Starting a small business might sound like a great idea at first. However, when you really begin to explore all the challenges that business owners can face each day, you’ll begin to realise that being an entrepreneur isn’t as easy as it seems.

There’s more to launching a business than simply coming up with a good idea and investing in a warehouse where you can ship your products from. You’re going to need a real plan to help you deal with the financial ups and downs of business ownership. Fail to prepare properly, and you could end up being one of the many companies that never unlock its true potential.

Here are some of the crucial steps you’ll need to take before you launch your small business or become self-employed.

1.    Make Sure You Know Your Market

First of all, don’t just assume that there’s going to be an adequate market for your service or product – make sure that you know you’ve got a profit waiting for you by doing plenty of research. There are plenty of examples of companies out there that have jumped into action too quickly without doing their homework. Just look at how much of a disaster the Virgin Cola brand was.

While you’re still in your typical job, spend some time researching the demographics of the customer base that you want to sell to. Figure out what their buying habits are, what their options on the market look like, and where you can make a space for yourself in your chosen industry.

2.    Get the Right Support

No matter how intelligent or talented you might be, there’s a good chance that you’re not going to be the best person to do every job associated with running your business. The more time you spend as an entrepreneur, the more you’ll discover how hard it is to be an accountant, salesperson, marketer, PR manager, and everything else at the same time.

With that in mind, make sure that you have the right support. To begin with, you might decide to do most things yourself, until you develop a little more cash. However, you should at least invest in the essentials, like an accountant to manage your taxes for you, and a marketing team to help you attract customers.

3.    Create Your Business Plan

Ultimately, launching a business is a risky and often difficult endeavour. You might find that you quickly start to pour all of your resources and time into your company before you suddenly realise that there’s nothing you can do to make your organisation a success. To reduce the chances of that happening, start by writing a business plan.

Your business plan will show you whether your company is feasible from day one. For instance, you might find that you can make a £10,000 profit from your new venture each year at first, but you need a lot more than that to pay your bills. If that’s the case, you’ll either need to find another way to make extra money or go back to the drawing board.

4.    Know Your Numbers

There are many reasons why you need to “know your numbers” when you’re starting a business or become self-employed. First, you need to figure out how much money you’re going to need to apply for when you’re taking out a loan. Borrowing too little can leave you in a challenging spot. Then, as you progress through your life as an entrepreneur, you’ll need to know when you have enough cash to take advantage of opportunities that present themselves to you.

The more you know about the cash flow and numbers of your company, the easier it will be to see where you need to cut costs, where you need to budget better, and where you might need to access additional sources of credit when and if the going gets personally and professionally tough.

5.    Understand that It’s Going to be Tough

Finally, remember that you’re going to have to work really hard when you become a business owner. As great as being your own boss sounds at first, the truth is that it’s often a lot harder than it seems. It’s one of the toughest jobs around. Surveys show that small business owners rarely take vacations, and they frequently have the majority of their money tied up in the company, so they can’t splash out on the things that they enjoy.

Being a business founder can also be a very isolating experience, as there are not enough hours in the day to get things done, so you’ll often find yourself working weekends and evenings too. You really need to be passionate and committed if you want to see the fruits of your labour, but you will get there eventually.