11 Things You Need to Do Before Starting a Small Business
Weekly Wealth Staff
Dec 16, 2020
When people think about starting their own business, it is tempting to jump right into branding, logo design, setting up the accounting, and other operational aspects of the business. These things are all necessary, but there are a few things that you should do before you get to this point, and they are not always things that make the average business start-up list. Before you jump into opening your storefront, you need to think about these 11 things first.
1. Solve A Problem
At the heart of every business idea is a dream and passion, but unfortunately, passion and dreams are not enough. Only 78% of business start-ups survive past their first year. (1) The number one reason for failure is a lack of sales. To succeed, you have to have a product or service that fills a gap in the market. (2) The first questions that an entrepreneur needs to ask are "What problem does your product or service fulfill" and "Why does your customer need it?" If you can't answer these questions, then maybe it is time to move on to your next big business idea.
2. Examine Your Motivations
One of the main reasons why people want to start their own businesses is because they want to make more money. Perhaps you have dreams of becoming financially independent, or you want to add a little extra income every month. Regardless of your reasons, starting a business for the sole purpose of making money can be a big mistake. Before they get started, most people do not realize how much time, dedication, and energy they will have to dedicate to starting and operating their own business. Psychology has proven that money in itself is not a motivator, but things such as having more freedom, more time with your family, or those big dreams are reasons that will make you want to get up in the morning and do what it takes to succeed. Do this before you move on to the how-to of the business plan.
3. Learn, Learn, Learn
One of the common themes among top CEOs and some of the wealthiest people in the world is that they all spend some time dedicated to reading and learning. This is a process that never stops, and you should never stop learning either. It may mean keeping up with trends in your business and the latest technology, learning something more about marketing, or any other topics related to your business. This should be easy if you have a passion for what you want to do. Learning and personal growth is the key to sustainability and business success.
4. Know Your Market
As a futrue entrepreneur, you probably have great ideas for products and services, and it is tempting to want to rush to the market with these wonderful ideas and inspiration, but this is one of the top reasons for failure. The first thing that you need to do is to get to know your market, and you need to get to know them beyond a surface level. It is good to know their age bracket, income level, and geographic location, but to succeed, you need to understand their personality. The more you know about their drives, motivations, interests, and pet peeves, the more you will be able to design a product that meets their needs.
It is easy to come up with big dreams and want to do everything at once. Perhaps you plan to start with a single shop, but you can eventually see yourself as a national chain. This can lead to over-exuberant growth, which is another common reason why many businesses fail. (1) Keeping it simple, especially in the beginning, is the formula for success. Start by doing one thing and do it well. Once you have that mastered, then you can move on to bigger visions and expansion.
6. Consider All Costs
One of the most basic things that many business start-ups overlook is how much little costs add up and how much it will affect their bottom line. Things like office paper and ink may seem like small purchases in the beginning, but they add up over time. Another thing to consider is how much time small interruptions and tasks take out of your day. That five-minute phone call here and there is quickly eating up your time, and this can cost you more than you might realize.
7. Have a Backup Plan
If you have a regular job and your goal is to eventually quit and start your own business, it is important to make sure this is a calculated decision. Of course, you would not want to start a business if you thought it was going to fail, but it is always good to have a backup plan. This goes back to the old saying about not putting all of your eggs in one basket. The cliche still holds when it comes to starting your own business. The best plan may be a conservative approach that involves working on your business start-up while working your job as a source of steady income. Examine your schedule and daily activities closely. Is there something you could give up, such as watching a television show or scrolling social media? You might find that you have more time than you realized for working on your business.
8. Expect Challenges in the Beginning
The first thing that you need to realize is that opening a business is a learning process. You can expect challenges in the beginning, and by overcoming these challenges, you will learn to run your business better. These challenges will teach you more about your market, how to operate your business more efficiently, and how to grow your business for more stability in the future. These challenges are not to be dreaded or feared, but they are something to look forward to as an opportunity to become the best that you can be.
9. Learn Advertising Basics
Regardless of the business that you are in, you are in advertising, too. Even if you think your enterprise has nothing to do with advertising, every customer interaction is advertising for your business. Your website is your storefront, and even if you offer plumbing services, you need to know the basics of what your website should include and how to present your best face to the public. Not everyone needs to be an advertising professional, but every business owner needs to know something about it to succeed.
10. Keep It Legal
The first thing you need to do is to explore the requirements for operating a business in your state and the local area. The small Business Administration is an excellent source for finding out all of the information or resources to find out what you need to know before you start your business. Starting with this step can help you to avoid hassles in the future and stiff penalties.
11. Don’t Be Afraid to Get Help
The biggest mistake that a fledgling business owner can make is trying to do everything by themselves. Professionals are professionals in their area of expertise for a reason. From the accountant to the web professional, you can do it yourself, but you will probably not do it as efficiently or as well as someone who has years of experience in that particular field. The Internet makes outsourcing services easy. Don't be afraid to use outside professionals to help you put your best foot forward in your new endeavor.
These 11 items give you a road map that will lead to your success. Failure to think about your purpose and what you have that makes you unique is a primary reason why many businesses fail within the first year of start-up. (3) As you can see, there is much more to starting a business than purchasing a website and opening your door for business. Taking the time to think about these 11 items is the best way to ensure that your business achieves long-term success and is the road to realizing your big dreams.
- Frequently Asked Questions, U.S. Small Business Administration, https://www.sba.gov/sites/default/files/advocacy/Frequently-Asked-Questions-Small-Business-2018.pdf
- 10 Tips For Starting A Small Business That You Haven’t Heard A Thousand Times, Forbes, https://www.forbes.com/sites/mikekappel/2017/07/12/10-tips-for-starting-a-small-business-that-you-havent-heard-a-thousand-times-already/?sh=a4a0cb56e19e
- Start Your Own Business, USA.gov, https://www.usa.gov/start-business
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