Are you among the 62 percent of Americans with a dream business idea in mind?
If yes, now is the best time to turn your idea into a business. Our economy has strongly recovered from the financial ruin of 2008 and funding for new businesses isn’t difficult to secure.
However, starting a business that’ll grow into a profitable entity isn’t a walk in the park. In fact, about 50 percent of all new businesses close shop within four years.
To keep you on the path to success, we’re sharing tips you must know on starting your own business. Keep reading!
1. Do You Have What It Takes?
The first thing to do before starting a business is to establish whether you have the heart and soul of an entrepreneur. Not everyone is cut out for this field.
Do you love taking risks? How do you respond to failure?
For starters, entrepreneurship is brutal. It takes passion, hard work, persistence and resilience to build a profitable business out of your ideas.
If you lack these traits, it’s unlikely that you’ll succeed as an entrepreneur. You might be better off pursuing something else.
2. You Need a Viable Idea
It’s not just enough to have a business idea. You need a viable idea.
Before starting any business, it’s crucial to perform a market study and establish whether your idea and the resulting product or service has a strong demand or fills a certain market need.
Even if you don’t have the funding to perform an extensive feasibility study, simply evaluating whether your idea solves a real problem is enough. Reach out to the people around you and ask whether they’d be interested in your product or service.
Once that’s done, you also want to evaluate competition in the market. If the market you plan to enter is highly competitive, consider coming up with another idea.
3. Don’t Sit on Your Idea
Figured your idea has a market? Thumbs up, but don’t wait too long before turning it into a product.
Especially if your idea has no competitor, you want to be the first to hit the market. You have no guarantee that no one else is developing a similar product, so early market entry will give your business a big head start.
A common reason aspiring entrepreneurs decide to sit on their idea is that they received negative feedback during the research phase.
Well, negative feedback doesn’t necessarily mean there’s no market for your idea. As long as you believe in the idea and it promises to fill an existing market need, there’s no reason to delay your decision. After all, entrepreneurship is all about taking risks.
4. A Business Plan Isn’t Optional
It’s easy to overlook starting your business without a business plan, especially if it’s a small sole proprietorship. Don’t make this mistake.
You see, starting a business without a business plan is much like driving at night without headlights or building a house without an architectural blueprint. In both instances, the results will inevitably be disastrous.
A business plan is your blueprint to success. It doesn’t have to be an overly complex document with a lot of information. Just a simple plan that maps out the crucial details, such as your startup capital requirements, financial projections, and sales and marketing strategy, will suffice.
If you have never drawn a business plan before, don’t shy from asking for help. This is the time to utilize the people around you, especially those who have business expertise.
5. You Need Adequate Funding
Did you know most entrepreneurs use their own funds to start a business?
If you’re planning to dig into your own pocket, well and good. However, if you don’t have enough funds to start your business, don’t be discouraged.
There are a couple of external funding options you can turn to. A go-to option for most entrepreneurs is friends and family. You can ask them to fundraise or give you a loan.
Another funding strategy is to run a crowdfunding campaign on platforms such as Kickstarter and GoFundMe. Keep in mind though running a successful crowdfunding campaign will depend on how effectively you tell the story of your business and how widely you promote it on social media.
Other funding options include taking out a personal or business loan and finding an equity or angel investor.
Whatever option you choose, don’t start the business without adequate capital. If you start without enough cash anticipating that the business will start generating a profit as soon as it opens its doors, you’ll likely run out of working capital and end up closing down.
6. Leverage Technology
Your business doesn’t have to be a tech startup for you to embrace technology.
Even it’s a home-based business that sells handmade crafts to the locals, adopting the right technology will automate some of your operations and help reduce your costs.
And if you don’t know the kind of tech solutions your business needs, hire a tech solutions company like Bitbean. It will evaluate your operations and develop custom software or applications for your business.
7. Don’t Wear Too Many Hats
Many small businesses run on shoestring budgets. This is why it’s common to find entrepreneurs taking on almost every task, from product development to accounting, marketing, and customer service.
While it’s understandable that you might not have any other choice other than to be a one-man show, it’s important to realize when you need to bring in more hands to help. Roles like accounting need expertise, so an accountant should be one of your first hires.
Generally, as your business grows you need to grow your staff too.
Starting a Business on a Solid Footing
Starting a business enables you to become your own boss, set your own hours, and make money on your terms.
On paper, this sounds easy. In practice, though, you’ve to put in the hard work and avoid common mistakes; otherwise, your dream of business ownership will remain just a dream.
Lucky for you, we’ve fleshed out some of the top tips you need to know before starting your own business.
Good luck and be sure to check out these tools every business owner needs.