Business is a lifestyle. You can indeed be flexible and choose the way you want to devote time and energy towards your venture. A great deal of flexibility and incredible responsibility makes a person completely independent. However, starting a new business has its own element of risk. Moreover, the entire process is daunting and challenging.
Though, many people begin a business as they feel that it is something that they like to do the most, fail miserably because of many reasons. A commissioned study about the startups states that on average 2 to 3 companies have started per day and 80% to 90% of the companies vanish within 5 years. Out of which, 70% of the companies failed due to improper approach towards the business.
Starting a business is an adventure. Only a few people can ride against the tides. Of course, you can be the Boss of your business venture. You have job satisfaction and it improves the standard of living too. But,
- Did you analyse if you have the right skill sets to start the venture?
- Nor did you measure the number of responsibilities you need to carry?
As such, there is certainly no guarantee that you will receive the paycheque every month. There will be sleepless nights. A lot of time, you will end up thinking a lot and devoting time to plan for the future of your business. Startups require you to work harder than the established enterprises.
You need to be immensely confident, and satisfaction is guaranteed once you are so. The desire for growth must be the driving force too. Learning becomes an inevitable part of starting and running a business and it is never-ending too.
You must devote a lot of time while starting a business. Beginning a business venture is considered tough by a lot of people as the amount of time required to research the product or service viability is immense. Adding to the research, understanding the competitor market analysis is a time-consuming task. It is always advised to devote a considerable amount of time in deciding and planning to start a business.
Firstly, decide if you are fit for starting a business. Secondly, plan your lifestyle to sacrifice a few things to achieve eternity.
Lastly, read this block completely to get exceptional action tips to start a business. Additionally, you will also learn the mistakes new businesses usually make.
Does Business Suit You?
Running a successful business is a challenge in itself. Most of the business owners, once they fail do not get into employment. While we saw the business statistics about startups, globally one out of 5 companies fail within 2 years. The primary cause for the failure is a lack of knowledge and a complacent attitude towards business.
The thumb rule is, if you are aiming at success in your business, you have to be a step ahead of your competitors in the market.
Are you ready to face it? This is the biggest question you must ask yourself before beginning to start any business.
Ability and Resources – An Assessment
The key aspect to assess is your ability and the availability of resources to start the business. The primary attributes to be successful in business are
- Mental Energy
- Physical Energy
If you think you have the above mentioned, then move on to reading the rest. These are the requisites of an entrepreneur. All these 5 factors must function in synergy all the time. You can assess these elements by analyzing your past. Think of instances where your determination played a pivotal role in your career success. Do not negate personal instances too. Think about the way you have responded when you are stressed. Have you ever put on a night out just for professional reasons? and started working the next morning with zeal and enthusiasm?
You can additionally talk to your close ones in order to understand your abilities. Of course, assessing the weakness and knowing your strengths stands strong to realize if business suits you the best. Evaluate your abilities by talking to experts as well. Simultaneously, analyse the available resources.
Start answering the questions mentioned below
- Are you financially stable to run your business for the first year, at least?
- Do you have the necessary resources to run your business for the first year?
- Have you understood the demand for the product or the service in the market?
The answer ‘No’ or any ‘negative’ response for any of these questions or abilities is not a sign to shut down the thought of starting a business. But, it is a realization of self and you must start working on those areas diligently. You need to be realistic about your abilities and resources. Finally, determination and hard work to overcome difficulties can bring you success.
Follow Government Rules and Abide by the Law of the State
The license requirements for your business must be handled carefully. You must have the necessary knowledge on licenses, permits, grants and tax registrations for you to set up your business.
- Do you have the required resources to get it done?
- Are you willing to wait until you get all the legal aspects satisfied?
If you are in the IT industry, the software will require regular license updates. You must have an appropriate tracking system for all the licenses and permits to be renewed.
Take advice from legal experts initially and list down all the requirements. Check if it can be done in your country at the pace you wanted.
Finally, check with law statements if the business you intend to run is legal in your country.
Test Your Skills
It is an advantage to have relevant and additional skills while you start your business. If you are hoping to be a successful entrepreneur, then test your skill sets on the below-mentioned aspects.
- Technical Skills
Any business would require technicalities to be handled from time to time. You must have the skill and knowledge of the product or the service, you will be able to take the business off the ground. At the same time, the required qualification for your business based on the country and government norms becomes mandatory too. For example, if you are planning to start a law office, you must be a lawyer to do so. If you do not have the relevant qualification as per legal norms, you must have the resources to identify one to be employed in your firm.
