If you are visiting this blog then I assume that you are considering on starting your own 
business. I wish you good luck.
In this post I have covered the ten most important things you should consider before starting your business.
So without much adieu, let’s get started.
- Decide how you will make money
- You do not have to resign your day employer
- Understand the type of company you want to form
- Avoid conflict of interest with your current job
- Entrepreneurship is not a glamorous world
- Persistence is the key to success
- Be mentally prepared to accept failure
- Learn to wear multiple hats
#1. Decide how you will make money
The purpose of a business is to make money and be profitable. Before you kickstart your business you need to be sure on how you will make money.
How does it matter?
A lot of ideas or new businesses fail because founders run out of money or they did not have a clear plan on how will they generate revenue with their business.
Not having enough money or not able to make enough money is the number one enemy that might prevent you from making money and building your business.
Before opening your business to the public you should plan on how you will be generating revenue.
You can make money by selling a physical or digital product or you could make money doing an extra job or by starting a blog. This requires meticulous planning on how you plan to reach the right target audience for your business.
Generating a reasonable amount of income from your business cannot happen overnight. It takes time and you need to plan on how you will sustain yourself till your business starts generating revenue.
I don’t mean to discourage you but what is the point in starting a business to eventually shut it down in the next couple of month.
Bottom line.
To put things in respective you need to figure out a way to have some startup cash for your new business. This could be a part of your savings or a low interest loan from your friends and relatives. This startup cash will be your working capital.
This startup cash will help you bootstrap your business till it starts generating a regular stream of income. Ensure you do not spend money on unnecessary stuff. It is important to sustain your business with this startup cash till it generates enough money to sustain itself.
In addition to that you need to maintain a monthly cash-flow statement. This will ensure that you do not spend money on unnecessary events or items.
It need not be anything complex and can look like a simple grocery list. The cash flow statement which will help you understand if you have enough money in the bank and how long will the money in your bank account help you run. You can use the template that I use for my businesses.
Knowing your burn rate will help you plan your sales or revenue generation targets.
Familiarise yourself with these basics of money management and your business will not die a premature death.
#2. You do not have to resign your day job
Starting your own business is a big decision and requires a lot of effort. However unlike conventional wisdom goes you do not have to resign your job to start your business.
You can work on it after you return home from office or during the weekends. Be patient, do not worry about the progress and enjoy the learning.
Being employed while you are starting your business will negate the chances of financial pressure from you. Which means need not worry about paying the bills every month and meeting other important expenses while growing your business.
With the financial worry out of your way you can now fully focus on building and scaling your business.
#3. Understand the type of company you want to form
While you are making up plans to start your first business it is equally important to give your company a proper structure. Incorporating your company will make it easier in the longer run to raise invoices, receive payments and file income taxes etc.
Having a proper business name will make your business sound more professional.
Okay, I’m convinced what next?
There are different ways a company can be incorporated. I have talked about them in much more detail below.
Partnership Firm
Partnership firm is the most easiest and the cheapest way to register your company.
It is simple. You need to find a partner for your business and execute a simple partnership deed between you and your partner.
If you are a solo entrepreneur then you can bring in one of your family members for the time being. After you execute the partnership deed between you and your partner (aka family member) you can use it to get a PAN card in the name of your company.
Once you receive the PAN card you can then go ahead and open a bank account for your company. Voila, you have now started your own company and are now open for business.
This is my favourite way to start a company as it requires very less money and is quicker to kickstart your business.
One Person Company (OPC)
For some reason if you are not convinced on starting a partnership firm or if you have not found a partner or a family member who is willing to be your acting partner, then OPC (one person company) could be your preferred choice.
You can incorporate your business as a one person company with the minister of corporate affairs. Any chartered accountant can help you with this.
Indian government has now simplified the process of incorporating a company so you do not have to spend a lot of money or bribe someone to incorporate your company.
Just go to some reputed chartered accountant in your neighbourhood and they should be able to help you out.
MCA (ministry of corporate affairs) has put together some frequently asked questions on OPC. You can check it out in the link below.
Private Limited (Pvt. Ltd.)
You can also incorporate your company as a private limited. You can approach
I’m not a big fan of incorporating your new business as a private limited at an early stage as it does not provide any add-on benefits or incentives.
In addition to that you also have to spend money on compliance documents that needs to be filed with the MCA. All this could add up to your running cost. So try to avoid going this route unless you plan to issue shares or bring investors on board.
However in the longer run a private limited company would be the best option, but at an early stage a private limited could be an overkill.
I did the mistake of incorporating my business as a private limited at a very early stage and that put me in a situation where I had to spend money on filing compliance documents even when the business had not started making a reasonable income.
If you are not bringing in any investors and are not issuing any shares or esops (employee stock options) then this might not be the best way to kickstart your company.
#4. Avoid conflict of interest with your current employer
If you have decided to quit your job before starting your business then you can skip this section.
If not then keep reading…
It is understable if you are afraid to quit your day job. The good news is you do not have to quit your day job to start a business or a side hustle.
However you need to be cautious if your company will be cool with it. Also you should be careful and avoid any situation where there is a conflict of interest.
