There are all kinds of business models. If you’re an entrepreneur and you have an idea, there are also all kinds of ways you can get it off the ground. Businesses will vary in terms of their features and how you fund them.
While no two businesses will look exactly alike, there are certain areas or features that many companies need, regardless of their size and the products or services they offer. With that in mind, let’s look at five things that the average business requires. Occasionally, you can get away with not having one of these things as a business owner, but not very often.
Most companies need an IT department. That department might consist of a single person who creates your website and app. Maybe all they do is troubleshoot your router if you have connectivity issues in your home office.
On the other hand, perhaps you’re launching an enormous company with many different aspects, departments, and products. If so, you’ll likely have a much larger IT department.
IT stands for information technology, and it is the rare business that doesn’t have some sort of tech they need to utilize if the owner wants people to become customers. If you own a smaller or medium-sized company, it is possible you won’t need to hire a full-time IT person, or more than one. You might hire a freelancer occasionally for an hourly rate if you need a little IT help, but not very much.
If you regularly have tasks like figuring out how to manage SSH keys for Linux machines, that’s a more complex IT task, so you’ll need to at least consider having IT support standing by. If you do, you should make sure you have plenty of regular work for them to justify keeping them on the payroll. If your IT team works exclusively for your company, you will also probably have to offer them a generous benefits package in addition to a competitive salary.
An R and D Department
Most companies also need an R and D department. R and D means research and development. Your R and D department figures out new product ideas and works to try and develop them.
The only companies that can get by without at least a little research and development are those that have certain products they make or services they offer, and they don’t plan on expanding at all. If you have a particular amount of market share, and you don’t want to expand to other parts of the state or around the country, you might feel like you can forego this area. If you ever wish to take your company international, though, or you want to expand in some other way, figuring out additional products to add to your line often makes sense.
Your R and D department might need a significant budget if you have a huge company and ambitious plans. Maybe your target customer base knows about you now, but you have only a tenuous hold over your market share. Your R and D department might come up with a new product that makes your brand a household name and catapults your company to new prominence.
If you make only a few products, and you have no plans of getting any bigger, maybe you can get along without an R and D department. In the modern era, it’s almost impossible for your company not to have a business website, though.
It hardly matters how big you are or what services and products you offer. When someone hears about your company, looking online to find out about you is probably the first thing they’ll do. They’ll most likely Google your company’s name to see what comes up. Your business’s website should be one of the top hits.
Someone will learn about your company for the first time when they visit your site to see whether they want to support your business. Your website is where you can control the narrative. If the site looks very professional, you’re making an excellent first impression and making a conversion more likely.
You can control what visuals appear on your site. You can control the copy you write that appears there. You can control the images, the FAQ section, the “about” section, and the product sales pages.
This is where your IT support will come in handy. They might design your website using one of the popular site creation platforms like WordPress or Wix. They can also add new features or change others depending on the feedback you get.
Before you take your company’s site live, you might conduct focus groups so some of your potential customers can interact with it. You can take what they say into account and possibly make any warranted changes before activating your site for the general public.
Virtually every company needs insurance as well. The only thing you’ll have to determine is exactly what kinds you’ll need.
You will probably need professional liability insurance. That will protect you against any negligence claims that someone might try to bring against you if you harm them due to performance failures.
You may need business interruption insurance. This insurance can keep your business open if there’s some disaster beyond your control. If a tornado destroys your office, for instance, and your staff can’t work there, this insurance can help you stay open until you can rebuild.
If you have any company vehicles, you’ll need vehicle insurance for all of them. You’ll want third-party injury insurance as part of your policy, and you should also have comprehensive insurance that covers the vehicle if something hits and damages it.
Most companies that make physical products need product liability insurance. You’ll need your R and D department to do all they can to ensure your products are safe, but there are no guarantees that someone might not harm themselves during a product interaction. This coverage can protect you if and when that occurs.
Finally, you may need home-based business insurance. If you work at home, you should know that homeowner’s insurance will not cover inventory and equipment. You can get home-based business insurance that will.
All businesses need funding. We’ve spoken about how some companies can get away with not having IT support or an R and D section, but no business ever gets off the ground without capital.
There are so many ways you might secure the funding you need to start your business venture. You might borrow money from family members or friends. Sometimes this works, but you need to proceed with caution. If you can’t pay back the money as quickly as they would like, the person or people from whom you borrowed might not be too happy with you.
You can always approach a venture capital firm or look for an angel investor. They will probably only get on board with what you want to do if they feel like you have a strong business idea. You’ll need to develop a professional proposal that whets their appetite.
You might use your savings if you have any. If you do, you want to be sure you have a sound business plan. If you don’t, and you sink all your own money into it, you can end up with nothing. You’ll have to believe in yourself to take that risk.
You can also try crowdfunding. That works in some instances. You might get a small business loan if you approach a bank or credit union. Again, you’ll need to come up with a professional-looking proposal if you want the lending party to take you seriously.
What Else Does a Business Need?
Most businesses need everything we mentioned, or at least three or four out of the five. But what else does a company require for success?
That depends on the business model. For instance, you might need to develop an app for your business. You may need software that allows your employees to work from home.
Alternatively, you might need some physical store locations. You may need a place to create your physical products, even if you don’t sell them there.
You’ll want employees since you probably can’t do everything on your own. Because of this, you’ll need to learn how to hire and fire people, or you’ll need to get someone else to do that for you.
If you do plan to start a business, remember that you’ll have to dedicate a lot of yourself to it if you want to make it successful. That means you’ll need to take time away from your family, so you should prepare them for that. Of course, some businesses involve every family member.
Doing that sometimes works better than any other business model. While a company might not need everything we mentioned in this article, one thing is certain: if a family opens and runs a business together, they can all feel pride if it succeeds.