- Business Skills
Organisation skills can be learned. At the same time, basic business skills are always available in humans. Think about your life earlier and see if you have negotiated well, or have organized a program or an event successfully. Check if you have the right team spirit. Nevertheless, the niche business skills can be inherited through proper training and practice too. But, the necessary requisites as mentioned in this column must be sufficient for you to ascertain if self-employment suits you. However, gaining deep insights into business and acquiring the necessary skill sets will help you in the longer run.
There are other skill sets which you require as well; Leadership, Selling, Administrative skills. Analyse if you have these or get trained to gain these skills. Embed these skills in your daily life. It must not be just on job, these skills make you a better person in society as well.
Once you are done analyzing the mentioned factors, and confident of starting a business, you can take the next most required step; Talking to People Whom You Know
- Inform | Seek Advice | Give Confidence
As said earlier, business changes your lifestyle. And there are people involved in your life. Keeping them informed about your decision is one side, involving them to take that decision to start a business is on the other. Business is certainly not an individual activity. Your decision might impact your family members. Talk to them and make them aware of the idea that you have. Look for their response. Check if they can support you in the journey.
Talk to your colleagues the same way. Though they are not affected directly by your decision, talking to them shall give a lot of ideas about your business too. You may not know, a friend of yours might join you in your business venture.
Seek expert advice about your business. Involving them in your business idea will give you immense confidence. You must invest in involving such people in your business. Do not hesitate in this involvement. The people whom you talk to must be in business already. Talking to them and seeking their suggestions will be of great support in your journey.
3 Crucial Footsteps to Start a Business
You already have the product or the service in mind by now. The action plan mentioned in this column is of paramount importance to give a flourishing start to your business. Let’s quickly see each step in detail.
Step 1: Market Research
You must first identify the reasons why your customers will want to purchase your product or service. Ascertaining the target market and the market preferences will be of immense help in strategizing your business plan in the next step. By doing market research you will
- Learn consumer purchase preferences
- Learn customer spending habits
- Learn the average expenditure made by the customers on the product or service
These pieces of information are vital for deciding your offerings to the customers. Also, you can decide on the price as that would be the deciding factor for the customers to get attracted.
Salient Research Areas
- Know the Market: Learn the market thoroughly to see how your business will perform. Take a look at the industry reports and go through the journals to understand the current and future trends for your product.
- Know the Customer: You must understand your customer base; their age, educational background, location, occupation and so forth. The demographic information of the customer will help you offer the product at the right time and for the right price.
- Interact with Prospects: This is a step most of the new businesses fail to facilitate. Once you have identified your prospective customers, interact with them. Get to know their needs, the current shortcomings, the budget preference.
- Know Your Competitor: Compare familiar and similar products that the market already has. Learn from the existing customers as to how the product or service is performing. Understanding the landscape of the business shall teach you a lot of aspects. Learn how one has succeeded and gained insight into how one failed.
Sell Your Business Idea
Once the research is comprehensively done, test your product by selling it to very few customers. You can also offer a service for free if you feel like it. The main idea behind this is to get customer feedback. Learn how they feel about your product or service. You can understand the nuances and enhance the product or service if need be.
Step 2: Sketch Your Business Plan
It is the fundamental building block of your business. A comprehensive business plan is the heart of the organization. After sketching the plan, at any point in time, if you are stuck, you can look back to the business plan for clarity. The first and only factor to be pointed back is the business plan, be it a success or a failed business model.
Your business plan can be a lean startup model or even a traditional model, the below-mentioned factors must be available in it.
- Vision and Mission of your company
- Executive Summary – includes company’s value proposition, leadership team details
- Company Description – Describes the problem you are planning to solve with the help of your product/service
- Organisation and Management Structure
- Service or Product Line
- Marketing and Sales Plan
- Financial Requests
- Financial Projections
The pivot of the business plan is, what is it you are bringing to the market and why is it compelling for the customers to purchase. Keep that in mind while sketching the business plan.
Step 3: Create a Business Structure
This is imperative for a new business as it saves you from a lot of legal problems. It is suggested earlier in this block to be ready with all needed licenses and permits. But the business structure enunciates the fact that you belong to the business but you stay aloof from legal troubles, if they may arise.
