Congratulations, you are ready to start your own business. There are a few things you need to know first. One of the most daunting business adventures is to start without a plan. You have likely heard the famous quote by Benjamin Franklin, “if you fail to plan, you are planning to fail.” However, very few people plan their businesses before they start. Could this be the reason most startups face difficulties within the first few months of operation? Don’t be surprised by the fact that one out of every five businesses crumble within the first 3-5 years of operations! Get your business off to a great start, by following these 4 simple tips for planning your business startup.
1. Identify your passion
Understanding your passion is a great stepping stone when it comes to starting a business. Unfortunately, your passion and your talent may not be in alignment. Have you ever known someone who started a business because they were passionate about the thing they were most experienced in, only to find them six months to a year later burned out and closing the door? Yes, the passion was there, but the innate talent was not in alignment. This is when you find yourself spending the majority of your time doing something you don’t love and is not offering fulfillment. It is important that you evaluate yourself and identify both your passion and your talent when it comes to starting a business. When these are in alignment, those 12 – 16 hour days can feel quite euphoric instead of exhausting.
2. Do an extensive market research
Note, passion & talent alone is not enough to determine the best business endeavor to become involved in. You should find out if people are ready to pay for what you want to offer. Identify the specific consumers (target market) who are ready to pay for your products and how much are they willing to pay.
Developing a strategy to reach your target market is key. Answer the following questions:
- How do I intent to reach my prospective customers?
- How will I distribute my products to my customers?
- How do I know the actual price that my prospective clients are willing to pay?
3. Write a business plan
A business plan is simply a detailed definition of your business idea. It will give you a sense of direction that will enable you to achieve your business objectives. A good business plan must describe what you want to do, when, and how you will do it. In fact, a written business plan can be used as a guide to run your business. Your plan should bring clarity and vision to your idea.
4. Understand the legal requirements
For your business to succeed, it must operate in accordance with the law. First, you must define the type of business you want to start; is it a sole proprietorship, partnership, a limited liability company, or a corporation? Note that each of these business types have different legal requirements. Secondly, you must understand your business’s tax obligations. This will ensure that your business is compliant from day one.
Planning your business startup isn’t as difficult as you might think. Follow the four tips discussed in this article and you will succeed in laying a strong foundation for your business. Always remember that you should never start a business without a plan.
It is important to note that every business starts from an idea or thought. This idea or thought can become a reality if the appropriate actions are taken.