Continuing with the theme of last week’s blog, I’m going to dedicate the next three blog posts on each of the three types of business ownership I outlined last week: Starting Your Own Business, Buying an existing business and, Buying a franchise.
This week I will focus my blog on starting your own business from the ground up, and what that really means for the eager entrepreneur. As mentioned in last week’s post, this type of ownership comes with the highest level of risk and the steepest learning curve.
There are 101 things to consider before you get started. Entrepreneurs often underestimate the amount of time, effort, and capital that go into a start-up company. It is very important that one understands exactly what they’re getting in to.
The following are what I believe to be the 5 most important things to consider when starting your own business. Each of these should be at the forefront of your mind before any decisions are made.
A business’s success is dependent on a strong vision and solid business plan. A business owner must know exactly what their business and brand stand for, and where they would like to take it. Setting short and long-term goals (that are realistic and attainable, of course) is extremely important to track business progress and ensure success is measurable. If you lack a clear vision for your business, you may not be ready to start one.
As the saying goes, money makes the world go round. That could not be truer for someone starting a new business. New businesses require capital, and often lots of it. Be sure you work out just how much capital you will need to not only start your business, but also keep it going. Lack of funding is one of the most common reasons for business failure.
Think about who your potential customers are, and how you will turn them into real sales. Do you have a network of connections that could lead to prospective clients? If not, how will you build one? Are you prepared to do cold calling, pitches, and presentations? Unfortunately, the saying “if you build it, they will come” does not always apply in the business world!
You are starting the business, but you may not be the only person needed to run it. If you need staff, that changes your business plan and company dynamic instantly. Employees must be paid and managed, and that is a large responsibility for a business owner. If you find managing yourself hard enough, managing a team may not be possible.
Many small businesses start in the home. Think about how well you work with the distractions of a home office. Working from home does save the rent cost, but depending on the type of business, this could leave the wrong impression in the minds of your clients. What if you need staff, can they work from your home? Think about where your clients might be located, will you be close to their office? Where will you meet clients? If a client knows your office is in your home, then they may feel your prices should reflect this, as you carry low overhead costs.
If you have, or are considering, starting a business, have you tackled these important issues? Stay tuned to next week’s post for part 2 on purchasing an existing company! Let me know what you think in the comments!