If you are thinking about starting your own small business, you‘ve probably heard by now what a demanding and stressful venture it may be, with no guarantee of success. The fear of failure is the top reason why many people never dare to follow their entrepreneurial dreams and get stuck daydreaming about it instead.
Here are 5 important things you need to consider before you start a small business.
Think about the personal timing
There are numerous reasons for getting into the entrepreneurial journey – it may be a great business idea you want to develop or a flexible job you want to grow for yourself. Still, no matter the motivation, focusing on such an enterprise will consume all your time, money and energy for the next few years to come. That’s why it is extremely important to consider the right timing as one of the most important factors of startup success.
First, think about your professional resources – do you have enough knowledge and skills to reach your goals? Secondly, try to be realistic about your resources and make sure you will be able to devote all your attention to your business plan execution. This may mean working from 60 to 80 hours a week, or investing your personal funds and being financially unstable for a while, as well as having no personal life. Ask yourself whether you are ready to fully commit, and don’t face challenges unprepared.
Test your idea
One of the first steps to take when starting your business from scratch is thorough research of the market. You can start by getting to know your potential customers, in order to determine whether the solution you’ll be offering addresses their true pain points. To be able to do so, you need to have real, face-to-face conversations with your prospects about your business idea, and take seriously any feedback you get about improving your solution to better fit their needs.
You’ll also need to get to know your competitors. Try to look into solutions they are providing, and to spot their flaws. This is also a great time for you to determine how you will differentiate your start-up from your competitors – will it be the price, excellent customer support, or a whole new approach to your customers’ challenges?
You need a plan
If you need to seek external funding for your start-up, a business plan will often be required by your potential funders. But, even if you have enough money to begin your journey, you shouldn’t underestimate the importance of a business plan and jump into entrepreneurial waters without one.
Your plan will be your guide when making important decisions and give you a clear insight into what steps you need to take in order to fulfill your business goals. For example, if you’re wondering how to register a business, you first have to determine which business structure is right for you, and having a comprehensive business plan will help you with that. As a reference, you can learn more about forming your own company by reading this article on how to set up a company in Singapore.
Your business plan should usually consist of:
- Executive Summary – a brief recap of your plan
- Opportunity – overview of the problem and solution you offer, your target customers and competitors
- Execution – how you plan to turn this opportunity into business (this will contain marketing and sales plans, metrics you are going to follow, etc.)
- Company and management summary – who you will employ, your company’s legal structure, etc.
- Financial plan – personnel plan, the income statement, forecasts for your sales, etc.
The depths you will go into when creating your business plan will depend a lot on its purpose. But even if you are making the plan only for yourself and your closest associates, keep in mind that the more details you include now, the better your chances are to avoid the most common traps and deal with massive shortcomings along the way.
Get support
Although many people are prone to think about entrepreneurship as a one-man-journey, for your start-up to succeed, you will need to have the best support. Be sure to spread the news about your business among your family and your friends, as some of them will have a relevant experience to share or a potential customer they will gladly recommend you to and get word-of-mouth going.
Many areas, such as finance, analytics, and legal framework can be tricky and have serious negative consequences if not addressed properly. Expert advice can make all the difference when it comes to the success of your start-up so consider getting some professional support.
Think about funding options
Once you’ve made your business plan you’ll have a pretty good idea on how much money you need. After you’ve made sure you’ve got your living expenses covered, you might find out that you need external funding.
From personal savings to startup loans, angel investors, venture capital, crowdfunding and bootstrapping, there are numerous options for those who are trying to get started on their own in the business world. Every option has its own benefits and drawbacks, and it’s own part of the bargain, so a thorough analysis is needed before making any decision.
So, if you think the time is right, don’t let the fear of failure stop you from living your dream and growing your business along with you. Dive into the market, research it and make a plan on how to give your unique, best value offer. With the right support of your friends and family, as well as the expert advice in more challenging areas, you’ll see your small business thrive.
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