To be on the safer side avoid doing a similar business or avoid targeting similar customers. If not change your day job so that your new job and your business do not criss cross each other’s paths.
If you think that your company might not be excited about you running your own business then they might make your life miserable so you need to be careful and protect yourself so that you do not get into a mess both legally and personally.
Avoid any possibility of confrontations with your employer.
The idea is to start a business while being employed. Not getting into messy legal battles.
#5. Entrepreneurship is not a glamorous world
Yes, entrepreneurship is not glamorous. It is a lot of hard work and a lot of stress and a lot of other things.
I met a guy at Starbucks in New Delhi (I enjoy working from Starbucks).
I was writing some code when he politely introduced himself to me. I liked the way he approached so we started talking.
He told me that he was an entrepreneur and he was running his own company.
I got inquisitive and wanted to know more so I started probing him for more details about this company.
That’s when this guy handed me his business card and said that they have been in stealth mode for three years.
By now I was even more curious so I checked his website to know what were they building. To my surprise there no website and no landing page.
When I asked him why you don’t have a website he told me, “I told you right, we are in stealth mode”. I smiled and stopped asking anymore questions.
This in my humble opinion is a wrong approach.
If you feel that you are building the next big thing then you need to make as much noise as possible so that you can get as much users as possible when you launch.
If for some reason if you are skeptical of spreading the word then at least have a landing page so that people know that you are building something that might be useful to them.
On the contrary having a product in development for three years is bad for business because the market has not yet validated your idea and there is a high probability that the market might not need you are building.
Bottom line?
Develop fast and launch fast.
If you feel your product is complicated then try to build the must have features and launch it as a beta version product or invite only product.
Then based on market demands you can shape your product and at the same time you can also add the features that you wanted to add as part of your product roadmap.
It is not wise to spend months and years building a product without launching it in the market.
There always an exception to everything but running a profitable business is more about following the rules than looking at some exceptions.
#6. Persistence is the key to success
It took me awhile to realise that the secret to a successful and profitable business was rather being persistent than anything else.
Entrepreneurship is not about starting something and becoming super rich overnight. It’s definitely not about spending two years of your life running a business and then shutting shop at the end of two years if things do not work out as you expected.
It is important to be consistent and persistent in running a business.
If you sell a product you need to consistently sell it. It’s not like you can sell it for few months or years and stop. If you create content then you have to create content consistently and not stop after you have acquired a certain number of audience or vice versa.
There might be days and months when no one is buying your product or no one is consuming your content but you should not stop. You need to keep trying, to sell your product and you need to keep creating content .
Success and profitability is the compounded value of doing repetitive stuff over a period of time.
To put things in perspective once you keep doing the same activity over a period of time the number of people who either buy your product or consume your content will keep increasing and you can see the the financial windfall turn in your favour in a couple of years.
Overnight success is a myth. For some this could be two years and for others it could even be a decade.
Moral of the story?
Don’t quit too early. Businesses are built over a number of years.
#7. Be mentally prepared to accept failure
Failure is the first partner that an entrepreneur gets on board even if he / she does not want to.
Sometimes your content might not have any audience for months together or some of your products might not click in the market and you might not be able to get even a single customer for weeks at a time.
Be strong. These setbacks should not dishearten you and should not make you stop. Running a business is like steering a sailboat. You turn the sail matching the direction of the wind to move forward. So do not shut your business down for temporary setbacks and failures.
Don’t quit and keep going. As I mentioned earlier it is very important to be consistent and persistent in business.
If one product fails you need to look for another idea. If another one fails and then another one and so on.
This is how successful businesses are built. I was watching entrepreneur Dan Lok’s interview and I was blown away when I learnt that Dan’s first 13 businesses had failed before he saw success in his 14th venture. OMG!
Conclusion.
Your failures and temporary setbacks should not affect you on your journey of running your business and making it a financial success.
Learn to accept failures and get used to not over rejoicing on successes. Running a business is a journey and not a destination.
#8. Learn to wear multiple hats
Entrepreneurs who have run successful businesses in the past can testify that they had to take on and perform multiple roles to run their businesses.
One day they had to don the hat of a digital marketing guy and the next day they are the nerdy tech guy.
Entrepreneurship is about learning multiple skills and leveraging them to build a successful business.
In his book the four hour work week, Tim Ferriss talks about outsourcing tasks like customer 
support, finance and other stuff to external agencies or freelancers.
For some this works and for others this might not. I’m not a guy who is comfortable outsourcing most aspects of the business.
I start and run businesses because I love doing so. I love getting my hands dirty and I don’t feel these tasks weigh me down in anyway.
However I do have certain parts of the business which I have outsourced.
The journey of running a business teaches you a lot of stuff and it is important as an entrepreneur for us to learn these lessons.
It’s up to you on how you want to build your business. You can either do it yourself or outsource everything or outsource certain parts of the business.
For instance I write all the articles in this blog and also take care of the technicalities of running this blog. However I have outsourced my finance department to a consultant who does all the bookkeeping for me.
You can choose the tasks that you are good or enjoy doing yourself and outsource the rest.
All the best
I hope this post will help you in starting your business.
I’d like to hear your take:
Which point from this post was useful to you and which one was not?
Please do let me know in the comments section below.