The Essential Of Starting Your Own Business

• Accounting 

An entrepreneur must know enough about accounting to plan the amount of money required to operate the business for a sufficient start-up phase which will include estimating the amount of financial capital required,  making a presentation to a banker or investor, accurately track income and cost of sales, and predict outcomes. There are easy to learn programs that can be installed on a home computer, but a friend or family member with some accounting experience will be an advantage.The business owner and investor also must have an outside, impersonal financial advisor. 

This can be an accountant who will also be available to deal with tax matters.There is absolutely no possibility that the business can succeed without a solid foundation of daily entries, monthly reviews and regular advice from an outside objective financial professional. This is the truth serum of business.

 

• Banking 

Most entrepreneurs need a bank for loans and for assistance in making transactions across state and national boundaries.  Choosing a bank is deceptively easy. The first people you meet in the commercial department are  motivated to make large loans, and they will not feel much trepidation about your risk. They can be easily dazzled with a detailed computer spreadsheet filled with speculative sales and profit projections. If you business fails, they will not be sympathetic.  

They will take your house and every other asset in their reach. If you have inventory they will take it to auction where it will be sold for pennies on the dollar. If the bank fails to recover their loans from your business immediately they will probably take you to court, where you could be paraded before a judge like a common criminal.

If you are importing or exporting you will also need a bank with a track record of working with international businesses. It is best if you can meet personally with the people who would be arranging international letters of credit and other special trade documents. Bank personnel are not uniformly well trained in all forms of transactions. It is best if you can meet eye-to-eye with people who will take responsibility for your business banking needs.

 

•  Capital  

The amount of capital having been estimated in it is obviously necessary to decide if the cash would come from savings, investments, IRAs loans or partners. The first question should be, "How much can I afford to lose?"

There is a high probability that the business will absorb some of your liquid assets, such as savings accounts, but you bank may also want to use your home and your retirement accounts as collateral. And even if you only leverage half or a quarter of your assets, there are commonly scenarios  in which all assets are lost.One of the slippery slopes is the thought that the business will turn around and take off with just a little more time and a little more capital. This is how dreams can leave people shirtless. There is undeniable risk in business, especially in launching a new business. Like a good poker player, never bet more than you can afford to lose.