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Starting a new business can be a thrilling, rewarding, and challenging step for anyone. To ensure they are as prepared as possible, here are five important things for new business owners to think about before opening their business.
A realistic, well-thought-out business plan can set new business owners up for success. Business plans create a detailed vision for the business and will often include things like a description of the business; a mission statement; a marketplace or competition analysis of the industry; a description of what kinds of services, goods, or products the business will offer; any sales or marketing-related proposals; and any related funding requests or earnings expectations.
Goals can help new business owners articulate what success will look like for them. To help set goals for their business, they may ask themselves questions like, what are the business’s revenue targets? What are our priorities? How can success be measured beyond revenue?
Goals can be broader or narrower in scope, short- and long-term, and they will differ for each unique business. No matter what their industry is, having clearly-documented business goals can help the owner to set and assess expectations realistically as their business evolves.
One of the most important parts of launching a new business is figuring out overall finances. Business owners will want a clear idea of monthly budgetary expenses like payroll, utilities, taxes, insurance, rent or mortgage costs, and other expenses. They will also want to understand the longer-term projected budgetary and financial goals. Once business owners work the numbers out, they will be able to gauge how their business is doing in a concrete and measurable way.
Obtaining any applicable licenses and permits is essential to ensuring the business can open and operate without issue. Whether opening the business solo or in collaboration with partners or investors, it is important to investigate which licenses and permits are required to be legally and to secure them before opening.
Insurance can be a valuable tool for business owners. Business owners will want to consider everything from liability insurance to life insurance, and decide what could benefit them. Business owners in a partnership often take out life insurance policies on each other. Along with a buy-sell agreement, this allows a surviving business owner to buy their partner’s shares and can ensure a smooth transition for the business. Business owners may want to consider the additional perks of a permanent life insurance policy such as whole life insurance. In addition to the guaranteed death benefit, whole life builds cash value over time. Business owners can utilize the cash value for any reason, including to cover unexpected expenses or finance an opportunity.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value will reduce the death benefit and may affect other aspects of the policy.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) and its subsidiaries in Milwaukee, WI.
Source: Northwestern Mutual
Contact: Don Klein, 1-800-323-7033
