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Small Business Plans

7 Things to Consider Before Starting a Business

July 14, 2020
Guide to small business retirement plans

Get your finances in order …

Don’t proceed if you don’t know what this venture is going to cost. What will the startup costs be? What’s it going to take to make a profit, and how long will you be ramping up until you get there? How will you keep the lights on until you do?

A word to the wise: You can’t overestimate the amount of working capital you’ll need. One potential place to start is by tapping into your self-directed retirement account (if you meet certain guidelines). It’s a great way to fund your passions and still retire in style.

Alternatively, you can look into a small business loan from the Small Business Association or another lender (potentially funded by their self-directed retirement account).

Some small business owners look for investors to secure funding, but remember the Shark Tank effect. Investors may be willing to front you working capital, but in return they’ll want a stake in your business. A popular option now is crowdfunding, where you solicit smaller amounts of funds from multiple people.

… but don’t overspend

It’s very easy for zealous entrepreneurs to get that chic office in the trendy part of town and outfit it with the latest technology and a beer fridge for the break room.

Hold on, there.

You’re not ready for all of that yet. Bill Gates started Microsoft in his garage. Don’t invest in an office for 20 employees when it’s just you and your spouse. Don’t buy more technology that you need to get things going. That fancy printer can wait if you’ve got one that works right now.

Start with the bare minimum you need to get up and running and build from there.

Be ready to wear all the hats

Small businesses typically start out as one-person operations. That means you’ll be responsible for it all, from the time you turn on the lights in the morning until you turn them off in the evening. It also means long hours, commitment, drive, and the passion to do what’s necessary to get your business off the ground.

Video: Small Business Retirement Plans

Investigate retirement accounts

Many self-employed people don’t know they should, or even can, open a retirement plan. If you’re self-employed, a sole proprietor, or the owner of a small business with 100 or fewer employees, there are some excellent plans out there tailored for your needs.

Know when to call in the pros

Accounting, insurance and taxes require professionals. Getting these things wrong can doom your business before it even begins.

[Related resources: Ways Small Business Owners Can Cut Expenses and Save on Taxes and Tax Preparation Checklist]

At Equity Trust, we’re committed to helping individuals and small business owners get the most out of their retirement. Give us a call today.


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