Have you carefully curated an idea that is perfect to start your own business but do not know where to begin? It is a common problem for new entrepreneurs to struggle with the "How" and "When" questions to start a new business. If you have already launched a business, you know that there are required steps to take in preparation for the birth of a new product or entity. Without those primary steps, you will be turning in circles, spending time and money, and not getting positive results. Starting a new business has a fifty-fifty chance of success and failure, but preparing ahead of time will clarify the risk potential and reduce the cost of failure.
Here are five things you need to consider that will clarify your entrepreneurial endeavour strategy.
#1. Understand Your Niche
Customers are the backbone of any business. When your idea is shaping up in your mind, its purpose should mainly be to add value to the lives of your customers. If your product or service does not fill their need or solve their problem, then your business will not be sustainable. Therefore, it is essential to understand them first.
All big and successful companies have spent money and time on gathering customer information. As a new entrepreneur, you do not have the same resources, but you can still define your target market and understand their needs.
Analyse your product or service and figure out who it might serve best. Then define the specific demographic to target. Remember, having a niche market makes it much easier to conduct business.
If your target market is general, then coming up with strategies will be much more difficult. So, figure out your customer niche and then understand their behaviour, preferences, and tastes.
#2. Locate Potential Sales Channels
Your sales channels are the way you will be selling your product or service to customers. Here are a few examples of different sales channels:
· Digital eCommerce channels such as an app or website
· Retail stores
Of course, there are many others although these are the most common ones. So, figure out the sales channels that will work best for your business. Keep it simple at first so you can start your business on a small scale.
#3. Size Up your Competition
In simple terms, this means to understand your competition. By understanding your competition, you can improve the performance of your business.
Your competition can either be a problem or a source of crucial information. It all depends on how you perceive them. If you want information, then here are three ways to size up your competition:
· Analyse their website such as SEO strategies,
· Research where they are selling their products or services
· Compare their prices and promotions
#4. Have A Financial Plan
Did you know that 29% of small businesses fail because they do not plan their finances well? If you want to avoid being a part of this percentage then you need to have a financial plan.
Understand your current finances and then plan how much you want to invest. When creating a financial plan, here are a few things you need to consider:
· Creating cash flow statements
· Calculating monthly expenses (fixed and variable)
· Break-even analysis
· An estimate of monthly sales
#5. Create A Business Plan
A business plan is not just for you. It is also a great tool to have to show future investors what your business goals and aims are. The plan will help you to answer some of the most important business decisions.
It will also help your business to grow and prosper in the future. A business plan includes important information such as market analysis, business objectives, financial projections, and much more.
Information is power. Have these 5 things before starting your business so you can be well prepared and increase your chance of success.
If you lack the knowledge or experience to conduct any of those essential points, it is helpful to contact a friend with entrepreneurial experience, family member or hire a freelance consultant to guide and coach you with advice that will set you on the right track.