Denver, Colorado, residents are always searching for ways to earn additional money. Some take a second job to make ends meet while other residents, who may consider themselves mavericks, start their own businesses. Some businesses start from scratch while others are acquired through purchasing a franchise or taking over a family-owned business. Starting a business is not a simple process and soon-to-be business owners should consider some facts in order to avoid costly mistakes along the way.
Business formation can be challenging and rewarding for everyone. Yet, the stakes are high, especially for a new business, as only about half of all new businesses survive the first five years, according to the U.S. Small Business Administration. This brutal industry, plus the always-changing economy, can greatly affect the success of a business. Without proper planning and careful consideration, a new business start-up can go bankrupt in a relatively short time. For people who are planning to start a small business, it is important to educate themselves about the industry, know their competitors and speak with a financial advisor.
Once a person has created a solid business plan, he or she can find a way to fund the business. Personal savings, borrowing from family members and friends or getting a loan from a bank are ways to finance a new business. A soon-to-be business owner should know that a new business will not automatically generate a good cash flow, which is why it is important to secure personal finances before starting a business.
A business owner should also become familiar with business laws by speaking with a knowledgeable Denver commercial law attorney who can help protect their best interests, especially when entering business contracts or creating employment agreements. By doing this, an individual looking to go into business for himself or herself can limit the risk and reduce the likelihood of future litigation.
Source: Frontiersman, “Why start a small business?” Paul Beer, July 5, 2014