Whether you’re making the leap from hobby to a home business or you and a group of partners are pooling resources to launch a company, Starting A Business is exciting and terrifying at the same time.
It’s a big commitment, and you’re probably going to work harder at being your own boss than you did working for someone else. But, being a successful entrepreneur is the sweetest reward for all of that hard work.
When everything is at risk, it’s essential to cover all bases. Many small businesses fail during the first year due to a lack of planning or unforeseen problems.
With enough tenacity, you can overcome anything. But, it takes more than perseverance to launch a successful startup. Read on to learn more about five essential things to consider before starting a business.
1. Finding the Appropriate Niche
One of the first Starting A business orders should be to calculate the demand for what you have to offer. If you’re breaking into an already saturated market, such as health aids, you need to find a niche that is under-served within that market (or at least a unique selling proposition).
Conduct market research that includes surveys of consumers to find out what’s missing in your industry. From there, you can create a business that’s suited to meet that demand.
For example, if there are three beauty salons in your area (not overbooked), it serves little purpose to open the fourth one.
You can also learn a lot from reading customer reviews. Look for comments like “I liked this product, but… ” to find ways to serve better or address customer pain points.
2. Researching the Competition
Smart entrepreneurs know that part of doing thorough research is to check out the competition. What are they doing right, what kinds of social platforms are bringing success, and most of all, where are they missing the mark?
Your market research should also include:
You know your Industry:
It includes obtaining relevant information on your industry or sector and related industries and market trends that could affect your sector.
You are Conducting a Product Evaluation:
It would help if you had a deep considerate of how your product or service is supposed to work and align your marketing strategy to position your company to address the needs and habits of consumers.
You are Analyzing Trends:
Obtain data on consumer and market trends as they relate to your industry and product or service. It includes looking at your analytics for sales and outreach numbers if you already affect the market and analyzing sales and other metrics for competing companies.
3. Creating a Solid Financial Plan and Budget
Unless you’ve been saving for years or reaping a windfall from the lottery or a long-lost relative, opening a business will mean incurring at least some debt.
Your goal should be to minimalize the amount of debt you begin with by:
Creating a budget and targets by quarter and business year
Debating whether to purchase or lease office and other equipment
Taking on partners or investors
I am investigating low-interest small business loans and grants. These are available at the federal, state, and local levels. Check into assistance for specific sectors, such as energy, and loans or grants for minority and women-owned businesses.
Have a realistic overview of your actual and projected expenses, including liability insurance, employee compensation, and other business costs.
4. Identifying and Gathering Essential Tools and Resources
A lot of the initial legwork, in addition to ongoing business processes, can be easily handled by finding and implementing the right tools, technology, and other business resources.
Google offers free analytics and other options that allow you to be on top of sales and business analysis.
Big data will help you parse and analyze everything from audience characteristics to lead generation and conversion rates. You can also use such technology to run core business processes like payroll.
Before you worry about sales, you have to have the tools for work. Software for marketers, and scissors for hairdressers, every business has a list of tools it cannot operate. As you purchase a piece of equipment, put it in a spreadsheet. Write down the purchase date, cost, and warranty expiration date.
Doing so allows you to accurately track your assets and monitor their increase in value or depreciation. When you know just what equipment you have on hand, you will reduce the amount of misplaced or stolen tools and equipment.
Besides that, you will make more informed decisions. I once bought a new mouse for my PC because I forgot I had a backup one. It was an expense that could easily avoid organized tracking. And if you’re in a business that requires heavy machinery like excavators or trucks, this is not an expense you want to overlook.
If your business will deal with a lot of inventory, try an automated inventory management system. It will let everyone from your sales team to warehouse managers know how much stock you have on hand and automate delivery when inventory reaches certain levels or peak needs.
5. Researching Laws and Regulations Relevant to Your Business
One thing that could blindside your enterprise is the failure to research regulations and laws that pertain to your business type and location.
Here are some examples:
Is your home zoned for running some small businesses, or are you required to set up shop in a more appropriate area that’s for your type of business?
Are you required to provide a specific amount of square-footage for parking or incorporate greater accessibility, such as handicap parking slots or bathrooms and other features?
Where you incorporate your business, and your business designation can halt your business or cost additional money.
Starting A business advisers will tell you to incorporate in another state for tax reasons. There are local, state, and federal regulations regarding licensing and liability for certain professional designations or industries, including marijuana dispensaries, health-related services, and finance.
When forming an LLC, I found out that it will be cheaper to register in my home state. That because some states require businesses to pay tax on a percentage of their revenues if owner is physically located within that state — regardless of where the company register.
All 50 states also require you to have a registered agent to form an LLC. It is an address that any legal documents and other relevant correspondence sent. That address must be in the same state as your official business location.
Register an LLC in a state where you and your business aren’t physically present. You may not be aware that your company has been served with legal documents, especially if it is an eCommerce business.
Check with your locality, an experienced business lawyer, and Starting A business accountant for up-to-date information on your business type and location.
Finally becoming your boss is exhilarating. But, it isn’t without responsibilities. Before you
embark on the exploit of a lifetime, make sure that you have all of your plans in order.
It’s easy to overlook some things when you undertake something this big. My goal is to help you avoid the pitfalls that tank many startups before they’re out of the gate. Good luck!!
Heather Redding is a comfortable manager for rent, addressing from Aurora. She loves to bore out writing about wearables, IoT and other hot tech trends. When she bargains the time to detach from her keyboard, she enjoys her Spark library and a hot coffee. Reach out to her on Twitter.
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