So you’ve finally caught the bug.
Yes. I mean the self-made entrepreneur bug.
And because of that, you’re planning on starting your own business.
Kudos to you.
In all honesty, there couldn’t be a better time than now to start a business. Thanks to advancements in technology starting and running a business has become easier than it was 10 years ago. However, before you quit your day job and plunge into the world of business, here are some simple keys that will help you succeed. After all, statistics are pretty grim when it comes to new businesses. Take these 2 for example:
- Of all businesses started in 2014, 0nly 56% made it to 2018 (5 years)
- 29% of small businesses that fail cite lack of funding as the major cause
However, it’s not all doom and gloom. Especially if you start off on the right footing.
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Thinking of Starting Your Own Business? Here are 5 Keys You Need for Success
While starting a business may seem like a simple matter of coming up with an idea and setting up shop, there’s a whole lot more involved in the process. And if you want to start your business on a good foot, you must make sure to do your homework first. Here’s what that homework entails:
1. Evaluate Yourself
One of the most important steps in starting your own business is to evaluate yourself. Yet many wannabe business people overlook this step. And trust me, overlooking this step will result in you haunting and sending your business to an early grave.
Self-evaluation is critical as it informs the kind of business model that will suit you best. This stage involves asking yourself important questions such as:
- Why you want to start a business. If it’s to earn extra cash, then you’re better off starting a side hustle. However, if your main motivation is the freedom to live life on your own terms, then you’ll have to plan on a fully-fledged business.
- What key skills you can leverage. It is highly advisable that you start a business in line with the knowledge and skills you already have. This will ensure that you have less of a learning curve.
- Whether you’re truly ready to take the plunge. There is a big difference between planning to start a business and actually starting one. The latter takes a lot of blood, sweat, and tears. Are you ready for it?
Answering these questions will not only help you discover where your business acumen lies but it will also help you develop an entrepreneurial mindset. A mindset that is ready to take the business world head-on – and succeed.
2. Validate Your Idea
Most businesses start with an “aha” moment. That moment you get a brilliant that will change the world. However, as great an idea as it may be, you’ll need to ensure your idea is not already being used somewhere. You’ll also need to ascertain if it’s even feasible.
The biggest reason you need to put a lot of effort into validating your idea is to eliminate as many assumptions as possible. It’s easy to think your idea will receive rave reviews and generate stratospheric revenues. However, taking it to market without validation could result in it going down in flames faster than the Hindenberg.
3. Conduct Market Research
Having a great idea is pointless if no one is willing to pay for it.
This is where market research comes in.
Market research is the process of gathering, analyzing and interpreting information about a market. However, it goes beyond that and also focuses on determining whether there’s a current (and future) need for your product or service. If there is a need, how do your potential customers spend on a similar product or service?
Other factors to research as you “feel” your market include:
- Supply chain. How easy is it to get your product from factory to market?
- Competition. How tough is the competition in your niche? How much revenue are your competitors generating?
- Demographics. Is your product only targeted at a particular demographic? Is it a good fit for them?
All this insight will help you have a picture of how your product will perform once it goes to market. You’ll be better informed on how to prepare for your launch and how many units (if it’s a physical product) you should produce.
4. Draw Up A Business Plan
A business plan is one of the most important documents in any business. It is a roadmap of how you’re going to achieve your business goals. As such, it has to be a well-written summary of your business goals, processes, and strategies. That being said, there are 2 types of business plans every business needs:
The Traditional Business Plan
This is the conventional 10-30-page business plan that details every stage and process in getting your business started to running it successfully. One of the main uses of this type of business plan is to get funding as it is designed to show the validity and feasibility of the business.
The One-page Business Plan
A one-page business plan can be likened to a beefed-up elevator pitch. It’s succinct enough to give a clear picture of your business yet packed with enough information to help readers understand your idea.
One of the biggest advantages of a one-page business plan is that it’s easier to use as a roadmap than a traditional business plan (which is rarely revisited).
The importance of a business plan can’t be overemphasized. Without it, you can easily lose direction and shipwreck your business.
5. Get the Paperwork Done
It’s time to make it official.
You’ve put in a lot of work laying the groundwork for your business and it’s now time for it to be recognized as a real business entity.
Yes, I’m talking about registering your business. Of course, to do this you need to:
- Come up with a business name. Naming your business is no trivial matter. After all, your name gives your customers a peek into who you are and what you do. Spend time (and resources if need be) to find the best name for your
- Decide on the business structure. Are you going to register your business as an LLC, corporation, partnership, or any other structure that best suits you?
Officially registering your business does more than just make it official. It also helps protect your business and ideas or from being sued by an unscrupulous partner.
Starting Your Own Business – It’s Game Time
While this is not a comprehensive roadmap to starting your own business, following these 5 simple steps will bring you closer to actualizing your dream. Starting a business is not as daunting as it may seem. The key is to take that first step.
David Hoffman is a serial entrepreneur who’s helped build several multi-million dollar companies. He is the founder and CEO of GlobalTQM – a company that helps SMEs, startups and solopreneurs source and develop products in China. His mentorship program and done-for-you services have helped countless clients find the financial freedom to live the life of their dreams.