So you have the money, you have the time and you have the determination needed to start a business. But you lack one essential thing and that is the idea.
Choosing the business to venture into is a process that requires all the focus and time it deserves. According to Myownbusiness Institute, you need to strategize and put as many factors as possible into consideration, because this will determine whether your business will fail or succeed. Here are some of the factors you have to consider before finally making your decision.
Competition Within the Industry
One thing you cannot avoid in the business field is competition unless you have a completely new product, and even that, it is usually only a matter of time before a new competitor enters the market. Therefore, The Balance recommends that you analyze the level of competition of the business you want to start. While doing this, you should also consider the geographical location. Since a good business should seek to solve a problem, it is not strategic to set up a business to solve a problem which is already being solved by several existing businesses.
Capital Required to Start the Business
No business can start without getting startup capital, which is no easy task. While the funds do not have to necessarily come from your pocket, you need to find money to fund your business operations, but options for new businesses are quite limited.
For this reason, before you plunge into any business, you should do a thorough calculation of the amount of capital it will need. It is always wise to go for the one that does not require a lot of spending, like the service offering businesses. However, if that is not the type you want to venture in, and you don’t qualify for business loans, you can always look for funds from investors, crowdfunding or other funding options.
Is the Product Worth a Repeat Buy?
According to Entrepreneur, for a product to be a good business idea, it has to be one that will be bought repeatedly. While it is true some people start businesses just for fun, most people usually aim at earning income. However, it becomes very difficult to get the income if your product is only needed once in a long while. If you are just starting a business, make sure the product is not only required in certain seasons, but it is required multiple times throughout the year. If your product is so good your customer only needs to buy it once, you’ll say goodbye to additional revenue.
Practicality and Realism
More often than not we are told everything is possible, and that we should go for our wildest dreams. However, when it comes to business, especially your first, practicality is one thing you have to look into. Is your business idea doable? Diving into a business because you have spotted an opportunity and because it has always been your dream is not the way you should go about it. In fact, practicality pretty much covers all the factors that need to be considered, since you have to find out if the capital is available, if there are skills to carry it out and if the location is usable among other things.
You can always go back to chasing your dreams after you have a stable business already running.
Skill set is another factor that needs a lot of consideration. While there is usually the option of hiring other employees, it is wise to have knowledge and skills in the business yourself. This is also important because, during the offset of the business, you may not have enough money to hire workers, and therefore you will have to do many of the tasks yourself.
6. Legal documentation needed
Some businesses require lots of legal processes, and therefore if you are in a hurry to start your business, such that require many legal processes should be on your to-do list.
7. Target customers
Whose problems do you intend to satisfy? Are they within the location in which you want to set the business? These are some of the questions you have to ask yourself before finally making the decision.