Starting a business can be both an exhilarating and daunting prospect. In the early days of planning, researching and trying to launch your business, it can often feel like there are thousands of tasks to work on at the same time.
But looking beyond the routine administrative tasks you can expect to face when you are getting ready to launch your business, what are the important things you need to consider before taking the plunge?
1. How is the economy doing?
Some of the most important considerations you need to think about before starting a business relate to the economy as a whole.
The current state of the economy can affect your business in various ways. For example, during periods of high inflation, central banking institutions might raise interest rates, which could impact how much it costs you to borrow money to finance your new business venture.
Similarly, understanding the current and future state of the economy will also allow you to predict what your costs of doing business may look like in the months to come. Being able to predict these fluctuations will help you to withstand any economic shocks that might happen in the future.
As such, it is important to gain a basic understanding of how the economy works and how this will affect your business. Thankfully, this is relatively easy to do on your own, without having to enroll in a university-level economics course. And thanks to trading websites like Admirals, there is a wealth of useful information ready to access online!
2. Know your audience
One of the most essential bits of research you need to do before launching any business venture is about your target market.
Once you have a basic idea of what the business will look like and how you will actually generate revenue, you should then focus more closely on the customer base you will be selling to. Try and put yourself in their shoes to the best extent possible and figure out what their world view is, what problems they face and how you might bring value to their lives.
The better you understand your target customer, the more your product or service will speak to them. This research will not only be useful for developing your business plan and putting it into action but will also help to inform any marketing you do in the future.
3. Sort out your finances
For most people, deciding to start a business can be one of the most significant financial decisions they will make in their lives.
With that said, before you take the plunge, you should always use this opportunity to take a close look at your personal finances and consider how starting a business might impact or be hindered by them.
Although starting a business may prove to be quite expensive, there are numerous successful companies that were started with limited funds. For example, entrepreneur Hari K Ravichandran started Endurance International Group (market cap of $2.1 billion) with extremely modest funds.
If you do decide to start a business, it is important to reduce any unnecessary financial commitments and to get a sense of the minimum amount that you need to live on. This might also involve setting out a “survival budget”’ that sets out the absolute minimum you need to live on while you invest any additional financial resources into the business.
Additionally, adopting digital pay stubs allows for efficient and paperless management of employee payments, providing accurate and accessible records for the business and its employees.
Following this advice will allow you to tighten your business financials and to set your business up for long-term success!
4. Do you have a clear vision?
Beyond developing at least a basic business strategy – which is a prerequisite for any business venture – it is also important to consider whether or not you have a clear vision before starting your business.
Case studies have shown time and time again that entrepreneurs with a clear business plan and vision for where to take the business have considerably lower failure rates.
Developing a vision for your business involves not just setting out what your primary goals are but also developing a clear sense of the “why” behind it. These goals will help to keep you focused and motivated, while your “vision” will be an important source of motivation when times inevitably get tough!
5. Do you have expansion plans?
Although you might not have to make decisions about expanding your business until you actually get things off the ground and have started to generate a steady revenue stream, it is always worthwhile thinking about what that expansion might look like, as early as possible.
With that said, when you are making initial plans about how you will launch your business, it is always a good idea to take some time to think about how you might expand your business in the future.
This might mean considering whether or not you will need to expand your team, or whether there will be any opportunities for opening up a new branch or location. Although you don’t need to have concrete ideas about how you will go about this, it is still a good idea to start having these conversations when you are in the planning phase.
Businesses that fail to expand might miss out on profit-making opportunities, while at the same time, those that expand too quickly can become overstretched and put themselves at risk of closure. As such, it is important to start planning for your future as early as possible.
6. Do you have an exit plan?
Although no one likes to think that there is a chance their business will fail, the harsh reality is that this is a very real possibility for the majority of businesses that get started.
In fact, according to the U.S. Bureau of Labor Statistics, around 20% of new businesses will fail in the first two years, 45% within the first five years and 65% during the first 10 years. And perhaps most interestingly, these figures haven’t changed significantly since the 1990s, when this data first started being recorded.
Although this doesn’t mean that your business is likely to fail within the first months or years of launching, you should nevertheless use this information as a cautionary tale of what can go wrong. With that said, it is essential that whenever you are launching a new business you have a clear plan for what you should do if things don’t go according to plan. Websites like findbusinesses4sale.com can help you save time and effort when finding qualified buyers. They maximize your listing’s exposure through different methods, such as email marketing and social media campaigns. Thus, ensuring you receive a fair offer.
Having a clear exit plan will help to mitigate some of the financial damage you might otherwise suffer if your business has to shut down. And if you plan on starting another business in the future, minimizing this risk will be essential to your future chances!