What every entrepreneur needs to do before their business opens
Want your business to be a personal and professional success? Professionals outline the things you should do before your business even opens its doors
As you get ready for your business to officially launch, it can seem like your to-do list gets longer by the hour, and it's important to prioritize what needs to be done.
We asked experienced professionals, who work with business owners, the one thing they recommend doing before or as soon as a business opens its doors. Here's what they had to say.
Set up your business succession plan
It might seem counterintuitive to start thinking about how you will transition out of your business when it may not even be off the ground. However, it's never too early to start. Business succession plans can take years or even decades to be finalized.
As part of the succession plan, "You have to look at all the contingencies," said Joe Fahey, CFA, national director of business succession planning at PNC Corporate and Institutional Banking. "What happens if you pass away prematurely or become disabled? You want to make sure your business and family are taken care of."
The probability is you will live a long, healthy life, so think of business succession planning as a continuous process-inception, growth to maturity-that helps you position the company to maximize value and to ensure your personal financial peace of mind.
According to Fahey, whether you are a novice or established entrepreneur, it's critical to work with a business strategist who can help you answer tough questions such as how and when you should transition the business, and how to maximize value and communicate the transition to your family so that it is a harmonious transition.
Plan for your and your employees' retirement
Offering a retirement plan gives you an opportunity to provide competitive benefits and thus attract and retain talent.
"One of the things a small business owner should think about is what type of employees they need, their demographics and the number of employees," said Sherri Painter, director of retirement plan services at PNC Retirement Solutions.
Painter said there are a variety of retirement vehicles that you can implement right away. One such option is called a SIMPLE 401(k). A SIMPLE 401(k) has many of the same benefits as a traditional 401(k) plan, but it may be more cost-effective and has fewer administrative requirements.
"A retirement plan is one thing business owners typically overlook when starting a company," Painter said. "You have so much going on as a small business owner, but you should focus on the benefits for yourself and your employees."
Offering a retirement plan not only allows you to save for retirement, but also may provide an employer tax deduction, Painter noted.
Get proper insurance coverage for you and your business
Tristan Harding, director of insurance at PNC Wealth Management, has seen entrepreneurs leave a lucrative corporate career to start their own business -- but they leave behind some important benefits.
"Do not allow your health insurance coverage to lapse, especially if you or your insured family members have pre-existing conditions," he said.
After leaving a job you have a certain period of time -- usually up to 60 days -- to buy health insurance.
Harding also advised new business owners to make sure they have adequate life insurance to cover their family and provide for their future.
"Your new business will not provide group insurance, so you will need to purchase an individual policy," he said.
For your business, Harding said to minimize your liability and transfer risk by selecting the proper structure and ownership of the business.
"Make sure you have adequate professional insurance so you can separate your personal assets from business liabilities," he recommended.
Know how you will make and receive payments
Gavin Geraci, chief operating officer of PNC Business Banking, explained the importance of knowing how you are going to make and receive payments.
"Confirming you have the appropriate payments capabilities in place before opening your doors serves multiple purposes, such as helping your cash flow from day one and enhancing your supplier and customer experience and loyalty," Geraci explained.
In starting a new business, it's important to understand that there are a series of "levers" that may affect your cash position.
"You might need access to adequate capital to buy inventory with a line of credit or business credit card, or, in order to stay competitive, you might need to offer your customers multiple payment options through merchant processing or online bill payment," he added.
Starting a business can be exciting, exhausting and nerve-racking at the same time, but if you plan properly and prioritize, you can set up yourself and your business for future success.