Are you determined to be your own boss and have your own business? This can be an exciting endeavor and incredibly appealing if you plan on doing something you are passionate about.
It will most probably require longer working hours and a substantial investment of your time and money, but few things offer the same satisfaction as creating something from the ground up.
Nonetheless, there are several things you need to reflect upon before you start your new business to ensure you start off in the best possible conditions.
1. The Why Behind Starting Your Own Business
This may seem a bit banal, but motivation is crucial when beginning a new entrepreneurial activity. There will be numerous challenges as well as ups and downs. Are you passionate about what you plan on doing and is your passion strong enough to see you through the difficulties?
It’s easy to think that you want your own business, but can you see yourself doing this sometime down the road? Will you see through your idea until it grows? Knowing the reasons for founding your business and defining your mission, will facilitate future decisions.
2. Can You Make a Living with Your Business Idea?
While you may not be thinking about earnings initially, it is important to consider your prospects. If you have doubts about potential earnings, you may want to rethink your idea. The final objective of any business is to earn money and be financially viable.
3. Who Is Your Target Market?
When creating a business, you will be producing products or services for a target audience. It is important to identify your target audience from the get-go as the success of your marketing and advertising strategy will depend on it.
Unless you plan on producing a generic item or a common service that everyone needs, you will need to identify your niche market and focus on satisfying those clients. Understanding who your customers are and what they need will enable developing a loyal customer base.
4. Who Is Your Competition?
Unless you have a new invention, your idea for your business most likely exists in some form somewhere else. It may be a variation of your idea, but you will need to research these potential competitors. Only in this way can you find and offer something that sets you apart from the crowd.
Analyze every detail of their business from products and distribution to customer support. Note what makes their brand viable and competitive. Fully assess the market you will be competing in.
5. Make a Business Plan
A business plan will not only help you organize how to proceed, but it will come in handy when contacting potential investors or banks. Include your mission, a detailed description of your business structure, the products and services you will be offering, a target market analysis, a financial plan, and the biographies of any executives in your company with decisional power.
6. Do You Have a Unique Selling Point?
By identifying the competition, you’ll be able to determine what unique benefit you can offer your target audience. How is your product or service different, and potentially better? Can you offer it at a lesser cost?
7. What Is Your Marketing Strategy?
You will need a marketing plan to sell your product or service to your target audience. Where fliers, billboards, newspaper, and magazine ads were once the status quo, now digital marketing is obligatory. You will need a business website and a social media campaign to reach your target audience quickly and effectively.
8. How Will You Price Your Products or Services?
While you won’t want to overprice your products in order to remain competitive, you certainly cannot underprice them, or you’ll go out of business. Therefore, market and competitor research is vital to your success.
Once you have identified your potential competitors, note how they price their offerings. Are your products comparable or will you be offering the better quality or perhaps a more spartan economical option? When considering pricing also take into account packaging and eventual mailing or delivery costs if applicable.
9. Startup Funding
Getting any business off the ground takes money. To earn money, you will first need to invest some. This means that you will need to prepare a list of all the necessary equipment and services and the costs that you will need to launch your business.
Remember to include:
- licensing or permit costs
- insurance costs
- registering your company name and logo
- a business website
- packaging and mailing supplies
- advertising and marketing
- employees and consultants
- eventual manufacturing costs
Will you need a business vehicle for your services or for the delivery of products? In this case, you’ll also need commercial auto insurance together with fuel and maintenance costs.
Prepare a budget that includes only what you need to begin. You can upgrade after your business is on stable ground and growing. Research where to find necessary capital, whether among friends and family, investors, or from banks and financial institutions.
Although you may be concentrating on what you will need, also consider what resources you might need in case of an emergency (car repairs after an accident may take longer than expected). So use everything you have available in terms of equipment, location and logistics, savings, and time.
10. Do You Need Help or Employees?
It’s impossible to know everything when starting a new activity, so don’t hesitate to call in professionals for legal, financial, manufacturing, and marketing needs. In the long term, you’ll save money and time.
Determine from the start if you can manage your business completely alone or if you will need help. Perhaps you can find a business partner who shares your passion and enthusiasm for your business idea.
Will you need new hire employees and how many? You can start small and scale up your business as it grows.
11. Research the Best Legal Structure for Your Business
Depending on what you will be selling, select the best legal structure for your business to secure it and protect your person, property, and liabilities.
Determining if you will incorporate, select an LLC, or work as a sole proprietor will dictate your liabilities, your taxes, and your bureaucratic obligations. Also, keep in mind that you will need to meet local and state registration requirements to open your business legally.
12. Research Tax Obligations
Know your tax obligations before you set up your business. As a business owner, you will need to declare your earnings and pay taxes. Research municipal, state, and federal tax requirements for new businesses. Know when you need to pay taxes, the percentage you will be paying, and to whom you must pay.
13. Consider the Best Time for Launching Your Business
Finally, timing is vital. Launching a business at the wrong time can sound like a death knell. Depending on what you are offering, research when would be the most advantageous time to open.