Starting a business is daunting, but many people open successful businesses each year. Those who do succeed typically spend significant time raising capital, doing market research, developing a realistic business plan, and defining their target markets before launching their new company. Of course, careful preparation isn’t an absolute guarantee of success, but it can improve your chances enormously.
There are many things you must consider when starting up your business. Have you ever wondered what the top resources needed to start a new business? If so, then I’m sure you’re not alone.
A small business is a company or enterprise that is usually privately owned and operated, with the aim of generating profit. There are many resources needed to start a business, including capital and resources needed to start a business. The importance of resources in business cannot be overstated.
I’ve tried to list below what I think are the most important resources needed to start a business (in no particular order). If you need additional help, contact me and I’ll see what I can do for you.
Importance of Resources for The Success of Business
The first steps that need to be taken in order to start a new business may be a bit daunting, but with the right resources, you will be set for greatness. It will still require hard work and determination to make a success of any business venture.
A crucial part of a business is, the resources available to conduct the business activities in the best way possible, to generate the maximum benefit for the company. It is always best to first determine what the resources for a company are, and which your company will require. A resource is defined as: “an economic factor required to accomplish an activity, or as a means to achieve the desired outcome”. Therefore, all current and possible new resources need to be managed extremely well.
BUSINESS RESOURCE #1: CAPITAL
The first basic business resource is simple—you need money to start your business and keep it afloat. There are costs associated with building your company from the ground up, including things like:
- Funding
- Rent
- Office supplies
- Raw materials
- Employee wages
- License and permit fees
You don’t want to run out of money and give up on your business idea, and yet that’s what happens to many entrepreneurs. Sixty percent of failed businesses said they closed their doors mainly from cash flow problems. To avoid becoming a part of this statistic, you need capital to cover your operating expenses until your business becomes profitable, at which point, ideally, your business will be self-sustaining. You have multiple options to get the money you need. One option is to dip into your personal savings or seek help from family and friends. If that’s not an option, however, you’ll need to explore other resources. For example, you could apply for a loan or line of credit, but most lenders require established credit history, something that new businesses don’t have. In this case, small business factoring is a perfectly suitable option for businesses. Numerous small business factoring companies, also known as invoice factoring companies, are eager to provide you with the money you need for immediate operating expenses. When it comes to capital, every small business has different needs, so don’t be afraid to carefully weigh all your financing options.
Financial Resources: Funding
The most important element in starting a business is funding. Even the most basic home business incurs a multitude of startup costs, including registering a business name, obtaining a business telephone line, and printing business cards.
Financial resources can be obtained from a variety of sources, the easiest being from the personal accounts of the company’s founder. Alternatively, loans and lines of credit may be granted from financial institutions, friends and relatives, private investors, and even the United States government. In addition, many grants are offered from private and public sources to entrepreneurs of all demographics and personal situations.
Unless you have deep pockets or have saved in advance, you’re going to need financing to start your business.
Finding adequate business start-up money is especially critical because there’s no guarantee that your business is going to make money right away, and often initial income is too low to live on. In fact, the lack of adequate funds is a top reason most small businesses fail.2
To get started, you need an initial capital investment–the total amount of money you need to open your doors for business and keep them open until sufficient ongoing revenue is produced.
You’re also going to need operating capital to start a business, which is the money it takes to keep the business going. Operating capital includes expenses such as salaries, wages, rent, business expenses, supplies, utilities, advertising, depreciation, and interest payments.3
A fast easy source of start-up money for small businesses is your personal assets, such as savings, including Registered Retirement Savings Plan (RRSP), pension funds, severance allowances, along with remortgaging a property, credit cards, and personal property.4 Even if you want a small business loan or investors, many will want to see that you’ve invested in yourself as well.
You can also borrow money from family, relatives, and friends, but avoid misunderstandings and bad feelings by always getting agreements about loans in writing and making sure that all loans are set up with proper security, terms and conditions, and a payment schedule.
BUSINESS RESOURCE #2: A DEPENDABLE TEAM
You might be tempted to go it alone, but if you want to get your company off the ground, you’ll need a team to back you up. Recruiting a team of motivated people who share your values will free you up to focus on scaling your business. That’s why a dependable team is a basic business resource no entrepreneur can do without. Having a team will help you focus on the big picture while ensuring you have the help you need to deal with daily responsibilities. Keep in mind that you don’t need to hire all the help you need. Outsourcing can be an option as well, especially when you start a small business. The key is to seek out people who have the skills, experience, and passion to help you bring your vision to life. As you build your team, keep an open mind and use multiple resources. You can find potential employees and contractors through employment search engines, social media, staffing agencies, and university career centers. Be sure to post your available jobs on job boards and on your website. Casting a wide net ensures you’ll be able to choose from a diverse pool of candidates and select people who exceed your expectations. And remember, you can always hire a recruiter to take this task off your shoulders.
