When we're eager to spend money, sometimes we say it's ''burning a hole in our pocket.'' Well, the same principle is applicable for entrepreneurial ideas. There comes a point in every entrepreneur's journey when they have to turn a hypothetical plan into a real venture. And what better time to take the leap than the beginning of a fresh new year?
Of course, the only smart time to launch a business is well after you've planned for every possible outcome. For example, carrying a small business insurance policy helps protect your fledgling finances against liability lawsuits, property damage, and more. Putting safeguards into place before Day One boosts your chances at longevity—every business owner's dream!
How you view small business success rates depends on whether you see the glass as half-empty or half-full. According to the U.S. Small Business Administration, two-thirds of businesses with employees survive at least two years. The five-year survival rate is around half. Keeping in mind for every two endeavors that initially succeed, one won't. What can you do to boost your chances?
Here are some of the staples you'll need to launch a business in the new year and beyond.
A Real Business Plan
Writing down a few goals on a napkin at lunch doesn't count. In order to move full steam ahead, you need a guiding document outlining logistics and processes. Here's what your business plan should contain, according to one Forbes contributor and small-business expert:
- The fundamental nature of your business
- Where your company will be located
- Who will be running your organization
- When your business will operate
- How your company will turn a profit
- A one-page Executive Summary (including details like a name, competitor research, unique selling proposition, financial projections, and more)
A Sustainable Funding Model
It takes money to make money—or at least to start a business in the hopes of making money. Start-up companies can pursue a number of funding models, each with its own advantages and disadvantages. For example, some companies use outside investments from venture capitalists or angel investors to launch. Other leaders decide to bootstrap their own venture with the goal of keeping expenses and interest costs low.
How you choose to fund your endeavor depends on many things: its size, industry, business model, goals, estimated startup costs, and more. The need for stable, sustainable funding is a universal requirement for starting businesses of all shapes and sizes.
A Commercial Space
Finally, you'll need a commercial space to function as your headquarters. Some entrepreneurs choose to share a workspace with other companies, while some lease a private space. Yet other businesses get their start in a garage, home office, or basement.
But homeowners be warned: Your homeowners insurance does not necessarily cover your business operations and premises. At the least, you'll have to add a rider to your current policy. More likely, you'll need to take out small business insurance to protect yourself against damage and liability.
Wherever you set up shop, make sure your small business gets a solid start with the right insurance package. Explore your commercial policy options with CoverHound for free!