With a wealth of experience in industries such as tech, gaming, education and real estate, Roman Semiokhin has a unique understanding of what it takes to establish, grow and run a successful business. This article will explore the key steps for entrepreneurs establishing a business, identifying priorities and potential pitfalls.
Irrespective of industry, starting a business is a huge commitment. Many budding business leaders simply underestimate the amount of time, energy and resources it takes to start and grow a company.
Common challenges include:
- Coming up with a great product or service
- Accessing capital and cash flow
- Having a strong vision for the business
- Identifying and onboarding excellent employees
- Handling employees that perform poorly
- Handling rejection from customers
- Managing time efficiently
- Recognising the need to pivot business strategy
- Maintaining momentum to keep the business going, even during tough times
- Establishing and maintaining a healthy work/life balance
One of the first things someone starting their own business needs to consider is business format. A sole proprietorship could leave personal assets vulnerable with regard to business liabilities and debts. For this reason, many entrepreneurs opt to start their business as a corporation or limited liability company, since neither of these options are particularly difficult or expensive to set up.
However, it would be a mistake to assume that filing a Certificate of Incorporation automatically protects business owners from all personal liability. Nevertheless, business owners can lessen the likelihood of losing their personal assets to creditors of the business by adhering to certain procedures, including:
- Always using the business name in the discharge of their corporate duties
- Always using a proper signature, including the name of the corporation and their title
- Adhering to all corporate formalities, including issuing stock properly, following bylaws, holding regular board meetings, recording minutes, and fulfilling other corporate formalities
- Ensuring corporate funds and the funds of individual shareholders are always kept separate
- Keeping comprehensive tax records and filing separate tax returns for the corporation
- Ensuring all business transactions are kept separate from personal transactions
After coming up with a great concept, the entrepreneur will need to think of a name for their business, which can have a significant impact on its success. It is prudent to avoid names that are difficult to spell, as well as those that could prove limiting as the business grows. Entrepreneurs should conduct thorough trademark and internet searches, ensuring that they secure the .com domain name as early as possible.
With around 50% of businesses folding in the first five years, an enterprise’s chances of success depend to a large extent on the outlook of its owners and how realistic they are about their business goals. Although Bureau of Labor statistics suggest that 80% of new businesses survive the first 12 months of trading, the actual rate varies significantly from industry to industry, with sectors like social assistance and healthcare demonstrating a higher-than-average survival rate, and businesses centring around transport and construction typically demonstrating a lower success rate.
Businesses fail for a wide range of different reasons, with common causes including a lack of effective marketing, negative customer experience, lack of demand, too much competition, inaccurate pricing, and poor hiring decisions.
To maximise their chances of corporate success, entrepreneurs must:
- Draft a business plan
- Analise the marketplace, defining clear KPIs
- Set profitability and revenue goals
- Hire the right people and create a HR team
- Incentivise staff with benefits
- Implement the right tools to support their growth strategy
Starting and growing a business is an exciting, potentially life-changing process that requires a clear picture of the road ahead to help business owners prepare for any potential surprises. There are considerable challenges along the way, and rarely any quick wins, but for those who are prepared to put in the hard work, following a well-thought-out business plan, the end result could be incredibly rewarding.