When thinking about starting your own business, it is tempting to immediately jump into branding, logo design, accounting, and other operational aspects of the business. These things are all necessary, but there are a few things you should do before you get to that point, and they are not always things that are on the average list for business startups. Before you jump into opening your business, think about these 11 things first.
1. Solve A Problem
At the heart of every business idea is a dream and passion, but unfortunately passion and dreams are not enough. Only 78% of startups survive the first year. (1) The most common reason for failure is lack of sales. To be successful, you must have a product or service that fills a gap in the market. (2) The first questions an entrepreneur must ask are, “What problem does your product or service solve?” and “Why does your customer need it?” If you can not answer these questions, it may be time to move on to the next big business idea.
2. Examine your Motivations
One of the main reasons people want to start their own business is the desire to make more money. You may dream of becoming financially independent, or you may want to earn a little extra income each month. Regardless of your reasons, starting a business just to make money can be a big mistake. Most people do not realize how much time, dedication and energy they need to invest in starting and running their own business before they get started. Psychology has proven that money itself is not a motivator, but things like more freedom, more time with your family, or those big dreams are reasons to get you up in the morning and do what it takes to be successful. Do this before you get into the “how” of the business plan.
3. Learn, Learn, Learn
One of the common themes of top CEOs and some of the richest people in the world is that they all spend some time reading and learning. This is a process that never stops, and you should never stop learning either. This may mean keeping up to date with trends in your business and the latest technologies, learning more about marketing or other topics related to your business. This should be easy if you have a passion for what you want to do. Learning and personal growth are key to sustainability and business success.
4. Know Your Market
As a budding entrepreneur, you probably have great ideas for products and services, and it’s tempting to rush into the market with these wonderful ideas and inspirations, but this is one of the main reasons for failure. The first thing you need to do is to get to know your market, and not just superficially. It’s good to know their age group, income level, and geographic location, but to be successful, you need to understand their personality. The more you know about their drives, motivations, interests, and pet complaints, the better you can develop a product that meets their needs.
5. Simplify
It’s easy to dream big and want to do everything at once. You may want to start with a single store, but can envision starting a national chain at some point. This can lead to excessive growth, which is another common reason many businesses fail. (1) The formula for success, especially in the beginning, is to keep it simple. Start with one thing and do it well. Once you master that, you can move on to bigger visions and expansion.
6. Consider all costs
One of the most basic things that many startups overlook is how much small costs add up and how much they will affect the bottom line. Things like office paper and ink may seem like small purchases at first, but they add up over time. Also, consider how much time small interruptions and tasks play into your day. A five-minute phone call here and there quickly eats up your time, and that can cost you more than you might think.
7. Have a Backup Plan
If you have a steady job and your goal is to start your own business, make sure it’s a thoughtful decision. Of course, you would not want to start a business if you thought it was going to fail, but it’s always good to have a backup plan. This is in line with the old adage that you should not put all your eggs in one basket. This cliché still holds true when it comes to starting your own business. The best plan may be a conservative approach that involves working on starting your business while working your job as a steady source of income. Examine your schedule and daily activities closely. Is there something you could give up, such as watching a TV show or scrolling through social media? You may find that you have more time to work on your business than you thought.
8. Expect Challenges in the Beginning
The first thing you need to know is that opening a business is a learning process. You should expect challenges in the beginning, and by overcoming these challenges, you will learn how to run your business better. Through these challenges, you will learn more about your market, how to run your business more efficiently, and how to grow your business to achieve more stability in the future. You should not fear these challenges, but see them as an opportunity to do the best you can.
9. Learn the Basics of Advertising
Regardless of the industry you are in, you are also in advertising. Even if you think your business has nothing to do with advertising, every interaction with customers is advertising for your business. Your website is your storefront, and even if you offer plumbing services, you need to know the basics of what your website should contain and how to present your best self to the public. Not everyone needs to be an advertising professional, but every business owner needs to know something about it to be successful.
10. Keep it Legal
The first thing you need to do is find out about the requirements for operating a business in your state and region. The Small Business Administration is an excellent resource to find any information or resources you need before starting your business. By starting with this step, you can avoid difficulties and large penalties later on.
11. Do not be Afraid to Get Help
The biggest mistake a budding entrepreneur can make is trying to do everything themselves. Professionals are experts in their field for a reason. From accountants to web professionals, you can do everything yourself, but you probably will not do it as efficiently or as well as someone who has years of experience in that particular field. The Internet makes outsourcing services easy. Do not be afraid to bring in outside professionals to help you get the most out of your new venture.
These 11 points will give you a roadmap that will lead to your success. A major reason many businesses fail within the first year of startup is the failure to think about your goals and what makes you unique. (3) As you can see, there is much more to starting a business than just buying a website and opening the door to business. Taking the time to think about these 11 points is the best way to ensure that your business is successful in the long run and is the path to achieving your big dreams.
Sources
- Frequently Asked Questions, U.S. Small Business Administration, https://www.sba.gov/sites/default/files/advocacy/Frequently-Asked-Questions-Small-Business-2018.pdf
- 10 Tips For Starting A Small Business That You Haven’t Heard A Thousand Times, Forbes, https://www.forbes.com/sites/mikekappel/2017/07/12/10-tips-for-starting-a-small-business-that-you-havent-heard-a-thousand-times-already/?sh=a4a0cb56e19e
- Start Your Own Business, USA.gov, https://www.usa.gov/start-business
