In a world where three quarters of all business start-ups fail, you might find yourself doubting your ability to achieve your entrepreneurial dreams. The more you understand about owning your own business, the more likely you are to succeed. Here are five important objectives to reach before you can open your doors.
1. Understand Your Customers
All businesses fill a need. The better you understand this need, the better you’ll be able to satisfy your customers. Don’t rely on street smarts alone when plotting your strategy; perform research, gather statistics, and crunch numbers. The more specifics you have, the better you’ll fare in the long run.
If you don’t know how to conduct market research, consider these ideas:
- Interview consumers. Find out what customers in your niche like/don’t like and how much they’re willing to spend for various products.
- Solicit information online. Invite consumers to take online surveys or questionnaires.
- Reach out. Don’t just research the consumers around you; reach beyond your inner circle and gather information from other populations, too.
- Perform deep research. The Internet is a goldmine, but some of the best information nuggets are found in a library. Don’t limit yourself to web research; make the trek to your local library or business center as well.
2. Get The Funds
Most start-up entrepreneurs don’t finance their business out of their own pockets. Thankfully, there are financial institutions and private investors who want to help aspiring entrepreneurs. To win the interest of a potential investor, you must prove you are trustworthy and that your business will deliver a decent ROI.
Start-up investors want to know your profit potential. They want to see that you’ve performed smart research, that you’ve identified a profitable niche, and that you can handle the rigor of running your own business. Outline your work history, playing up your strengths and past successes. Provide concrete budget information. Identify a lucrative gap in the market and illustrate it so clearly the investors can see the profit potential.
3. Choose Who To Work With
One of the hardest choices a future business owner has to make is whether to fly solo or form a partnership. In the UK, most businesses fall into one of three legal categories, and each category has its own set of legal requirements.
- Sole Trader: A business owned by one person.
- Limited Company: A business owned by a group of people or organisations.
- Business Partnership: A business in which two or more partners share a stake in the success.
The next hardest decision is choosing the right partner. Friends and business rarely mix, and the same applies to business and family. Choose a partner who you will hold up their end of the bargain, and keep you accountable for holding up yours.
4. Conceptualize Your Business Plan
You’d be foolish to jump headlong into a new business without spelling out some of the particulars first. Granted, you don’t know everything there is to know about your business yet, but you have ideas and ideals that must be conceptualized and written down.
Related: 5 Tips For Starting A New Business On A Shoestring Budget
Here are five general questions to ask yourself when creating a business plan:
- What purpose will my business serve, and how will it go about fulfilling its purpose?
- How can I make my business stand apart from similar businesses? What are its unique features?
- Who are the key players in my business?
- What population am I serving, and about how large is my potential customer base?
- How will I acquire capital, invest capital, and generate revenue? What will it take to break even and/or make a profit?
If you’re stuck for ideas, it often helps to look at a sample business plan when you’re trying answer the tough questions.
5. Decide How To Advertise
Customers won’t find you if they’ve never heard of you. Depending on your market and customer base, you’ll need to select one or more forms of advertisement. Here are some of the more popular choices:
- Business Cards
- Direct Mail
- Email Marketing
- Press Releases
- Social Media/Online Advertising
- TV and Radio
Why do you need to know how to advertise before hand? You can start creating promotions before you launch, so your grand opening draws in curious potential customers and media. You advertise early to invite people to celebrate this milestone and become long-term customers.
Starting your own business can be a daunting process. It takes grit, it takes spunk, and it takes perseverance. It also takes some know-how. If you take the time to do your homework before swinging those business doors open to the public, you’ll thank yourself later.