In this article we are going to talk about the what are the things to know before starting a business. If you’ve got the right idea and feel that it has great potential in the market, this is something you’ve got to read to make yourself aware of the things you should consider before setting up your business. In this era of start-ups, setting up and venturing into new businesses has become such a common affair.
But every single vision does not get converted into reality and this may be because of several reasons. It is as important for you to be aware of certain things as it is to come up with a new idea. No aspect can be neglected, and no stone should be left unturned if you want your business to flourish in this competitive corporate world. Every single move of yours will be anticipated by your competitors, every small mistake you make will hit you back in the future in magnified terms and every prospect you fail to turn into a customer is going to make your business suffer.
What Are The Things to Know Before Starting a Business?
A lot of these events are inevitable and will come your way during your business. But you can be more prepared and make your business less vulnerable by knowing these things thoroughly before starting your business. So, some of the things to know before starting a business are discussed below in detail.
1. Properly identify the gap you are trying to close
Every problem existing in the market is an opportunity for you to solve and come up with a business plan. You must keep an open eye for such gaps and leverage on it to come up with an efficient way of solving it in order to reach out to people. This is because only when people feel your business is capable of doing so and will benefit them, they will be interested in it. Identifying the gap is not a piece of cake, it requires a lot of market research and analysis to understand which ones will flourish as a business. Once you have an in-depth knowledge about the reasons and effects of that gap, you can start working on it to eliminate these factors and give people a solution which has to have the capacity to make them feel it will solve their problems.
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2. Target audience
Customers are king, and they are the only ones who have control over the success of your business in the running years. You must be very clear with the kind of people you intend on targeting with your business because not every business will have a relevance to all types of people. You must perform strong market analysis and identify the set of people you will be targeting, as they are the ones who will make or break your business.
Identifying the wrong target audience can have serious implications because there will be no valuable returns to your business, and it will start going downstream as your business has no importance to this group of people. To avoid such situations, you can perform Segmentation-Targeting-Positioning (STP) analysis which will help you segment your customer base based on similarities, target each segment in such a way that their needs are satisfied and position your product in the minds of people as a solution to their existing problems.
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3. Be aware of your business environment
The business environment is highly dynamic and varies from industry to industry. Before you start your business, you must be aware of the kind of market you are entering into and the challenges you will face as soon as you step foot into it. Without having proper knowledge about the environment, you will not be able to plan your further moves or be prepared for further change.
Your business will not be in par with the existing trends and it will fade away even before it can become successful. You must thoroughly understand the present and future scenario of your industry, analyse, and forecast the demand patterns and the scope of your business. The businessmen must be prepared for all possible circumstances and make contingencies in accordance with your predicted challenges. You should also have proper understanding about how the industry works so that you can keep making accommodations and be adaptive.
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4. Sources of finance
For you to set up your business, you must have adequate capital and know how to finance your activities. Identifying potential investors or using your savings, a lot of amount of money will be put into your business and it requires careful handling. Your accounting and financial analysis must be extraordinarily strong and only then you can keep your business under control, based on these forecasts. You should anticipate your operating expenses and all the money required for satisfying your asset requirements. Apart from this, make plans keeping in mind the worst situations in order to avoid major losses and immediate backup facility to rejuvenate your business.
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Now we all have creative ideas that we think can be translated into a successful business. This is not at all true. Not every out of the box idea will be feasible and achievable. It requires you to pay attention to several facts before deciding the feasibility of your business. There are several analysis methods you can perform in order to assess the feasibility of your business. You can perform the PESTEL analysis which includes political, environmental, socio-cultural, technological, economical, and legal analysis of the feasibility of your business. It is important for you to know each aspect of your business and test its feasibility. Only when your business proves to be feasible, you should go ahead with your idea.
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The minute you step foot into the market, attacks and moves have already started being planned against your business. A close watch is kept on your business and every move is anticipated largely in order to push you down and hinder your success. You must be two steps ahead of your competitors and analyse all your potential competitors well in advance. Compare the strengths, weakness, opportunities, and threats of your business along with your competitors and try converting their weakness into your strengths and their threats into your opportunities. Your competitor brings out the best in you, pay close attention to them and don’t neglect them even after your business may be well-established.
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You can not set up your business any where you wish to. It requires yet again a lot of research and analysis to find the right location where you will get the best returns from your customers. Prospective locations must be identified and each and every detail about it must be studied in order to understand the type of people that form that area and whether it will be best suited for your business to be set up in that location amidst those people. The location you select must be universally accessible and not in a remote and unknown area. If it is in the heart of a locality, the chances that it will get noticed is much higher.
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8. Potential suppliers
Your suppliers and vendors play a key role in deciding the success of your business. The tough task here is that most of the best suppliers will already be serving bigger and well-established companies and will not prefer to switch from them to your new business. You must be convincing enough and able to instil trust in them or be able to identify newer suppliers for your business. Suppliers selected must provide your requirements at the most affordable price possible and with no compromise on quality. Keep and eye out for all the available suppliers and select the one you feel will be best suited for your business.
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9. Marketing strategies
This is one of the most important aspects you must know and be prepared with at every stage of your business. Right from the time the product enters the market, strategies must be formulated in order to make it as attractive as possible to your potential customers. Strategies must be highly accommodative of changes and be flexible to incorporate the newer and upcoming trends. Through the growth phase till the maturity phase, your marketing strategies must be innovative and cost efficient and this is how you will be able to reach a larger audience and stand out of the crowd. They are the key in converting your prospects into clients because the way your put across your product or service will have a great impact on the minds of your customers.
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10. Legal considerations
This is again particularly important to know before starting your business. There are several aspects one must consider before setting up your business in terms of legality and compliance with the rules and regulations. Any such deviations may cost your business a lot in pecuniary terms as well as in terms of its goodwill and brand image. You must carefully read all the rules and regulations and acquire the necessary licenses and permissions in order to set up your business. None of the activities you do must indulge in even the tiniest malpractices and must be in accordance to the government compliances. Strictly abide to the law right from the time of registration to the time of winding up and you will be fine.
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Setting up a business is not a piece of cake and has so many aspects beyond our imagination, to be taken into consideration. Every move and every strategy must be applied at the right time, only then it will prove to be effective. You must come up with a strong business plan which consists of all the different aspects and be as presentable as possible.