For example, many new business owners prefer to be sole proprietors. While this is a good idea, but the worst thing that you can do to your image in the market. A sole proprietorship means doing the business just to earn money for yourself. You can as well set it as a Pvt. entity or even an LLC. Moreover, tax rate deductions are possible if you are not the sole owner of the company. Create an entity. It can be a trust also. We suggest you set a trust and allow it to operate the business. At any point in time, even if you are going to sell your business, it will be easy.
Always keep your things away from the business. Alienating the intellectual property of yours from the business also helps you in several ways. Take a look at the company law in your country. Also, map it with the grants you can get from the government or even the banks. Name your company appropriately to avail of the benefits.
Super Six Reasons why New Businesses Fail
Another staggering statistic shows that only 25% of the businesses will survive more than 15 years. More than 20% of the new businesses fail in the very first year. This column will highlight the mistakes that you would not commit.
- Not Enough Time Devoted for Market Research
- Improper Business Plans
- Not Assessing the finance and resource availability to run the business
- Bad Marketing Strategies
- No thought of upgrading the product or the service
- Thoughts of Fast Expansion
Final Advice: Tremendous Twenty
- Self Assess yourself before beginning the journey: Know Yourself!!!
- Be the Person for any job that you do in your business; Be an Example
- Communicate with Family and Friends; Keep them Informed
- Generate regular Cash Flow from your business; Cash is King
- Develop as a perfect legal identity; Don’t Overdo the Basics
- Hire professionals to be powerful; Right Man at the Right Seat
- Get expert Opinion Always; Learn from the Masters
- Take care of your employees; Nurture to Be Victorious
- Build a massive Business Plan; Set the Launchpad
- Watch out for your competitors; Imitate their Successes
- Be Flexible in Business; Flexibility Creates Freedom
- Expect Failures; You Can’t do it Right all the Time
- First Attempt May Fail; First is Worst
- Follow Government Norms; Don’t Break the Rules
- Keep Reserve Funds Safe; Winter Period Needs Cash
- Be Prepared for Huge Success; Never Underestimate your Business
- Help your customers; Educate them Wisely
- Overpower Emotions by Logic; Emotions Deceive
- Assess the Risk always; Be Prepared for the Worst
- Celebrate All Successes; Keep the Environment Electric
There will be challenges in this journey. You may have to work without getting paid for months. You must practice being courteous and nice even if you do not feel like it. You must practice diligence and patience. But the outcome of you becoming a business owner can see a sea change in personal life too. You will start being more organized than ever.
The network of people that you associate with may widen and will be in contact with high profile people too. The bad times will always have a light of hope. Follow that pathway, All the Best!!!
The first step in starting a business is to research and decide on your business concept. This includes assessing the need for your product or service in the market, the potential customer base, and the competition.
Common mistakes made when starting a business include not having a detailed plan, not being realistic with finances and sales projections, not conducting proper market research, and not having a clear idea of how you plan to differentiate your business.
The type of legal entity you choose for your business will depend on your specific situation. Generally, common legal entities for small businesses include sole proprietorships, partnerships, LLCs, corporations, and non-profits.
A business plan should include the following elements: description of the business, market analysis, competitive analysis, organization and management plan, marketing strategy, and financial plan. Resources to help create a plan can be found at Small Business Administration (SBA) or your local Small Business Development Center (SBDC).
There are a wide variety of resources available for entrepreneurs, including local and national business resources, such as state and federal agencies, incubators and accelerators, trade associations, and more. The Small Business Administration (SBA) is an excellent starting point.
Attracting investors will require preparation and effort. Start by building a complete business plan including executive summary, market analysis, competitive analysis, and financial plan. Create a professional presentation using PowerPoint or Keynote. Make sure you know the answers to common investor questions, such as your product or service description, target market, competitive advantage, and financial projections.
Funding for your business may come from a variety of sources, including friends and family, angel investors, venture capitalists, banks, government grants and loans, and other sources, such as crowdfunding.
Depending on the type of business you are setting up, the paperwork you need may vary. For example, if you are setting up a sole proprietorship, you may need to register your business name with the appropriate local authorities. If you are creating a more complex legal entity, such as an LLC, you may need to file Articles of Organization with the state and obtain an Employer Identification Number (EIN) from the IRS.
The type of insurance you need for your business will depend on the type of business you are starting and the number of employees you have. Generally, a small business will need general liability, property, and commercial auto insurance. Other types of insurance may also be necessary depending on your business type.
The benefits of owning a business include having the opportunity to pursue your passions, the ability to be your own boss, the potential to make more money, and the satisfaction of seeing your own idea come to life.