If you’ve read any of Well Kept Wallet’s Entrepreneur Success Stories or listened to any of our podcasts, you might be considering starting your own business. Entrepreneurship can be a fantastic way to leave the rat race and do your own thing, but there are some important steps you need to take before you start a business. Before you register that business name and start forking out your hard-earned cash on business expenses, consider putting these housekeeping items in place.
Is Business Ownership Right for You?
Define Your Business
What exactly will your business do? Don’t just decide, for instance, “I want to start a consulting firm.” or “I want to sell t-shirts.” and then establish a website. A successful business takes time and forethought, and it takes the willingness to work methodically and purposefully up to launch day. As a type-A person myself, I understand the excitement that hits when you’ve come upon a terrific idea and have a driving desire to take that idea to its limits, however, a business without a clear definition of its purpose will be hard to market, and even harder to run. Take your great business idea and let it stew around in your mind for awhile. Learn to envision the business and what it will look like. Be honest with yourself about the entirety of the business, what aspects of it you would love and what aspects of it you wouldn’t, and see if there’s a way to narrow what you want to do down to the things you really love and leave the rest behind, or find a partner/subcontractor who can perform the parts of your potential business that you don’t truly want to do.
Determine Your Target Audience/Market
Before you start a business, you’ll need to have a clear understanding of who your target audience is and what defines a potential client for the services or products you offer. If you want to make and sell jewelry, for example, what does the jewelry look like? Will it appeal more to teens and young adults, or more to well-off, established women/men? Once you determine your target market, you’ll need to decide how you’ll reach your target market. Is your target market big into online shopping, or not so much? How will you find your target audience, and more importantly, how will you convince them that they want what you have to offer? These are vital questions that need to be considered before you start your business, not afterward.
Assess Your Capabilities and Personality Type
Business ownership is not for everyone. Some people are truly happier and better off being employees. Therefore it’s vital to ask yourself some fundamental questions before starting your business: questions about your feelings about risk and ambition. Knowing if your personality is suited for business ownership and management is key to the success or failure of any business.
Business ownership is a complex animal. Before you start a business, educate yourself on the world of business ownership. Read books, blogs and listen to podcasts on the subject. Become an expert on the ins and outs of business ownership before you venture into your own business. The more prepared you are for business ownership before you start a business, the better.
Create a Business Plan
Before you start a business, you’ll need to create a business plan. A business plan is a written document that outlines the objectives, marketing plans and forecasts for success of your potential business. A business plan is an especially vital step if you’ll need a bank loan to start up your business. A business plan, among other things, will help you determine the start-up costs of your business, and will forecast how long it will potentially take to see a profit. As you work to create your business plan, it might be a good idea to talk with a business coach about how to best go about determining if your business idea has the potential for success.
Business ownership has granted many people the life they’ve always dreamed of, however, business success doesn’t happen overnight, and it doesn’t happen without a lot of hard work. As you consider starting a business, it’s important to keep that in mind. With proper planning and the right idea, you can make your business a successful one.