Factors To Consider Before Starting A Business
- May 7, 2021
Almost every individual dreams about starting his/her own business. Starting a business is usually an exciting moment for majority of people. Are you planning to start a business of your own? Not sure how the road ahead is? Do you want a traditional store or an online store? It often feels like there are 1,000 things to work on all at the same time. it’s encouraging to start a business when you think about the freedom of not working 8-9 hours a day in a confined office, not having to report to a boss, and the possibility of endless profit.
It is just a desire to be on top of things that motivates many to start businesses. With all this excitement, it is possible for one to just jump into business without prior planning. Lack of proper initial planning can be devastating to the business owner(s) in the long run when the truth about the business environment sets in. Well, to avoid that these are some important factors to bear in mind when launching a business.
1. Research
What industry will you be involved in? What are the challenges? What are the resources needed? The founder of British Business Energy Ian Wright once said, no matter how unique you might think your business idea is, you should be aware of competitors.
There should be a strong research and development that should be undertaken. The presence of new technology, science and knowledge transfer from universities and public research centers to new and growing business, and the support for the creation of new technology-based ventures, are good indicators to start a business in this area.
After deciding whether you’ll do the business on a full time or part time, you will have to decide on the type of business structure to start. It could be a company, sole business, or partnerships. Each business structure has its advantages and challenges. Once you know what business you want to start, you will have to start gaining the required knowledge and expertise to start that business.
2. Knowledge or Expertise
Do you have the knowledge to start the business? Once you know what business you want to start, you will have to start gaining the required knowledge and expertise to start that business. This might take a lot of research, but at the end all these efforts will ensure that you have everything in place to get your business idea off the ground. Having a business plan can be highly advantageous at this stage. No business can develop fully in the absence of a business plan. Writing a business plan can help you determine if your idea is feasible and provide direction. With a business plan, you will be able to know every next step that should be taken.
3. Target Market
Once you are sure of starting your business, your next step would be to explore the market or the demand for your product or service. The demand is a vital factor to consider before starting a business. Who are your consumers? What particular product do they prefer? What after sale service do they appreciate? These are the things that you should consider. Start by answering the question, who are your customers.
If you plan to start a business and you know what to sell, before you begin, study if there is a market for it. Identify who your customers are. A market survey should reveal all the details that you may need about the market for your product or service. After that, you should tailor make your business to match up to the above factors. This runs from the business website, modes of marketing, and modes of delivery.
Social media has made it possible to reach out to our target audience, anywhere in the world, without having to put in too much of efforts.
4. Startup Capital
The Survival of a business without funds is not possible. Starting a business requires an efficient source of capital considering that some unexpected needs arise with time. Many things determine the startup cost of a business, such as the nature of the business. Means of financing is a critical factor one needs to consider before starting a business. There are different sources of capital that can be used depending on the needs to start the venture. Most times, small businesses will rely on personal funds at the initial stage of starting. Some of the options that one would consider would be getting money from family and friends, funds from your sacco saving, getting a loan from a bank, or even finding a willing investor.
5. Analysis of competitors
Unless you know who your competitors are and what they are doing, you will not be able to survive in the market for long. With this knowledge, you will be able to take appropriate decisions about your company. Their mistakes should be your strong points so as to outdo them. It will also help you in developing a much more effective strategy for your business. If the market is saturated with the type of business that you want to start, then be keen to develop the right strategies to be able to penetrate the market. Gaining a market share should be on top of your mind if you are about to start a business. If not you may have to strengthen the position of your business to gain an entry into the competitive market.
6. Location
Location is one of the most critical factors. Make sure you identify or look for the best location for your business. Your business must be seen by your target customer or at least near them. If yours is a retail business you will have to look for a well-populated area that is easily accessible.
If it is a manufacturing unit you can choose a location that can let you save money on electricity, water, taxes, and transportation. You can even look for a location that can get you rebates and subsidies from the government. Offices can be set up in any place that is accessible and offers good facilities such as parking spaces, refreshments, transportation, and so on.
Make sure the location fits well within your budget and offers scope for expansion. An ideal location would be one that complements your business in the best possible way.
7. Legal documentation
After considering all the capital and expense requirement, before you start operating, make sure you have the registrations needed to legalize your business. For the sale of some specific products and services, there are some requirements for the preparation of legal documents. Make sure you have already done all the legal documentations for your business.
8. Staff
The staff is like the heart of the company. Your staff members are the ones that can make or break your business. Their competency and effectiveness can go a long way to determine the company’s future and overall success. A good workforce is crucial to ensure that a business succeeds and stands the test of time. Without efficient manpower no business can ever succeed. That said an efficient staffing strategy needs to be in place if you want to reduce your staff replacement expenses.
You can hire a recruitment agency or use various recruitment tools to fill in your positions with the right talent. Apart from hiring the right staff there is also the training that you need to think of. This will ensure your staff members will be in a better position to handle their responsibilities and meet the expectations you have set for them.
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