Many people today are excited at the prospect of starting and running a business of their own. No doubts industry has witnessed some start-ups or even existing businesses doing amazingly good.
Did you choose the right business to start?
While the excitement is good and welcome there is always a flip side of the coin and you need to be aware of every aspect if you have an innovative idea ticking in your mind and you are thinking of checking into your own business. It is not unusual that the business may not go down the road as it was expected, bringing about many doubts and leaving you to wonder if it is the right choice or not, or presumably when you find yourself in a dilemma if choosing that sector was a good idea or not; then I suggest you to evaluate yourself on the following checkpoints
- Check your interest
First things first, you must ask yourself if you are passionate enough to take the risks involved or is it just a hobby, pertaining to a different area that you are interested in or are just trying to get into the shoes of your favorite character? Though there is none a field you should be venturing on a trial and error basis, business is more critical a field on the page to try your luck. At least not when you are still not sure of your priority on career options.
For that, it involves the significant amount of money, as well as time, playing around will only harm you. Evaluate yourself thoroughly. Are you ready to invest your time and efforts; can you fulfill the responsibility it demands of you; if the answers are yes, then go for it. Business demands commitment. It requires both head and heart.
- Do you understand your business
Market may seem appealing to you when you see people who are established and successful in the area but the challenges, they had faced more often do not register to you. Not everyone has the same aptitude for work and not everyone can put enough effort to make the business running.
You need to realize that business requires managing a lot of resources at the same time, money being primary and workforce, location, liabilities, market, establishing customer base are some other important attributes. Unless you understand fully what are you stepping into, a business is not going to profit you.
- Do the analysis
- It is always a good practice to pre-research the ventures that came before you in the same segment, but failed. Take down all the learnings from their mistakes and keep in mind what did not go in their favor. Similarly, research on the successful competitors.
- Know your skill set
- Facts and figures may point a particular industry to be booming but that does not mean you should also venture into it. Know your skills; it is always beneficial to look at your resume. You may not have mentioned your strength, but you may excel in certain skills required for a particular business sector. Say, you have participated in debates through your schooling life and hence, you are great at communicating with people, which makes you perfect for opting a sales business where interaction with customers is the key action point of your business. Are you good at analytical skills? Go for a consultancy then.
- Know the market
- Do not work on instincts. You should always read the market and understand the business trends. A study of previous figures and a forecasted curve could surely help you here.Take expert advice. Consult technical enterprises offering services for start-ups or statistical data about industries. Know the demand of the industry. If people have already a product that fulfills their requirements at a very high satisfaction level, there is no point stepping into the field unless you have some extraordinary uniqueness about your product. Analyze these aspects and make sure you don’t fail at initial stages.
- Plan your strategy
- Always plan in advance for market response. How would you raise money and what are your investment plans. Know the projected growth of the industry and be flexible to market demands. How do you expect to get the return on the investment and how to manage money for keeping investments at hand for the business to grow? Always be ready with the short term as well as long term plans. Planning in advance for adverse market response will give you the necessary edge in coping up with the market in worse situations and not give up.
- Keep your spirits up
- Entering a market is not a cakewalk. If you are looking at a start-up, there are going to be many issues to deal with at hand like raising funds, teaming up, selecting the product and targeting markets and customers, these situations will challenge your ego back and forth. If you are determined and you have that hard shell, know that you are stepping right.
- Know the obligations
- Every plan is set in place but you are still unsure of the obligations your business requires. There may be many areas; you could miss pondering on this. Obligations can be legal, operational, political etc. You should always go for expert help in such matters; the security of your business cannot be at risk.
Apart from this, business structures are other things you need to keep in mind while starting on a business. There are several models you should consider as to select what suits you the best.
- Home-based business
- It is convenient in the way it sounds and difficult to run in the way your product is to be presented. You should know that your home has the right location or right resources or are you targeting the right customer. Besides, do you have the support of your family for the idea or not. Know your obligations.
- Family business
- Do you have a business running in the family already? Make sure you commit strongly to yourself that you can take this business forward. Understand the business thoroughly and look for areas where your involvement can bring changes.