Human Resources: Employees
The success of an organization is heavily reliant on the talent and strength of its employees. The hiring of experienced professionals with track records of excellence within their area of expertise ensures that the mission and goals of the company will be carried out efficiently and with competence. Strong team members can be recruited using a variety of methods. Staffing agencies and executive search firms specialize in placing talent of all levels within every industry. An alternative is to find employees through referrals from individuals whose judgment is trusted.
BUSINESS RESOURCE #3: A SUITABLE WORKSPACE
It’s common for entrepreneurs to run start-up businesses out of their homes. If that’s what you’re doing, the third business resource you should consider is a designated workspace. Whether you need an office or a store, it’s important to purchase or rent a separate space that’ll create a positive first impression. Virtual offices have their benefits, but clients, customers, and even future employees look for legitimacy in small businesses. A physical location shows that you’ve invested in your business for the long haul. It can also help you achieve your business goals by bringing your team together under one roof. When you’re searching for a space, don’t forget to consider the potential for expansion—your company will need ample room to grow. Your team will thrive in a clean, comfortable, and safe setting where they can operate at their best. With a physical location, you’ll probably notice improved accountability, collaboration, and productivity among your team members. An exciting office or store can also be an excellent recruitment tool. People want to work in attractive, inspiring spaces where they can feel proud of what they do. So, if you haven’t already, think about investing in a defined company workspace.
Physical Resources: Premises and Equipment
Whether a small home business or a retail operation with multiple locations, every organization must have the appropriate physical resources to survive. This includes a proper workspace, working telephone line, adequate information systems, and effective marketing materials. This aspect of business planning can be one of the costliest. As such, it is important for an entrepreneur to realistically assess his needs before making any purchases.
BUSINESS RESOURCE #4: KNOW-HOW
The truth is, an idea isn’t enough to make your business succeed—you need a plan backed by thorough research. Education should be central to your company, and new business owners can always benefit from learning more about their competition, audience, industry, and product or service development. Professional development is very important too, as great leadership is crucial to any growing business. Ongoing education will give you the knowledge and training you need to make your business a success. Here are some ways to brush up on your business knowledge:
- Read books and publications that are relevant to your business and follow online publications and websites. Others in your field are sharing their expertise, and you can benefit from their experiences and knowledge.
- Attend classes, conferences, retreats and seminars whenever it’s feasible. They can provide fascinating insights into new business trends and training to help you grow your company.
- Look into organizations such as the Small Business Administration, the National Federation for Independent Businesses (NFIB), SCORE and the U.S. Chamber of Commerce. These associations provide mentoring for new and established small business owners.
- Ask your mentors or industry experts you admire for business advice. They can help you identify areas that need improvement and offer possible solutions. Additionally, professionals with decades of experience under their belts can tell you about mistakes they’ve made in the past, so you can avoid them as you grow your company.
When small business owners reference books and seek help from mentors and other successful people in their industries, they can feel better prepared to run their businesses.
Educational Resources: Industry Know How
Perhaps the greatest thing an entrepreneur can do when establishing a new business is to gain as much education as possible. By understanding her competition and gaining an in-depth knowledge of her industry, she will be better prepared to make smarter decisions regarding the direction of her firm. Educational resources can be found through professional trade associations that are geared toward her industry, her local chamber of commerce as well as the Small Business Administration.
Business knowledge before you start a business is critical. All the drive and determination in the world isn’t going to help you if you don’t have the knowledge to run a business and don’t research and plan for your success appropriately.
Many people have tried to start a business without acquiring the business knowledge they need to make their business a success and, as a result, their businesses have failed.
To start a business, you have to be knowledgeable about many different aspects of business and have a variety of skills, or hire people who have the skills you lack.
If you aren’t knowledgeable enough about accounting to keep your own books, for instance, you’ll need to hire a bookkeeper and/or an accountant. If your business is internet-based and you’re not an expert in website development, you’d be wise to hire a company to design and maintain your website.
