Editor’s note: This is a guest post from Pamelia Brown
Starting your own business is an exciting prospect. Who doesn’t want to be their own boss and set their own hours? While owning your own business might sound glamorous, doing so is much more difficult than it seems. You may set your own hours, but those hours may amount to 12- or even 14-hour days when you are just getting your business off the ground.
You may be your own boss, but you are also responsible for the financial cost of overhead, hiring and training employees, and dealing with any angry or unsatisfied customers or clients, all of which can be very stressful. At the same time, many people gain a great deal of satisfaction and pride from running their own successful businesses. Here I will explore seven things you should think about before starting your own entrepreneurial venture.
1.) Do I have enough money?
Many new businesses require high start-up costs, and you will need to be realistic about what these costs are and how much money you will need up front to cover them. Personal savings, plus venture capital from investors or business loans could be necessary to get your business idea off the ground.
With the latter two options, you will bear a responsibility to your investors and have parameters for when you must pay back your loans. You must have a business plan in place for how you plan to grow your business and increase its profitability over time for you to meet these demands. You will also need enough money to cushion you in the first few months of operating your business if the business is not immediately profitable.
2.) Is my business idea profitable?
Not every business idea is likely to be profitable. For instance, if you want to open a book store in a small market, chances are you haven’t been paying much attention to the book industry lately. Even large bookstore chains have been suffering in large markets as the tide turns toward e-readers and e-books. But a health food store in a medium-sized market where the closest competition is an hour away? You may be on to something. It helps to do some research on the industry you plan on entering to see if it is high-growth or to offer a product or service that solves a problem or meets a need in your market.
3.) Who is my competition?
One of the first things you will need to do before you start a new business is identify your competitors. Part of working ideas to build a strong business plan is offering a product or service that is better or different than your competitors.
4.) What model do other successful businesses follow?
Before you start your own business, you may want to make contact with other business owners, sit down with them and ask them about how they got started. Your competitors will not be too keen on doing this, so you may want to schedule meetings with industry professionals whose market is drastically different than yours or who live a different cities.
5.) Am I willing to advertise and market myself to get my name out there?
External advertising and a strong Web presence are key to getting the word out about your new business, but this kind of marketing carries a large expense. Be sure that you factor quality Web design and professional advertising into your start-up costs or you could be looking at very little business for a long time. You may even consider networking opportunities, such as joining your local chamber of commerce, to get a buzz going about your business.
6.) What are my goals?
In your business plan, you should have short-term and long-term goals written out, concerning plans for expansion and estimated profits a year to five years down the road.
7.) Could I benefit from a college education before launching my business?
A college degree in business is beneficial to helping many would-be entrepreneurs build the skills they need to get a business off the ground. Courses in business information systems, entrepreneurship, accounting and management are especially useful.In conclusion, there are many considerations, financial and otherwise, that should go through your mind before you start a new business. It’s no secret that about half of all small businesses fail within their first five years. Don’t be a statistic. Be financially prepared, know your industry, plan carefully and get educated. This can make the difference in whether you succeed or fail.
This guest contribution was submitted by Pamelia Brown, who specializes in writing about associates degree. Questions and comments can be sent to: pamelia.brown@gmail.com
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