- Online business
- The online marketplace is booming, these days. Customer centricity is the key here. Understand that starting a business online requires your skills in software domain, if you are comfortable with computers and can manage with software packages, this will help you run the business in discipline.
- Independent contractors
- If you are not ready for a regular business and are willing to hire out your services on your own terms and conditions, this is the business you should be looking at. If you have a contact network, this can take you to higher levels in the industry.
You can consider buying a franchise if you are too worried about establishing a brand for your new product idea and are happy to work under the name of a fully grown business.
This will require your absolute marketing and managerial skills at work. Extending out franchises of your already established business is another way to expand the business and increase the spectrum of customers covered by introducing products specific to location and demands.
- Importing business
- If the location does not have the access to right resources and the businesses are showing a decline owing to high costs, consider starting an importing business. Generating profits in this sector is a matter of dealing well, and appropriate analytical and communication skills can work wonders for you. Make sure to follow the custom rules on the products before pitching for the business.
- Exporting business
- Keeping legal, foreign exchange, political issues at one hand and understanding the main aim of exporting goods can help you here.
Besides choosing a right business structure and checking your preparedness for stepping into the market, what you should also consider is the legal structure for your proposed business. In that they define your obligations, they are also an indicator of your earnings, tax scale you fit into and requisite paperwork. It is always a smart move to consult professional experts and explain them your situation well. Some contact points may be SBA or Service Corps of Retired Executives (SCORE) or even attorneys and qualified accountants.
What to consider while selecting a business entity
- Legal liability
- This is in relation to insulation of owner of the entity from the legal liabilities and the associated debts. While a big business can afford to go through the process of forming a legal organization, a small scale business may not need so. Sole proprietorship is the option for you when you can afford the risk of the liabilities your business can incur.
- Tax implications
- How you plan to avail tax options for your business needs attention, not after you start the business but during planning of business structure and operation. Different entities can benefit from different options suitable to their goals and strategy.
- Costs associated
While you may think that raising the seeding money for your business is the only problem you should consider on the monetary front, it is not generally the case. Keeping up with the administrative requirements and costs associated with paperwork and updating of records are deemed necessary actions in corporation
They also demand a big chunk of your time and mind. Be sure to understand your business in a way that with tax implications and legal liabilities, if the benefit acquired is huge enough to bear these additional costs of running the administration, then only go for incorporation. Otherwise sole proprietorship or partnership may pretty well take care of your comfort.
- Think of flexibility in the structure of ownership, on both fronts, what the business needs and what the owner/s expects. It is advisable to chalk down the business goals and decide accordingly on what form you want your organization to work on and what are the responsibilities of people involved in it.
- Future Needs
- Activeness, passion and energy are the starting points of many businesses. To propel your idea to real implementation and ensuring its sustenance requires ownership and a standing personality. Accessing your current situation as well as after a few years from now can provide you with sufficient outlook to decide what structure of business should you pursue.
Starting a business to running it full-fledged is not a 24 hour job. You have to bear the patience. Realize that time is money. Investment in time must give a significant return on money. You need to be prompt and active and also welcome to time taking actions at the same time. For starters, raising the seeding money is in itself a tedious task, pitching for skills and time.
You will get in talks with investors, apply for a bank loan maybe, and all these course of actions will ask you to follow up consistently with them, rejecting your proposal straight forward at times, questioning your abilities or taking up to 5 to 6 months even if it makes progress with the potential investor. You should be able to face the situations with courage because down the line any action taken will either teach you a lesson or put you up a success ladder.
Networking is essential
Besides all the technical level plans, building a social network around yourself not only gives you the edge in jumping into the market but also helps you keep abreast with advancements in the industry. Emphasize on keeping active communication with clients and partners. Reach out to them and explain to them in advance, some problem that they might encounter and tell them that you are working on it to get fixed as soon as possible. You should also keep asking them for their comments, feedback and reviews.
The bottom story is if you strongly believe in yourself and have got your instincts right, you will love your work and absolutely enjoy it. Changes, challenges, success, failures are phases and much of it can be skipped if we do proper planning and research well-in-advance. My advice to you is go risk it all if you feel it right. All the very best folks!!