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When you plan on starting a business, it’s natural to start having all kinds of doubts and worries. Is your idea for a company good enough? How easy will it be to grow it in the economy? Will it be able to return on any investments? Yes, there’s no telling how successful your business will be until it actually starts trading. However, there are a range of things you can do in preparation. In this post, we’ll look at the best ways of testing out your idea, and preparing your company for a successful future.
One of the most important things you can do before starting your business is researching your industry. That is, if you have an industry in mind! Many people have aspirations about starting a business because they want to work with what they love. However, many others want to do it just to be entrepreneurs. If you haven’t already settled on an industry, then make sure you find a special niche within a larger, healthy industry. For example, some of 2016’s healthiest industries are green construction, translation services and educational technology. As you narrow down the niche your business is going to fit into, try to seek out some industry veterans and settle on a mentor.
Sources like the SBA , the Women’s Economic Development Council, and other organisations are great for finding information on business niches. Reading some magazines that relate specifically to your niche would also be a good idea. If you want to go into marketing, then subscribe to Adweek. If you want to open in finance, then start reading Bank Director. No matter what niche you’re planning to target, you can be sure there’s a publication for it. A full list will be available on this website. Aside from that, general business blogs like this can also give you valuable industry insights. Whether you want to run a small, independent shop or a multi-national giant, knowing your industry well is integral to success.
Sizing up the competition is another important step in preparing to launch your business. You’re not going to be able to find a completely untapped market unless you invent as new product. If your business doesn’t keep in-step with its closest competitors, it will go under faster than you’d imagine. The best way of sizing up the competition is by experiencing it from the point of view of the customer. Let’s say you intended to open a restaurant in your local area. The best market research you could do is eating out at all the other local joints. Study the quality of the food, pricing, and customer service. You should also take note of any little “extras”, such as live musicians or valet parking. It would also be important to study the kind of diners who frequent competing restaurants. Do they appear white collar or blue collar?
Is there a high concentration of students, seniors or families? You could even sign up to the competition’s mailing lists, so that you’re always being updated. After that, considering finding out about other business’s structure, management and partnerships. As long as you stop at full-on industrial espionage, use everything in your power to find out about your closest competitors. If you want to beat the competition, the best way to start is becoming their biggest fan!
As your business plan starts to come together, make sure you don’t get too overconfident. Getting a business off the ground first place requires at least some Disney-esque “follow your dreams” attitude. However, if you go into it without doubting yourself at all, you’ll be setting yourself up to fail. At every little phase of your business plan, think of everything that could go wrong. As these kinds of risks come up, you should be analysing them and thinking of ways you can protect our firm against it. One of the most commonly neglected things in the planning phase is funding. Every business operation needs some capital to get started. Having doubts about your financial resources is never a good sign, but we’ll look at that in more detail soon. One common start-up problem which a lot of people neglect is growing too fast. I know, you want your business to be a success.
Right now, it may feel like there’s no such thing as “growing too fast”. Be warned though. If you have no experience with running a business, and yours grows much faster than you’re prepared for, all kinds of problems can spring up. You’ll find the whole company extremely hard to manage, and the quality of your products or services may end up slipping. In all this chaos, a lot of new entrepreneurs buckle under pressure, and end up selling their company to the first bidder that comes along. I’m sure this isn’t the future you have in mind! Think through every move thoroughly, and remember to doubt yourself once in a while!
Make sure you don’t skip over the funding phase of your preparation. As that old saying goes, money makes the world go round. This is especially true when you’re starting a business! As you begin to get a structure together, make sure you’re thinking about where the money’s coming from. Will you have enough capital to bootstrap your business in the opening period ? Perhaps you’re going to need to apply for a small business loan? Some entrepreneurs try to set up with too little capital, and end up driving their business towards bankruptcy. Others try to pitch themselves straight to investors, without considering if they really need to or not. Getting investors interested in your company takes a lot of work to start with. After that, you’ll need to put up with all kinds of scrutiny, and sacrifice control over a certain percent of the whole operation. However, for certain industries and business models, this is the only course of action. Some of the alternatives include borrowing from your family and friends, or taking out a second mortgage. Funding your business is something you seriously can’t afford to neglect, so start doing your research now. If you are going to approach some professional investors, then don’t send out a single email until you have a great strategy in place.
Finally, learn a little about marketing. If you’ve worked in marketing before, then you’ve already got a lot of great skills for running a business! If not though, you need to start educating yourself immediately. Sure, you’re going to be wearing many hats as a business owner, and marketing is just a single part of it. However, marketing changes faster than almost any other industry. It’s hugely important to find out about the most effective and modern tactics which tie in with your niche. To start with, get 110% clear on who your customers are. The most effective marketing campaigns are tailored to the customer, and not the business itself. I don’t just mean writing down a gender and approximate age here.
You need to be willing to carry out extensive market research, and hone in on a specific customer profile. In 2016, perhaps the most important part of marketing is your company’s online presence. More and more people use the internet as their first stop for buying anything. Furthermore, social media has become one of the most powerful marketing tools any kind of company can use. Get familiar with all the relevant marketing conventions, and keep updated as time goes on. You could have a truly revolutionary idea on your hands. However, if you want it to take off, people need to hear about it!