Guide to Launch Your Entrepreneurial Journey

Are you ready to dive headfirst into the world of entrepreneurship?

Before you take that leap of faith, pause for a moment and go through the roadmap below. Success as an entrepreneur doesn't happen by chance, prepare yourself following this list.

1 | Make an 18 months Cash Flow Forecast

Developing a full business plan is a crucial step for any start-up. You can, however, begin with a lighter version, a simple cash projection. This outlines and tests the merits of the main drivers of your business and, eventually, any funding you’ll need.

You can use a basic Excel spreadsheet and focus on the main financials, especially the monthly distribution to avoid treasury issues early on. But don’t limit this to the first few months, make sure you include all your annual responsibilities, like income tax. 18 months is a reasonable time frame for this exercise.

Be aware at this stage you should have little to no credit, so you’ll likely have to pay vendors in advance and collections from customers have some delay, depending on your business model.

Check that you include accounting and administrative fees, insurances, IT and communication costs, transportation costs, utilities, rents and a generous contingency for other harder to estimate or unforeseen overheads. They will show up! Regarding your salary, be sure to include the gross amount and all costs associated with, you might need support for this, as remarked ahead.

2 | Identify the Resources you need and validate costs

Once you’ve drafted your business plan, even if just on the suggested cash flow perspective, you should have a clearer idea of the resources you need and probably others that you weren’t initially considering.

This might lead you to be more assured, however it’s important to validate your assumptions. This should be done by starting contacts with actual suppliers to check the costs. You may have some surprises here, both positive and negative, but at least you assessed all of this before actually starting your business.

Also, be sure to pose your doubts, namely on payroll costs, to any accounting firm you get in touch with. They will be glad to assist you, as a prospective customer, with simulations. At this point you should also ask exact figures for any one-off costs associated with company registration.

3 | Calculate the Capital Needs

It's time to figure out how much cash you need upfront to start your business.

You should now have a very good idea on all drivers to calculate your capital needs. Keep in mind that on most cases, there might be a gap between when you invoice customers and when you receive payment.

Be sure the initial capital accounts for all your obligations for a comfortable number of months, before your cash from revenues starts coming in on more steady flow. Many Business Models have customers paying upfront, but this is harder to implement when starting-up.

4 | Evaluate your current Savings

So now you have your plan. However, things not always go according to plans so you should now plan for the unexpected. That's where your personal savings come in.

Estimate how many months you can live off your savings and assess if it's enough.

This is your backup plan and it's essential to have it in place. If you have not considered saving for this purpose in advance and your new business starts lagging a bit on cash generation, consequences with be challenging.

5 | Have someone critically analyse your Business Plan

It is a good practice to have your Business Plan challenged. Usually this can be done by some family member with some business background. Insights on this are invaluable, you can avoid risks not identified and even find alternative revenue channels you’ve not looked into yet.

If you have the need to get this done by a third party and your business idea is innovative, make sure to disguise your main value drivers the best you can, while leaving enough data to assess the profitability. This can be very specific depending on areas, I can provide some tips, just leave a comment below, but with no actual business details.

6 | Start the registration process

If everything is looking good, you should now start the registration process. I recommend that you start by making the registration of the web domains that you'd like to be associated with their company or brands. This might lead you to change some registration details, like the name of the company.

This step will have costs, so if you feel unease with it, probably you have doubts on the outlook of your business. This is neither good or bad by itself, rather a great opportunity for you to revisit the points that might cause you this discomfort sensation.

Your start-up might get delayed a couple of months, but you’ll much better prepared to success after any fine tuning required, and it will be much harder to get a second chance if you only identify it once your activity is already running.