It is likely you have toyed with the decision to start your own venture for some time now. However, a fear of failure, a lack of business knowledge or experience, or limited finances in the bank could potentially be holding you back.
If you want to make 2019 the year you finally embark on your entrepreneurial journey, read the following nine factors to consider before launching your first business.
- Consumer Demand
Before you invest your time and money into a product, website, or marketing campaign, you must thoroughly understand the market. To successfully sell your product, there needs to be consumer demand. You will, therefore, need to perform market research to identify the products or services your customers want and/or cannot find, which could help you to fill a gap in the market.
To ensure you beat your competitors, you must consider your target customers’ age range, location and income, so you can provide a product or service that meets their needs and convinces them to choose you over an industry rival.
- Your Knowledge and Experience
Running an organization can be anything but easy. If you lack knowledge and experience in business, you might be a little overwhelmed at the prospect of writing a business plan, managing your operations, and organizing your finances for optimum growth.
If so, consider a Michigan online MBA program, which is an ideal course for those hoping to launch their first business, as it can provide the knowledge and tools you need to run a successful company.
- Your Hard Work Ethic & Self-Discipline
Every successful entrepreneur must possess self-discipline. You must be prepared to work hard every day to make your business a success. This means working long, stressful hours to reach your goals.
You’ll also need to sacrifice some areas of your social life and be willing to spend less time with your family members. If you don’t have the hard work ethic or motivation to run a business, it is unlikely it will become a success.
- The Legal Structure of Your Business
It is imperative to carefully consider the legal structure of your business. The option you choose will ultimately determine your ventures:
- Taxes
- Paperwork
- Owner(s) liability
- Employment rights
You’ll also need to secure registration from the government to legally open a business in the United States. For example, you might need to apply for various licenses, receive an employer identification number, and create article of incorporation, which will each vary by your industry and state.
- The Startup Costs
Your startup costs will be determined by the type of business you choose to launch. While there are some businesses that will require minimal investment from day one (such as a consulting business), there are other ventures that could cost a substantial amount of money (such as a restaurant).
To help a business to generate a profit as soon as possible and avoid debt, you must consider every initial cost, which will prevent a nasty surprise down the road.
For example, if you are opening a bricks and mortar retail store, you will need to consider the cost of equipment, shop fitting, staff salaries, brand and marketing, products, rent, etc.
- Your Business Location
Many aspiring entrepreneurs could see an empty store in a street and believe it’s an ideal place to open a business. While it might appear to have good footfall, there might be a perfectly good reason why the building is sitting empty. For this reason, you must carefully consider the location of your new business before you attach yourself to a one-year, five-year or ten-year contract.
In some cases, you might not need to launch a bricks and mortar store. For example, you could make money selling your products or services online from your own home, which could potentially lower your overheads, as you will not need to pay for expensive rental fees, cashiers, store equipment, etc.
- A Business Plan
Many budding entrepreneurs view business plans as a waste of their time, as they know what they want to achieve and how they are going to achieve it, yet this can be a rookie mistake.
A business plan will serve as a road map to your company’s success, as it will state what you’re going to do it, how you’re going to fund it, and when you’re going to reach your business goals. It can, therefore, hit you with the reality of what it will take to launch and run a business. Plus, a strong business plan could convince an investor to inject money into your startup.
- The Price Point
Many new business owners make the mistake of offering the cheapest price on a product or service, with the aim of blowing their competition out of the water.
However, becoming a low-cost leader could have serious ramifications for your business. Not only will your markup be much smaller than your more established industry rivals, but you will also align your business with affordability. As a result, it will make it difficult to be viewed as a premium brand or to increase your price point in the future.
To grow your brand’s profit margin and become synonymous with luxury or high-quality, you should avoid providing your customers with the lowest price on the market. After all, higher pricing can suggest a higher quality product or service. Of course, your price point will also be determined by your target demographic, as cheap and expensive retailers will target different customers.
- Business Risk
Every business venture comes with risk. It is, however, your job to both understand and plan for it when launching your enterprise, so you can find the right insurance option.
For example, if you are planning to launch an accountancy business, it is possible for clients to file a lawsuit, so you will require professional liability insurance. Slip and fall accidents are also common in bars and restaurants, which is why liquor liability insurance is essential when faced with a lawsuit.
