Things to Consider Before Starting a Business
Almost everyone has dreamed of being their own boss; but considering that 50% of new businesses fail within the first 3 years, it is vital you are well prepared before following your dream. Make sure that you know the answer to the following important questions before you even think about starting a business.
Is There a Market for Your Idea?
Coming up with a good idea for a business doesn’t necessarily mean that it will be successful, as someone else may have had the same idea and already put it into action. Depending on your idea, your target market and how much competition there is, you may need to come up with a new idea or at least a slightly different angle. Regardless, before you go ahead and launch your business, be sure there is plenty of evidence that your idea is unique enough to attract its fair share of the market.
What is your business plan?
Once you know that there is a market for your brilliant idea, the next step is coming up with a great business plan. This will ensure that you are starting your business on solid ground rather than jumping straight into the deep end unprepared. Creating a business plan will provide a wonderful opportunity to flesh out your idea, making it easy to see where improvements can be made. Your business plan can also be a persuasive and effective tool to help you secure financial support if you need it.
Do You Have the Skills?
A lot goes into running a business, and unless you can afford to hire help you will need to do the majority of the work yourself. Picking up a few new skills before launching your business will significantly boost your chances of success, so identify a few of your weaknesses and turn them into strengths. Be honest with yourself about your limitations; take a course or two or at least seek out some advice, as this will benefit your business far more than pretending that you know it all already.
Is it Legal?
Before you get carried away with your fantastic business idea, first make sure that it is legal, as there are often restrictions on what a business can and can’t do or licences that you may need to get. Find out about any relevant laws and regulations and be sure that your plans are compatible with them. If you are confused or unsure about any aspect of the legality of your plan, don’t hesitate to talk to a lawyer.
How Will Your Business be Registered?
In order to operate legally, every business needs to be registered as a type of entity and each type have different laws and regulations pertaining to them. The two most common types of business entity are ‘Sole Trader’ and ‘Limited Company’; and the main difference between them is the degree to which you will be considered liable if your business gets into any trouble. It is wise to get both legal and financial advice before deciding on which path to follow.
Do You Need a Website?
Regardless of the type of business you have in mind, chances are good that you will need a website, as these days the vast majority of people seek out their products and services online. It is worth investing some time and money to ensure your website clearly articulates who you are and what you do, as well as being user friendly and memorable. It is also important that you regularly update your site in order to encourage repeat visits.
How Will You Finance it?
Unless you are independently wealthy you are going to need financial backing to get your new business off the ground. Whether you plan on getting a loan, securing a small business grant or convincing investors to jump on board, make sure that you have a solid financial plan. If you are having trouble getting financial support, start your business small, as once you have shown that your idea works you should have an easier time attracting investors.
What Will Your Market Route be?
For your business to succeed you will need to find a way to get your products or services to those who want to buy them; and the best way to do so will depend on what type of business you’re in. Before deciding on how you plan to sell, consider doing some market research to find out how, when and where your target audience tends to shop. Whether you choose to sell at the local market, on eBay or set up a store in the local shopping centre, make sure that it will be easy for potential customers to find you.
Do You Need Support?
Regardless of how talented you are and how brilliant your ideas might be, you will more than likely need at least a little help to get your new business off the ground. Having an accountant, a lawyer or even some part-time staff can make all the difference, and don’t be afraid to ask those great friends of yours to give you a hand if you are stuck. As much as possible, try to predict well in advance when you will need support, as this will make it easier to budget as well as to make the most of the help when you have it.
When Should You Quit Your Day Job?
Having a reliable income can make a huge difference when starting a new business, so as exhausting as it may be to work two jobs it is wise to continue doing so until your new venture finds its feet. Avoid the temptation to work on your new business during time that someone else is paying for, as apart from being dishonest it will be risking your only stable income. Once your business starts to thrive, quitting your regular job will be far less of a financial risk; and at this point your new project will likely need your time far more than your money.