4 Questions You Need To Answer Before Starting A Business
Whether you are starting a business with no money or you have a decent amount of capital for your idea, starting a business is very easy these days. There is a greater variety of industries that you can get into and a much larger pool of clients that you can service. Before you risk your time and money, these are some important things you should first sort out.
1. What Do I Do Better Than My Competition?
Chances are that there are other people out there providing the same product or service that you intend to provide. In order to stand out from the rest, you need a competitive edge that will motivate customers to choose you over the competition. It might be just as simple as providing the same product with more options (for instance, more colors) or it could be as complex as engineering a completely new alternative.
If you are bringing a completely new product to the market then you need to know whether people are even interested in your product. Doing good market and customer research before launching the business will help you in getting to where you want to go faster and with fewer setbacks.
2. Are All My Bases Covered?
In the past, to start a business you just needed a tax number and a registration with your local council. Today, there is a lot more to take care of. Some of these things will be local requirements, others will be national registrations and requirements of stakeholders. For instance, is business insurance compulsory for the industry that you are getting into? Do you need to insure your employees and capital assets as well? These are all important factors to consider before you start operations since it can cost quite a bit if you don’t adhere to the right guidelines. Get a quick consultation with an expert in the field to learn everything you need to start off on the right foot.
3. How Will I Scale?
Eventually, you want to build the business. If you are doing $100K in revenue in the first year you want this to grow the next year and the year after that. For most businesses, this will either require more hands-on deck, or it will need greater investment to complete the necessary expansion. You should at least look into what kinds of investment options are available for your business or your industry. In some cases, there are government funding available and different programs that cater to small businesses in specific industries. These are far more cost-effective than traditional financing. For instance, if you are in agriculture there are a number of programs that provide you with the necessary equipment you need and even give you access to experts to learn how you can optimize your operations.
4. How Will I Retire?
Starting a business is a difficult task. You are working round the clock and you may have to play many different roles. Eventually, you want to be able to create a business that lets you take a break without operations being adversely impacted by your absence. Look into how successful businesses in your industry operate and this will show you the most efficient way to scale if you want to at some point take time away from business operations and just focus on yourself and your family.
Given the allure of starting a new business, a lot of people tend to get caught up with achieving short-term gains. When it comes time to scale the business or grow in a different direction they have invested themselves so heavily into their current structure that pivoting from the current path becomes very challenging. By having your eye on the horizon and always staying open to things that are happening outside your field of vision you can better prepare yourself for the unfettered success that your business will experience in the long run.
