It takes courage to steer off the beaten track and bring a product or service to the market, with no certain assurance that you will make a living from this. Suddenly what started out as an ambitious side hustle has gained traction and you are considering turning this operation into an actual company. It is an exciting, albeit complicated, place to find yourself in and one that you will want to head into by first doing your due diligence. Having researched and refined the trajectory of many entrepreneurs, we have compiled six invaluable tips for turning your home business into an actual company:
Get your financial structure sorted
Now that you are heading into a fully-fledged business, your current financial structure might not pass the muster. You want to have a framework in place that will support growth and allow you to be agile enough to make decisions and support your contractors and employers who you are bringing on this journey. STP software (Single Touch Payroll) will assist in providing a seamless payment method, with many of these providers also offering additional services that simplify invoicing, expense tracking and delivering a compliant payroll.
Consider where the physical company will be located
Before you rush out to inspect any commercial spaces, take a step back and assess what your pipeline of business is and whether you need to have a physical business address right away. You may find that the first couple of months, or even years, you can conduct business from a share/co-working space, or work from home under new, more formal conditions. Commercial space will incur an overhead expense and hassle that you may not want to commit to right away, instead choosing to build an empire worthy of such an inspiring space in the future.
Get your registrations and licenses in place
When your home business was not your sole income source, setting yourself up with the right registrations and licenses might not have been a priority. Now that you are going legitimate, you need to ensure that you are registered as a business, and employer, registered for GST and licensed to do your trade where you choose. Unfortunately, you cannot simply put a chair in your second bedroom and call yourself a hairdresser, you need to have a license for business type, business activities and location. If your practice involves food and beverage, you will need to be audited to assure quality assurance, as well as a few other hurdles. If in doubt, reach out to a lawyer to gauge what next steps you must take.
Establish your brand
Your brand is now your identity, and the guideline with which you communicate with your audience and the style you are identified. It is important that you are a strict brand custodian, as straying from your brand will impact loyalty and will cause confusion in your own operation. Many businesses do not nail down their brand early on, and then have to revisit this many times in the following years. When you know the ins and outs of your brand, you can adopt the tone easily, identify your market and seize opportunities that align with your unique brand position.
Write and review your business plan regularly
Business plans are an obligatory step to many new businesses, with few understanding their importance and putting in the time to construct a plan that will actually see their business thriving. You will not know that you have achieved success if you do not capture what those parameters are, and check-in with these measurable outcomes. If you have a couple of trusted advisors or employees who have been with you since the start, get their buy-in for your business plan, as a combined unit will make it easier to get a 360-degree view of your business and its opportunities. When you have perfected it, review it at regular intervals so that you stay true to your vision.
Understand the risk and design a contingency plan
Innovation and entrepreneurship are quite exhilarating, but it does not come with no risk. Understand and appreciate the rhetorical circumstances and hurdles that you could face, and figure out what would need to happen in those instances. You might think it is a bad omen to design such a contingency plan, but this is just smart business and will save you money and heartache if those unlikely events come to pass. A good place to start is to figure out what your break event point is, and know what layers you can subtract from your business so that you are finishing in the green or even, and what level of complexity these layers come with.
Here are just six tips of many to turning your business into an actual company, but they are the place to start in gaining stability and some peace of mind. Lastly, remember to stop and celebrate each milestone as you are venturing into uncharted waters and should recognize your courage and tenacity.
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Very helpful. Thanks!