Who does not want to start their own business? Having your own business gives you control over your work and decision-making. So, starting a new company can be a dream come true for anyone, but it is easier said than done.
Figuring out the start of your business: what to do and what to avoid can be so overwhelming that you might drop the idea of starting the business altogether. But once you pass this mental impasse, you can quickly move ahead with your vision.
There are countless ways to start your own business, but some are much more effective than others. We share those effective ways and tips to start your business.
- Increase your finance literacy
When starting your own business, you must be heedful about managing finances. Therefore, it is better to have some expert-level training in finance, certainly more than a basic degree in finance, to effectively manage your limited business investment.
Proper education in finance with some high-level qualifications such as a CFA (Chartered Financial Analyst) helps you overcome financial glitches you might face as a new business owner and make better and more informed decisions.
It will also eliminate the need to hire financial experts to look after the money matters of your business. Hiring the right person is costly as you will have to pay a considerable salary.
Even if you don’t have a background in finance, you can still enroll in a CFA program with just a bachelor’s degree. For preparation, use the Wiley CFA prep guide to give mock tests. These mock tests will help you gauge your professional competency in this area and prepare you for the exams.
A CFA qualification increases your skills in portfolio development, investment tools, valuing assets, and wealth planning. The more skilled you are in doing these activities, the more effectively you can manage your business’s finances.
- Be clear about your motivation
Firstly, you must be clear about why you are starting the business. What idea, motivation, and vision instigated you to start your venture? Is it your angry and annoying boss? Or is it the salary that you are not happy with?
If your current job is the only reason, this might not be a strong and viable reason for starting your own business. Because, with a job, you always have the option to apply elsewhere and get a better opportunity. So, your reason must be more concrete than this.
Something like floating a new product in the market, addressing a problem that customers are facing and has been disregarded for quite some time, etc., are more viable reasons.
The stronger your impetus to start your business, the more your motivation to pass the hurdles.
- Be sure that there is a demand for what you are selling
The biggest mistake many new business owners make is starting their business in a rush without proper research. They are so excited about starting their new business that they fail to gauge the utility and demand of their product.
Even if you have developed a nifty product, it becomes a failed endeavor if you don’t find people to sell it to. So, never assume that your product will sell or there is a market for it unless you have thoroughly researched the idea.
Talk to potential customers, show them your product, and ask if they would be interested in buying it.
- Conduct a formal market research
A more streamlined way to know the preferences of your potential customers and demand for your products is to conduct proper market research.
Depending on the product or service you intend to sell, you must have your set up at places where you can find your potential customers. For instance, if your product is a food item, you may establish stalls or makeshift kitchens in shopping complexes, marketplaces, colleges, and universities for tasting.
Record your customers’ responses, views about your product, willingness to buy it, and most importantly, suggestions.
What would they like to see different in your product? Is it the taste, the spices, the size, or the shape that must be a little different?
Once you have all the responses, you can easily develop a sellable product.
- Know about your competitors
Competitor analysis is another factor you must never overlook when starting your new business. Are other businesses selling the same product or something similar to your product?
To succeed, you must extensively study your competitors, the size of their operations, and their selling mechanisms and model.
You would never want your business to be devoured by the sharks in the market. If your idea is good, they will either try to buy it or make something similar and throw you out of business due to their large customer base and marketing budget. And, you cannot win with a small budget against a big business unless your product is based on an intellectual secret they cannot steal.
- Make sure your business is scalable
Start your business with the idea that it will grow and expand in a few years. So, develop a scalable business idea that helps you accommodate new customers without spending additional money.
For instance, your business can be based on a subscription-based model or a franchise business that grows when others buy your franchises.
- Be sure about your tax payment requirement
When you start your business, your company might be liable for paying various taxes, including income, sales, self-employment, property, etc.
Contingent to your business model, you may be required to pay additional taxes such as unemployment, payroll, etc.
Discuss with a business lawyer about tax requirements to see how much tax you will be paying. It will help you decide if you are in a position to start a business or should you wait for a little.
The thought of starting your business can be exciting. But it also means taking care of various aspects governing a new business startup.
You have to consider your competitors, customer preferences, demand for your product, and laws related to taxation. The more mindful you are, the fewer slipups you will make, and the process of starting your business will be smoother.