So, you have decided to ditch the idea of working a regular nine to five job and take the plunge into entrepreneurship. But, it isn’t as easy as you may think it to be. Almost no level of business assignment can prepare you for all the hurdles that you may encounter while starting your own business. No wonder 22.5% of small businesses fail within the first year.
Here are the eight major tips you should keep in mind before starting a business. These tips will help you take your entrepreneurship to a whole new level and guide you through the hurdles you may face. Despite the challenges, there are almost 582 million entrepreneurs in the world. I don’t see why you can’t add up to this number.
- Start small and aim for growth
Most entrepreneurs are usually tempted to opt for loans for a strong financial backup while starting their business. Wouldn’t it be better if you could save up a substantial amount of money and self-fund your business idea at least for the initial years? You can ask for funding when the growth story of your business is ready.
The advantages of self-funding are:
- You don’t have to waste time securing other forms of funding when you can use that time to get the important things done.
- Self-financing means you have control over how you want your businesses to run without having to pay heed to any investors.
- You will also receive 100% of future profits.
- Understand the nitty-gritty of the market
Let’s say you want to run an apparel business. But what do people prefer these days? What if you sell little black dresses, but the trend is sheath dresses? Conduct thorough research regarding the demographics and buying pattern of your potential customers. Know your market first before you go ahead and invest in products. Keep a close watch on your competitor’s strategies and read your customer’s reviews about them on social media. It is only if you know your target audience that you can bring forth the right solutions for them.
- Determine your target audience
Whether you run a pharmaceutical or academic business, your ultimate motive should be to generate quality sales. And you can achieve that when you bring forth your products to people who really need them. After all, the target audience is the driving force in each decision you make.
Here’s how you can determine who your target audience is:
- Check out our competitors– Look at the competitors who share the same target audience as you. Evaluate their brand voice and the types of marketing strategies they use.
- Create a customer persona– Create a rough outline of your ideal ‘target audience.’ Then tailor your services or products based on that outline.
- Employ the tactics of social listening– Know what your audience members are talking about on various social media platforms.
- Settle on a legal structure
According to Mason Cole of Cole Sadkin LLC, choosing a proper legal structure is essential for starting a business hassle-free. She also said that this structure dictates the paperwork, taxes and other legal aspects. You never know when you need an attorney for some serious pesky legal matter. Also, you need to get the local and state registration done required to open a new business.
- Map your finances
You must keep a strong grip on the numbers that indicate your business’s performance. Always keep a check on your start-up costs, projected profits, sales and much more. Personally, I would suggest you all read articles related to business economics to make sure you make the right financial decisions even in times of crisis.
It is normal if you don’t have enough time that is required to start a business with. In that case, you need to seek out ways to acquire the capital. Talk to your friends and family first to see if they can help you with the funding. Expand that search to investors and venture capitalists if the funding is not enough yet.
- Assess the risks
Businesses often fail. But, that doesn’t mean you will shut everything down and let your dreams astray. However, you can assess the possible risks and tailor your business plan accordingly. Understand, calculate and then take the right steps for managing the risk that you may encounter.
Here are the seven most common risks businesses often encounter:
- Security and fraud risk
- Compliance risk
- Economic risk
- Financial risk
- Operational risk
- Reputation risk
- Comfort or competitor risk
- Build a business plan
A business plan is essential to launch and run your business successfully. By this step, you know who your target audience is and what are the trending relevant products in the market. So, now it’s time for you to create a robust business plan and focus on your business better. A business plan encourages you to put your best foot forward with other experts in your industry. Instead of feeling confused in times of crisis, it is better to simply follow a plan.
Here are the components of an ideal business plan:
- Your mission statement
- A short business description
- An analysis of the current market opportunities
- A list of services and products
- Your financial plan
- Surround yourself with professionals, mentors and advisors
You may not know everything going in the industry. But, you can’t let your competitors take advantage of that. So, tap into the experience of relevant professionals to ensure that you start on the right foot. Having a legal advisor is important. Similarly, you need a web designer, web developer, financial advisor, etc.
You will find different free workshops, templates and webinars specifically designed for entrepreneurs online. LinkedIn is the right site for you to build a strong network of professionals who belong to the same industry.
Starting a business isn’t everybody’s cup of tea. But, if you are focused and smart enough, you can build a successful business in 3-4 years. It is better to self-fund your start-up without relying on loans and investors. Start small, surround yourself with the right people and keep your mission statement in mind.
Alley John is a legal advisor at a reputed firm in the United Kingdom. He also offers academic writing service to students at MyAssignmenthelp.com. Alley loves to spend time with his kids whenever he is free..