You have a great idea, you are passionate, and you are ready to apply for your Los Angeles business license. This is the time to take a step back and re-evaluate your preparation. There are some common mistakes people make when opening their businesses, but by answering some key questions you can avoid these pitfalls.
Do You Have a Business Banking Account?
A business bank account gives you credibility when it comes to paying expenses for your business. More importantly, it can be very confusing come tax season when your personal and business funds are in the same account. Depending on the type of business you run, you may be legally required to have a separate business account.
Have You Done Enough Market Research?
It’s great if your family and friends think you have a great idea or a great product, this is not the same as actual market research. Be sure you have thoroughly reviewed the competition, and to the extent possible offered your product at your projected price point in places like online markets and local grocers. Ensure that you have properly evaluated demand for your product.
Do You Have the Right Team?
You may start off thinking you don’t need a team at all, but once you experience everything that is involved in running a business you will likely change your view. Friends and family members are helpful when it comes to getting along and maybe sharing the same values, but you must be sure they have the skill set necessary to contribute to your business. Consider past coworkers as a source, or try to find people who have had success in your specific product area.
Do You Have Enough Money?
You cannot expect a profit from your business immediately, in fact the vast majority of businesses do not make money for months, or years. Take your personal as well as your business needs into account. If you borrow from your personal finances, will it mean taking from your own retirement or a college fund? Investigate startup grants and the availability of loans before you get yourself into a bind and have to take whatever terms are offered.
Is Your Business Plan Complete?
All of your enthusiasm and work ethic are a great start, but they need backing from a solid, complete business plan before you apply for your Los Angeles business license. Include goals and objectives that are attainable. Setting the bar too high for yourself can lead to discouragement when in fact you are quite successful for someone in your business. Make sure your plan is flexible enough for adaptation as your business grows.