Starting and running a business is often overwhelming, especially for first-time entrepreneurs and employed individuals looking to escape the 8 am-5 pm employment. Most people venture into businesses in a bid to enjoy the freedom and flexibility of not working every day in confined offices, not reporting and adhering to strict rules, and the potential of making endless profits.
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Unfortunately, despite the relief brought by starting your own business, the entrepreneurial journey is stressful and challenging. That said, take note of the following factors before starting your small business.
Identify the Nature of the Business
Identifying the nature of your business is the first step to a successful business idea. Categorizing your business will make it easy to draft a business plan and lay out other strategies that will contribute to the venture’s success. Generally, you can choose to run a business under the following categories;
- Service provision – this involves selling time and expertise. Businesses included in this category are professional consultations, event organizers, marketing, IT, restaurants, food kiosks, salons, spas, and more.
- Manufacturing – as the name suggests, it involves processing raw materials into saleable products. You can manufacture gadgets, clothing, cars, daily essentials, and more.
- Merchandising – involves retail, trading, wholesale, and distribution. Examples include department stores, online sellers, and retail outlets.
Do Your Research
You should ensure that you understand the industry you are getting into before investing. Regardless of how unique you think your business idea is, be wary of competing businesses already operating in the sector. Just because your idea is brilliant, it doesn’t mean other people haven’t thought of the same before. As such, for assured success, make sure that you offer something better and relatively cheaper than your competitors.
Research should also include the target market. You should consider the target demography, as they will be the driving force in your business decisions. Without proper market research, you can’t be able to make profits or grow your venture. You should also ensure that you deliver exactly what your customers want. Therefore, proper research and insight into your target customer’s buying habits and purchase decisions are prudent. This will save you from experimenting with a lot of products after launching your business.
Create a Business Plan
Every business journey often begins as an idea. As an entrepreneur, you should find a way of bringing the idea to life. The best place to begin your entrepreneurial journey is drafting a business plan. The plan should outline your business in detail, including the challenges that you anticipate to face.
For instance, if your business involves creating an app for graduating health professionals, your business plan should outline the logistics involved in designing the app and tips you will use to meet your target market’s needs. While there is a lot to consider during this stage, you shouldn’t have the answers to all the questions immediately. Your plan should basically be an outline for making your preconceived idea a reality.
Note the Legal Aspects
Another crucial thing to note when starting your business is establishing a legal structure. Some of the essential legal aspects to note include taxes, essential paperwork, employee details, and other liabilities.
You should also ensure that you find all the necessary registration from the government and local authorities. This includes articles of incorporation, employer identification number, and other essential licenses, which vary by industry and state. To ease the legal aspects, it is prudent if you engage in legal services.
Organize Your Finances
Starting any business certainly needs some capital. If you don’t have enough money right away, you should find alternative ways of finding capital. Some entrepreneurs start their businesses with limited capital, which is a hurdle that restricts business growth and the quality of products and services provided. Fortunately, there are a plethora of financing options available for budding entrepreneurs.
Capital from friends and family is the first place you can seek help. With a well laid out business plan, you can also approach potential investors and venture capitalists for help. If all these options fail to provide enough capital, you can opt for business loans from small corporate associations and banks.
Another easy option for raising capital for your business is changing your business formation. Even after identifying what you want to sell, target customers, and where to start the business, you can change your formation from a sole proprietorship into a partnership or corporation. With this, you can find alternative ways of acquiring capital and share business risks as well.
Starting a business is undoubtedly exciting, but the journey can be daunting. Therefore, you should conduct thorough homework before starting. Unlike other establishments, businesses have no guarantee of success, and there is no way you can prepare for obstacles you might face along the way. However, despite entrepreneurship being challenging, a successful business is highly rewarding.
Prepare adequately by considering the factors mentioned above.