the flip side, you need to make sure anything you create doesn’t infringe on other companies’ IP protection, and you need to run through designs to ensure that nothing can be construed as you breaking IP laws meaning you fall foul of the regulations before you ever get up and running. Not only will it result in high fines, but you will also need to rethink everything you have used to make it more unique. If you’re already trading and using protected material, this can be a costly error on your part.

Security

How are you going to secure your business? Security is about more than putting all your locks on doors and going home for the day. These days, you need to consider physical and digital security protection to ensure that your business is safe at all times.

Physical Security Threats

Your physical security threats include theft and employee and customer theft; environmental threats that damage the building and operations or damage to all machinery or equipment you use; and vandalism, arson, etc., that can impact your ability to operate the business from a tangible source. This report on physical security alerts you to the state of security and the measures you can employ to help you boost your physical security, such as CCTV, ANPR software, video cameras, and more.

Digital Security Threats

Digital security threats are those attacks that access and obtain your digital data and information due to it not being secure enough. At the creation stage of your business, you need to understand how you will be accessing technology and what you will be using it for. Then, you need to appreciate and understand the way this can be a risk and what measures you need to have in place to boost cyber security and support and protect the company and client information. From staff training, if applicable, to robust passwords, firewalls, anti-virus software, understanding signs of scams and threats, and more. The more you know, the more you can put in place to protect the company and those you do business with.

Financial Strategy

A solid financial strategy is necessary for most businesses, especially when it comes to getting off the ground. By determining the right strategy before seeking funding, you can understand what you’ll need, when you’ll need it, and whether you can secure the appropriate funding. It’s crucial to weigh the benefits and risks of different financial strategies before committing, ensuring you feel secure and confident in your financial plan.

While there are different financial strategies to choose from, it’s important to understand what they mean to you and your business before you sign on the dotted line.

One good example is obtaining VC funding. VC funding is venture capitalist funding, and for many people, it’s often seen as the holy grail of funding. You’re guaranteed to be successful if you get VC funding. And while this can be massively beneficial, its drawback is that it might not suit everyone. For example, VC funding means that multiple entities own the business with you, and they have an influence on the direction of the company and the pace at which you operate moving forward. These ideas and needs might not align with your own. While the funding will be amazing for the company, it might not be right for where you are right now or how you see the company developing.

Marketing

The absence of marketing for any business typically spells the beginning of the end. Because without marketing, how will you get the workout? Word of mouth isn’t always viable in this day and age, and while it once was for some select lucky few, it can be highly beneficial and effective; for the majority of people, a robust and comprehensive marketing strategy is required to photo you get the word out. For those on a shoestring budget, setting up social media accounts and a website and marketing yourself way can be enough for now. Tools like Google My Business can be beneficial and free, too. But if you need to create mass visibility and buzz for your new business or a product launch, then you need to be thinking about marketing as soon as you start drawing up plans. Comprehensive marketing needs to be employed as soon as possible to help create visibility surrounding what you do and what your business is before you’re even live to the public.

Take the time to research your audience and your core market, and then use marketing experts to help you uncover the best marketing approaches to reach them and get the word out.  You generally have a couple of options when it comes to marketing, you could work with a marketing agency or you could hire an in-house marketing team. There are pros and cons to these, you could also do it yourself through the use of a marketing platform such as Vibe marketing. If you opt for a marketing agency then they may make use of a marketing platform to help you match your target audience. 

Your Commitment

It can be all too easy to get lost in the excitement of setting up a new business and looking at what it’s going to do for you in the immediate future. But you need to stop and assess what your long-term goals and plans are. What commitment can you afford to make now, in 12 months, 5 years, or 10 years down the line? Do you have goals? Are you planning on building and then selling up once the company is successful, or can you commit to this for a lifetime?

The reason is that people change, the market changes, and consumer demand changes, and you need to understand if you’ll have the time and energy to see it through or if you have a cut-off point where enough will be enough, and you need to step back. So, while it might seem counterintuitive to be looking at exit options before you even get up and running, it can be wise to have a loose plan in place that you can refer back to help you understand what needs to occur for your exit to become a reality when the time arrives. 

Success doesn’t come overnight; as Jeff Bezos once said, overnight success takes 10 years. So, make your plans with the long game in mind to make the right decisions.

Setting up a new business requires you to be on the ball regarding multiple different aspects, so it’s not hard to see how some parts of operations can get overlooked. However, overlooking the points mentioned in this post can have catastrophic effects and leave you facing serious issues that will only make life more complicated. By factoring this in before becoming operational so you can get the right tools in place, the right strategy, and so on., you can limit errors and ensure you start off on the right foot with everything you need.