When you’re creating your business plan, one of your first steps needs to be a frank assessment of your skills and expertise. Which aspects of the business are you qualified or willing to handle and which will necessitate either getting informed or calling in outside help?
Areas you need to know about include:
- Managing people such as your staff or freelancers you hire to help you
- Sales and marketing, which requires knowing who your competitors are and how your product or services compare, as well as who your target market is, and then developing a feasible marketing plan and creating promotional material
- Business operations such as how to manage inventory and fill orders, inventory management, product or service delivery, and customer service policy
- Resource management such as suppliers and support services
BUSINESS RESOURCE #5 Bonus: Emotional Resources: Support Systems
Starting a business can be an extremely stressful endeavor for an entrepreneur to undertake. To maintain her sanity as well as stay motivated, it is important she has a support team that can give her inspiration and guidance as needed. This team may be composed of friends and family as well as a mentor or professional group.
You may be in business by yourself, but no business succeeds without a good support system. As an entrepreneur, you need interpersonal skills, teambuilding skills, and leadership skills, as you’ll need to work with others including vendors, employees or freelancers, customers, and other support resources to have business success.
When you’re thinking of business support, look first to the home front. Your family should be your number one cheerleader when it comes to your success. A supportive spouse can be there to listen to your ideas or problems and provide the encouragement or advice that keeps you going.
Your spouse may also offer direct business support, such as providing the capital needed to start a business or working in the company without pay to keep costs down. Spouses who contribute financially by working outside the business are also a common small business scenario.
Having a supportive spouse is especially critical if you want to start a home-based business. You can’t start a home-based business without considering what your family members think about the idea, what role(s) your family members might play in your business, and how your business is going to affect your home life. Without the active support of your family, your home business will fail. Talk out these issues with your family beforehand and explore how supportive your family is before you start a business.
Support can come from other sources including other business people who have been where you are and achieved what you’re striving for. Talking to other successful business people helps you avoid pitfalls and provide insight into what works and what doesn’t.
If you can’t find someone locally to talk to, there’s an ever-growing network of business communities online where you can get the information you need, and sometimes good advice, too. You can get a free mentor through SCORE, which also offers webinars and courses. A final option would be to hire a business coach.
You may be in business by yourself, but you don’t have to be alone. Build a support team that can provide you with motivation, inspiration, feedback, and knowledge.
PREPARATION IS THE KEY TO SUCCESS
Starting a small business company is all about preparation. The four resources we’ve listed here represent the tools and assistance you need to turn your start-up from an idea to reality.
Additional Resources You will need
Fully Commit
Successful entrepreneurs are fully committed to their business ventures. You need to do the same. You have to put your heart and soul into what you’re doing, truly believe in your product or service, and be prepared to work long hours to get all the tasks done that are required to grow and sustain a business.
When you start a business, you have to be ready to make sacrifices, such as not having holidays or even a salary for what may seem like an endless stretch of time. And you have to do all this without the safety net that salaried employees are used to, such as benefits and pension plans, unless you pay for them yourself. In fact, you have to have a whole different mindset than an employee does.
Be a “Type D”
But just being able to make a commitment doesn’t automatically lead to business success. To create a profitable business that endures, you also have to be a “Type D” person—someone who has a desire for success coupled with drive, discipline, and determination.1
You have to not only have the business ideas but also be able to execute them, even when you run into problems. Successful business people are tenacious; obstacles are temporary barriers to work around, not roadblocks. They may take “no” for an answer, but they’re constantly looking and asking for the people who’ll say “yes.”
Plus you need discipline and determination as these traits are what give successful business people the fuel to follow through on their business ideas and endure the ups and downs of the economic climate.
Desire, drive, discipline, and determination are all required for business success!
Conclusion
So you’d like to start a business but don’t know where to begin? This is a problem many people face, and it’s also one we want to help you solve. If you’re reading this there’s a good chance that you’re at the point in your life where you’d like to start a business, and it’s time to take the next big step. The first major question many people ask is, what kind of capital or resources do I need to start?
As a new entrepreneur, it’s important to understand what tools you’ll need to get started. I often spend a lot of time researching the best tools, choosing the right ones, and then worrying about whether or not I have enough assets to kick off my idea.
Starting your own business is not as easy as it seems. Starting your own business require great planning and perfect execution. Anyone can start a business, but what most people fail to do is to maintain the business they started. This takes time and an adequate amount of resources needed to start a business.