A lot of people are tired of their 9 to 5 job, and everyone dreams of starting their own business.
However, it is not as easy to run a business as many people think. It often feels like there are a gazillion things to work on at the same time.
One study states that only 4% of new businesses succeed in reaching the 10-year mark. In fact, more than 50% of small companies don’t even make it to the fifth year.
But it’s not all gloom and doom in commerce. With a little planning, it is possible to start a business and get it off the ground.
In this article, you will find a list of things to do before starting a business.
1. Do your research
There are a thousand business ideas that experts promote every day on the internet. But not all of them are good. Some won’t work in your geographical area, and some require a lot of other stuff you didn’t even think of.
You want to make sure you understand the sector you will be involved in if you plan to dominate it. Even if you think your business idea is unique, you need to be aware of your competitors, reach your target audience, increase sales, etc.
That’s where it’s essential to research to see the edges of your business idea.
Remember that just because you have a great idea doesn’t mean that someone else didn’t have the same idea. If you find it difficult to come up with something better or cheaper than your competitors, then maybe you should rethink your concept.
Research the market thoroughly before you start your business. Understand the sector you want to enter, as well as the nitty-gritty details about your future competitors.
2. Determine your target market
Spend time thinking about the people you are targeting. This audience will be the driving force behind every decision you make.
You need to identify who needs your product or service to refine your offerings and ensure that your marketing and sales strategies reach the right people.
Part of that decision is understanding whether you are a business-to-consumer (B2C) or business-to-business (B2B) company.
Other parameters to consider are age, income, gender, and occupation.
When you know what influences the buying decision of your “potential customer,” it is easier for you to give them what they want, not what you want.
Another significant factor when defining your target audience is their geographic location.
Geography allows you to estimate how many people you have access to in your market. More importantly, it helps you to know the rules that govern the business environment in the target area.
So know who you’re targeting. A defined target market will facilitate not only customer acquisition but also customer retention.
3. Pick a legal structure
When you want to start a business, your company’s legal structure choice should be one of the most critical things on your to-do list.
The business’s legal structure will dictate taxes, the owner’s liability and other legal aspects, paperwork, and whether the company can have employees.
Besides, you must obtain both local and national registration documents required to establish your business.
Therefore, you must create your company’s legal statutes, obtain an employer identification number, and apply for the necessary licenses, which will be different depending on the country and the activity sector.
4. Write a business plan
A business plan outlines the steps you’ll take for a successful launch and continued growth.
You’ll hear many people debating whether a business plan is as essential as experts claim. Just keep in mind that a business plan still gives you a sense of direction in your business, even when it is not implemented.
This document is vital for setting your business’s direction, seeking and retaining capital, and attracting C-level professionals to work with you.
A business plan is not complicated to write. Just make sure you focus on the key elements, including:
- A mission statement
- A description of your company
- A catalog of your services and products
- A financial plan
- A list of your competitors and your strengths and weaknesses
Even if you think you do not need it, develop a professional and concise business plan. It will help you when you are recruiting executives, raising funds, or expanding your business.
5. Look for a business mentor
Setting up and running a business is not at all easy; in fact, it’s a roller coaster.
To avoid making many mistakes, at the risk of closing down, find those who have already made this journey and ask them to guide you. Engage in workshops and events specific to your business sector, get in touch with other professionals you look up to, and seek guidance.
You may also want to consider hiring a coach to provide you with sound advice.
6. Review the technology you need
It is almost impossible to create a business in 2021 and ignore technology.
Whether it’s office equipment, business service setup, machine installations, or the software needed to support your business, you will need to use technology.
But it’s important to use the right tools, so your business makes the most of it.
Here are some steps you can take to choose the right technology for your business:
- Assess your business needs.
- Make sure the technology you choose contributes to the smooth running of operations.
- Ensure you have the support you need to install, update, and troubleshoot the technology you choose.
- Invest in training to make the best use of technology.
Keep in mind that nothing and no one is infallible. Even the latest tech gadget can fail, so always have a backup plan. For example, if your management software is down, you should still be able to work, regardless.
Building a business from the ground up isn’t easy; but it can be a truly rewarding experience if you do your homework.
Now that you know everything you need to consider when starting a new business, make sure you have fun and learn along the journey. After all, if you do not enjoy the process and learn from it, then it may not be worth it.
Naresh Manchanda is a Partner at MBG Corporate Services, an international organization supporting clients across Asia, Europe and the Middle East and providing sustainable solutions and strategies that drive business transformation. Established in 2002 and headquartered in Singapore, MBG is a 450-strong member team that operates out of Europe, the Middle East and Asia, providing Legal, Risk, M&A, Tax, Strategy, Technology and Audit Services.