When it comes to starting your own business, there are several things that need careful consideration. As you are probably well aware, starting a business is no easy task. It can be a risky journey that is loaded with unknown dangers and things that can seem to be way beyond your control. For many, it is a life-long dream and a way to control their own destiny. It certainly was us. We are not “the” experts when it comes to starting your own business. We had a few bumps and bruises along the way. That said, we want to share a few things that we learned, understanding that every business is different, yet proper planning is vital for a business to succeed. If you are launching your own business, or are planning to do so in the near-future, here are a few things for you to consider.
1. Contemplate Your Reasons
The idea of starting up your own business is indeed daunting; but so is the never-ending fatigue associated with working an 8-hour shift that turns out to be a 10, 12, and even 14-hour shift each and every day. Still, you should have a solid reason for why you want to start your own business, and it should not be because you have run out of options. A strong purpose is vital for the development and growth of your business.
2. Select the Type of Business
Once you have a solid purpose on why you want to start your business, you need to answer the question of what type of business you want. The options are almost unlimited; people love cakes, everyone needs a haircut, we cannot live without plumbing, and the list goes on and on.
Look around you and try to figure out what kind of business is needed most in your neighborhood or wherever you intend to start your business.
3. Formulate a Business Plan
A business plan is like a map, if you head out without it, it is fairly certain that you will get lost. Your business plan is the foundation upon which your business will be built. You should include clear, unambiguous information regarding what you will offer, who will be your target audience and any information relevant to the running your business successfully.
4. Understand Your Target Audience
Without understanding your target audience, you will be shooting in the dark. A target audience is a certain set of consumers/customers/clients with a potential interest in your products or services. For instance, if you are planning to sell cosmetics, it may not be a good idea to simply target ‘all women’. You will have to do some research or review third party research on what kind of cosmetics are preferred by women of certain age groups. Doing a little research will give you something to aim for, the appropriate customer who would be more inclined to buy your products.
5. Create the Right Pricing Structure
The prices of your products and services should be set correctly. They should not only cover the necessary expenses, but they should go a step further to generate a profit for you. A lot of entrepreneurs underestimate their efforts; make sure you avoid making this mistake. Consider the costs and effort that it takes to create your product or the amount of time that goes into the services that you offer; do not just account for the obvious expenses when setting your prices. Remember that nothing is more valuable than your time and effort, and you should charge for this too. You can use financial management software such as QuickBooks to help you with all the numbers.
The list above only begins to scratch the surface of the things you need to consider as you begin the journey of becoming an entrepreneur. Business entity type, recordkeeping needs, taxes, and more will need to consideration as well. Check out our post on the Sub S Corporation structures. I know you will be glad you did.