Make Sure These 5 Financial Steps are Handled So You Can Start Your New Business Right Help protect yourself and your family by squaring away these issues before you open your doors.
By Entrepreneur Store Edited by Jason Fell
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There are a whole lot more than five items you need to check off your to-do list if you want a new business to succeed. There are more than 50. The list is probably closer to 500.
However, not all business prep is created equal. And when it comes to the cashflow keeping your doors open...well, special attention must be paid. There's no faster way to doom a new venture to failure than by mishandling the finances. There's also no easier way to plunge yourself and your family into a serious hole than to misplay this crucial step.
With that in mind, here are five money-related issues any new business owner must address to put their new enterprise on solid ground from Day 1.
1. That business plan is key.
It's 2021. If you don't already know the importance of finely outlining your entire venture in a well-structured business plan, then maybe this idea should halt right here. While a business plan is critical for defining areas like manufacturing, marketing, timelines, and more, it should be an entrepreneur's opening round Bible for keeping a new enterprise on track. By determining the exact dollar figures you need to get started, reach determined growth goals, enter profitability, and more, you set the goalposts before the game even starts for when and where your business needs to go.
Plus, that thorough business plan is also almost always a Step 1 prerequisite for getting any outside investor to share your vision and help back your dream. Even a family member needs to see you've done your homework.
2. Business credit is your lifeline.
Businesses aren't inexpensive to start. At least, not ones that plan to stick around. It'll almost certainly involve some liquidity – and that starts with establishing proper credit for the business itself.
Without legitimate credit in place to help secure locations, stock up on materials, and more, the business could miss out on much-needed financing and opportunities to grow. It could also put your personal credit in the line of fire if you aren't careful.
3. Build firm boundaries between personal money and company money.
Personal and professional finances for a standalone business should be like church and state: completely separate. Opening business bank accounts, lines of credit, and more are how business costs and potential losses all stay siloed in one place, protecting your personal finances from a possible disaster should the business not succeed. Plus, it'll reduce headaches exponentially when you or an accountant are ready to handle business taxes.
Speaking of an accountant, this is where a true tax professional or an attorney can be a big help upfront in legally defining the boundaries of personal and professional funds so there are no sticky situations later.
4. Business insurance could save your life.
You have it for your health, car, home, life...even your pets. So of course, insuring your business against what could happen is a must. The rise in employment lawsuits around Covid is a prime example of the unforeseen nightmares that could impact your business down the road, a problem only protection like business insurance can fix.
From tornadoes and termites, to nuisance suits and everything in-between, business insurance could be your only umbrella is a serious downpour.
5. Get life insurance.
Now that your business is protected, it's also time to start thinking about the same protection for yourself, if you haven't already. If something were to happen to you, life insurance might be the only way your family could keep the business going or get by in your absence.
With everything else already on your plate, companies like Bestow can make it easy to mark this item off your checklist, with policies that can literally be approved and offered in minutes. By answering six quick questions, Bestow can provide a quote on 10- to 30-year term life insurance with payouts from $50,000 all the way up to $1.5 million.
The entire process is handled online with no long conversations with salespeople or agents. No meetings with doctors either with Bestow, one of the only companies that can make immediate coverage decisions online without ever requiring a medical exam. Help protect your family today with Bestow.
Life insurance quotes provided by Bestow Agency, LLC dba Bestow Insurance Services in CA, who is the licensed agent. Term Life Insurance Policies offered by Bestow are issued on policy form LS181 and LS182, or state version including all applicable endorsements and riders, by North American Company for Life and Health Insurance®, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193. Products or issues ages may not be available in all jurisdictions. Limitations or restrictions may apply. Not available in New York. Our application asks about your lifestyle and health to avoid requiring a medical exam.
