You’ve had it with your boss, haven’t you? I can tell. And, now you are sitting at your desk, or standing behind your cash register, dreaming about that bike shop you always wanted to open, or the flower shop that is for sale on the corner of Main Street. Come on, admit it!
Did you know that the federal and state government reports on small businesses show increasing growth in new business ventures? That’s exciting!
But, you should also know that only one in ten businesses started today will still be in business 5 years from today. That’s discouraging, isn’t it? Perhaps so, but if you take the time to plan your new business venture and, more importantly, to really think about whether you are equipped to start a business, you can save yourself a lot of money, time and grief.
There are many books on this topic. I can’t condense them all into a short article, but I can give you some important points to consider. This information will get you started on the thought process and preparation and may further encourage you or discourage you to start your own business.
Let’s start out with a few questions about you, your resources, and your abilities:
- I can afford to quit my job and live on next to nothing for at least 3 years
- I can work part time and get my business going on the side until it takes off
- I have good credit so I can easily get funding for my business for inventory, salaries, etc.
- I am good at managing my time
- I like to train and manage others and I am good at managing people
- I always take responsibility for my own success or failure
- I have a network of contacts I can use to get supplies and services
- I have good negotiating skills
- I am willing to take risks to achieve my goals
- I know the value of a Business Plan and how to write one
- I am willing to work very long hours, including weekends and to forgo vacations to get my business up and running
- I can quickly jump from small tasks to larger planning issues
- I communicate and work well with others
- I can do my own bookkeeping and accounting
- I have the personnel, partners or resources to fill in the blanks where I don’t have the skills to do the job myself AND I will be able to afford to pay these people.
- I can communicate my passion for my business to bankers, lawyers and customers alike
- I am a good sales person
- I like to work hard
- I have enough assets or money to invest a reasonable amount in my own business
- I am good at problem solving
- I am not afraid to learn new things
- I know how to set goals and measure results
- I accept setbacks and keep on trying
- I can work on a ‘shoe string’ and I am great at managing money
- I understand the importance of marketing and know the difference between marketing and advertising for a small business vs. a large corporation
If you were able to place a checkmark next to more than half of these questions, you have starting from a position of some strength. If you were able to check 75% of the items, you are likely to do well in your business, provided you choose the right business type and the right location.
Here are a few other things you need to consider before you open a business:
- Is your business retail, wholesale, internet-based? Do some research to figure out what channel is best for the product or service you want to offer.
- How much competition is there for the product or service you intend to sell?
- How much money will you need to start the business for things like inventory, rent, advertising, business cards and office supplies, etc.?
- What kind of legal business entity will you start? Sole Proprietor, Partnership, Corporation? Do you understand the impact of this decision on taxes and accounting? If not, do a little research.
As you do your research, take notes. Capture your thoughts and questions on paper as they come to you and then sit down with a good business lawyer, a small-business accountant or a friend or colleague who has the skill to advise you.
Tell them your plan. See what they think. Starting a business is a very exciting idea to contemplate. Just be sure that you have thought about the issues you will face and that you are well prepared. If you are still convinced you want to start your own business, I wish you much luck on your journey!
Before Starting a Profitable Business
Before starting a business, you need to begin with some serious planning, and research. One should keep the important requirements in mind including, calculating the number of employees that would be required for starting a business, the number of hours needed for work, and the potential earning capability of the business.
Steps for a Profitable Business
Serious business people should perform market research before beginning a new business. They needs to calculate the financial requirements which are necessary to run the business in an optimum rate. An estimated amount will produce more output than investing a huge amount without rough calculation of the actual amount needed. A deep calculation of estimated earning through the business is also important.
Often, businesses don’t achieve their goals as the price of the output or product is always lower than the expected price to produce it. This often happens due to high competition among similar businesses. Many business cannot make the expected target even if the business runs perfectly.
Selling a product is more important than manufacturing a good product. You should investigate the demand and probable price of your product by developing a prototype through market research. You should go to other company’s locations, which are manufacturing the same product. You should ask the feedback of your product and feedback of other companies’ products.
Modify the product according to the need of the targeting customer. Taking advantage of others feedback will be helpful in improving your product. You can easily understand the need of your customers simply by going to a store which sells your product. By understanding the customers’ needs, one can reach the customer’s satisfaction. You should select the type of company structure that would be suitable for your business.
Don’t start with expensive assets that might impress, but draws temptation to others. Start with a smaller space and necessary important equipments which will minimize your initial investment. At the premature stage, control should be in your hand so that you can focus on different activities.
Start the business by distributing large number of business cards to make others aware of your businesses services. A website is also important which contain the information of your business. Create a simple one page flier to let people know about your business. It is necessary to make people aware the advantage of buying your product.
Starting a business is not an easy task and it needs well planed steps and experimental techniques to get maximum profit and growth.