Many new businesses die before they've had a chance to live – in fact, experts believe that about 50% of new business fail within the first year and about 95% of them won't live through the first five years. Interestingly, many of the businesses that fail had wonderful ideas but they often falter at the altar of execution. However, you can improve your odds of success by taking some proactive steps even before you launch. The article provides insight into 5 things prospective business owners should think about before starting their business.
Think about the skills you have and the one you lackGoing into business requires more than just scrapping up a few thousand dollars and getting someone to call you boss. You'll need to be ready to sell your products and services, negotiate hundreds of deals monthly, and make some really hard decisions. Hence, the first step that any prospective business owner must take is to take time to access their strength and weaknesses. Knowing your strength and weaknesses will help you to optimize any learning or skill-acquisition you need to do and it could help you make the best hiring decisions from the onset.
The SBA has a business readiness assessment guide that could help you evaluate your experiences, temperament and your skills. You should also consider looking for a successful business owner who would be willing to provide you with mentorship and guidance as you prepare to undertake the entrepreneurial journey.[Image Courtesy of Public Domain Pictures]
Think about how you'll sell your products or servicesMany prospective business owners often fall in love with the idea of their product and services and they expect every other person to feel the same way about the products. However, in real life you'll need to get objective feedback about your products and service in order to gauge the potential demand. Getting feedback before launching will help you develop a product or service that people will actually be interested in buying. Objective market research will help you find a unique selling proposition in your sales, marketing, and pricing.
Think about how much money you'll needMany businesses often falter and fizzle out in the first couple of months or years after the ribbon-cutting event even before the business has had a chance to live and thrive. One of the biggest reasons for business failure is lack of cash because cash is the lifeblood of any business. You'll need to know much startup capital you need to execute your idea, how much running costs will keep the business alive, and how you'll handle your cashflow to avoid too many instances of a cash crunch. If you don't have enough money to keep your business solvent, it might also be a smart move to educate yourself on how to get business loans even before you launch. You may want to think about getting investors/partners on board in order to secure funding for your business.
Think about the demands of running a businessRunning a business is exponentially tougher than working a regular nine to five job. When you are the employee, you only need to show up, do the tasks expected of you, and punch in the clock. You can also expect extra pay for overtime and you should ideally have paid vacation. However, when the tables are turned and you are the employer, you'll most likely be working for most of your waking days. You might function like "normal" worker during the day, but most of your evenings and night will be spent agonizing over administrative tasks and other small details. If you are planning to start a business so that you can take control of your time and your life, you should know that the business will probably "own" you in its earliest stages. More so, you'll need to put in long hours, you won't have off days, and you would most likely won't get paid for your troubles at the start.
Think about the factors standing against youWhen you choose to start a business, you'll be up against a number of factors that would attempt to make it hard for you to succeed. You'll need to think about factors such as government regulations and municipality ordinances, state of the industry, getting a suitable location, building a reliable supply chain, and staying one step ahead of the competition. It is important that you think about these factors and mitigate the risks they might pose to your success even before you launch your business.
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