Discover the Top 4 Things You Need to Start a Business
Starting a business can have some of the anxiety-filled concerns of becoming a parent. In both instances, you are creating something that you will be totally responsible for while it arrives in the world and long after the day it is established.
But in life, you have to rise to the occasion when you feel like creating something from scratch is your calling.
You don’t have to start from completely zero in the information department because here are four of the top things one must have to start a business.
Do a Self-Assessment
Starting a business requires that you have a plan, goals that you have set your sights on and a clear understanding of why you are starting this business in the first place.
Identify what your strengths are as they pertain to embarking on the formation of this company.
How will your strengths (and your weaknesses) impact the daily operation of your business?
What type of lifestyle are you seeking and willing to have in order to remain with your business for the long haul?
Continue onward with your self-analysis by asking yourself:
- Do you have the support of your family and closest friends?
- How would you approach this company if money wasn’t an issue?
- How do you define success for yourself in terms of starting your business?
- Who do you admire in business, why, and what can you learn from them?
Business Credit Reporting is Important
Making use of business credit reporting services offers insight into approved customer credit stability.
Personal credit reports are the culmination of individual financial habits., loans that have been borrowed, mortgage payments that have been made, overdue bills that have occurred, and other payments such as utility bills to give lenders a window into just how financially reliable that person is.
With a business credit report, the premise is fairly similar in that it lets lenders determine the creditworthiness of a business, as a collection of data by numerous business credit bureaus.
Many of the business credit bureaus differ from the ones that create personal credit reports (Equifax, TransUnion, Experian, FICO).
Instead, business credit reporting agencies compile credit information that’s specific to a business, with some of the major business credit bureaus being Experian Business, Dun & Bradstreet, and Equifax Small Business.
When you are starting a business, both your personal credit and your business credit reports are important to your economic growth.
Similar to your personal credit report, your business credit report is impacted by several factors that determine if you’re a credit risk, including:
Credit utilization: As a rule of thumb, it is normally a good idea to limit your credit use because use over 30% tends to begin to negatively impact your credit score.
Frequency of payments made on any debts or lines of credit: Credit bureaus keep their eyes on business owners that make consistent payments on time on any lines of credit or debt that they carry.
Length of time that your business has been in operation: Older businesses gain an advantage in this area because they have an established payment history, built up a trackable reputation that they can prove, and have earned their evidence of being either a high or low credit risk.
Outstanding debt: Any company debt that has fallen behind by numerous payments and is potentially on the verge of being sent to debt collectors will drastically hurt your business credit score.
Make a Capitalization Table
Capitalization tables, also known by the shortened name, cap tables, are spreadsheets for a startup company or early-stage venture that lists all the company’s securities data that could include shares, preferred shares, warrants, who owns them, and the prices paid by the investors for them.
Cap tables indicate each investor’s percentage of ownership in the business, what the value of their securities are, and the dilution over the course of time.
Keep in mind that after multiple rounds of financing have taken place, the cap tables become more and more complex and list the potential sources of funding, initial public offerings, mergers and acquisitions, and additional types of transactions.
Aside from keeping track of transactions, a capitalization table also comprises many legal documents such as stock issuances, transfers, cancellations, and conversion of debt to equity. Therefore, your business executives should be encouraged to manage these transactions and documents accurately to be able to showcase these events that have occurred since the company was first established.
The easiest format for a capitalization table lists the shareholders at the beginning and their respective share ownership. to be utilized by entrepreneurs, venture capitalists, and investment analysts to analyze ownership dilution, employee stock options, and new securities.
Accounting with QuickBooks
QuickBooks is an affordable industry leader in business accounting software for small to mid-sized business owners that help you save time on bookkeeping and financial paperwork.
Reports in QuickBooks are very simple to generate and customize. You will always be able to see where you are business-wise.
If you are currently in the process of expanding your company, QuickBooks can assist you in providing all necessary documentation when trying to establish a business loan or lines of credit, such as generating projected balance sheets, profit and loss statements, and statements of cash flow.
QuickBooks is a great way to communicate among business applications that you are already using because it is equipped to share information with over 100 of them to save you time and to minimize the chance of mistakes getting made.
In the financial department, QuickBooks is able to assist you beyond just accounting; it can also help you get your money from customers more rapidly.
With QuickBooks Online Billing, your company can receive online payments by sending an e-mail, an invoice or statement in order for your customer to pay you with a credit card or bank account transfer.
Accepting credit cards is another economic advantage you can simplify your company with by using QuickBooks Merchant Account Service, the only credit card acceptance service integrated with QuickBooks software, which allows you to not have to keep re-keying in information, letting your customers choose between MasterCard, Visa, and American Express.