Starting your own business can be an exciting endeavor. As a small business owner, youâ€™re free to make your own decisions, guide the company in the direction you see fit, and benefit from complete creative freedom.
Despite the myriad of positive benefits, starting a company isnâ€™t a decision you should be taking lightly. With that in mind, here are seven important things you should consider before starting your own business:
Can You Solve a Problem?
Far too often, prospective business owners are so excited about their idea that they throw themselves (and their money) into making it happen. But one of the first things you need to consider is whether your business idea actually solves a problem. Why do customers or clients need your service or product? Can they get it elsewhere? What is your value proposition (as in, what makes you more valuable than your competitors)? These are all questions you should consider before you jump into entrepreneurship.
Itâ€™s always a good idea to test the market before you invest too much of your personal money and start searching for loans. For example, if youâ€™ve created a line of custom frames, why not try selling on a platform like Etsy before you open a brick and mortar shop or create your own ecommerce store?
Starting small lets you get a better idea of what it takes to run a business. It also makes it easy for you to work out the kinks before you become an official, legal business entity.
The basic idea is getting a feel for what you enjoy and what you arenâ€™t willing to do as a business. For instance, if you invested $10,000, you might find that you donâ€™t enjoy being an entrepreneur or that you want to pivot your business but donâ€™t know how to reverse your initial investment. Think of starting small as an insurance policy against potential pitfalls.
It might seem like a simple tip but creating a business name is much harder than you think. Most people donâ€™t realize it until they start to brainstorm their business name and have taken the first step towards becoming a serious business owner. The fact is, your business name stays with you forever and sets the tone for your brand. If youâ€™re starting your own business and having trouble coming up with a catchy name that isnâ€™t already taken, try using a business name generator for hundreds of potential ideas.
When choosing business names, try to stay away from names that are difficult to spell. You also want to avoid names that could limit business growth in the future. For instance, if you want to sell cruelty-free lipstick, you might not want to have a brand name that insinuates you only sell lipstick if you plan to expand your product line in the future.
Set SMART Goals
The SMART acronym stands for Specific, Measurable, Attainable, Relevant, and Time-Bound. Your business goals should all be SMART. For example, letâ€™s say youâ€™ve created a website and want to generate more leads for your landing page. In this situation â€œgenerate more leadsâ€� is a specific goal. You can choose to measure with a time-bound goal by saying, â€œI want to grow leads from our landing page by 20% this quarter.â€� To make it attainable, be sure your goal isnâ€™t a far cry from what youâ€™re already achieving. And just like that, youâ€™ve created a SMART goal.
Search for a Mentor
Some of the most well-known business owners had mentors. Did you know Facebook founder Mark Zuckerberg was mentored by Apple founder Steve Jobs? Steve Jobs also had a mentor named Bill Campbell. Mentors are there to offer guidance as you navigate the treacherous waters of starting your own business. Theyâ€™ll give you honest feedback because they care about the success and growth of you and your startup. You can find mentors on platforms like Facebook or SCORE.
Thereâ€™s No Fast Lane to Cash
No matter how great your business plan is, there is no fast way to get money. If you think you can get rich quickly, chances are youâ€™ll fail. As it stands, the statistics are stacked against you; half of all new businesses fail within five years. If youâ€™re in it for the money, not only will you be disappointed, but youâ€™ll also lose momentum.
To start a business, you need to be passionate about your work as well as potential customers. Passion and hard work are what keep you moving during the tough early days of low to no revenue.
Create a Financial Plan
It goes without saying, you need money to make money. When youâ€™re starting your own business, create a business model that doesnâ€™t put too much burden on your financial resources. After all, as previously mentioned, the goal is to start small.
Use your personal savings for early funding and be sure to save up and accommodate for negative cash flow during the first few months. Create a budget to ensure you stay on track as you build out the business. Before long, you mays start to see the signs of an emerging, successful business.
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