We live in an entrepreneurial age. An age when no business idea seems impossible or too difficult to bring to life, provided that you have a sound business plan at your side. In such an opportune environment, your business idea might just be the next big thing to take the local, or global, market by storm. However, that doesn’t mean that there aren’t many perils and seemingly insurmountable challenges on the road to long-term success.
In fact, if you take into account that more than 50% of new businesses fail within the first four years, then it only stands to reason that you should plan and prepare for this grand step thoroughly in order to avoid a crippling fate. Here are the four things you need to consider when starting a business, things that will help you pave the road to a successful future in the industry.
Conduct a thorough market analysis
When an aspiring entrepreneur thinks of launching a company, market research might sound like the least appealing task on earth. Having to sit down for a couple of months to learn the ways of the local economy, the consumer market, the competitive arena, and figure out ways to turn that raw data into actionable steps that will help your company kick off is definitely not an easy thing to do. Nonetheless, market research still is the foundation of successful entrepreneurship.
For starters, you will need to be merciless about your own idea, and scrutinize it for every fault it might have. Start by creating a SWOT analysis of your future company. What are your strengths, and what are your weaknesses? Where do the most lucrative opportunities in the market lie, and what are the real threats that might run your project into the ground? Use these findings to refine your idea, adapt your approach, and craft a winning business plan.
Pick the perfect business structure
There’s never just one way to achieve something truly amazing. Success comes in many forms, and you need to be smart about your choices and the decisions you make from the very start if you are to build the success you deserve. With that in mind, it’s important to know that launching a brand-new company all on your own is not the only way to realize your entrepreneurial dreams.
If there is a strong brand in the market that you would want to be a part of, then you can consider becoming a franchise owner. If you want to understand what is franchising, in a nutshell, it’s a way for brands to expand their business, and a way for entrepreneurs to mitigate risk and realize their dreams without having to do it all on their own.
Whether franchising is right for you or not will be determined by the amount of capital you have, the socio-economic trends of the market, and whether or not you’re willing to build a new business from the ground up or if you’d rather run your business under an existing brand with an stablished reputation in the industry.
Whichever path you choose, know that choosing a business structure will be a crucial step that will define your future.
Make a sound financial plan
Investment capital, operating cash flow, growth investments – all of these terms can seem quite daunting to a novice entrepreneur. The sheer amount of money needed to launch a company and keep it afloat until the revenue starts rolling in is high enough to deter many an entrepreneur from going through with the idea. Combine that with the fact that you shouldn’t expect to make a profit until the second of third year, and you have yourself a dangerous financial conundrum.
This begs the need to secure adequate finances well before launch day. You might feel encouraged to step into the competitive marketplace as soon as you obtain the investment capital, but you should really hold your horses until you’ve found a way to meet your company’s cash flow needs for the year to come. Be sure to make a comprehensive financial plan consisting of analyses, financial projections, seasonal projections, market revenue margins, initial investments, overhead expenses, payroll, growth expenses, and of course, marketing costs.
Create a comprehensive marketing strategy
Marketing is the driving force behind every successful 21st-century business. You need a strong marketing strategy if you are going to get your brand in front of the right audience, and connect with the consumer market enough so that they feel inspired to do business with you. Needless to say, this is not an easy goal to achieve in such a saturated economy.
Your marketing strategy should have clearly-defined goals and tactics that will put your brand on the online and offline maps. Focus on building your reputation online in order to reach a vast global audience and create that highly sought-after buzz around the brand. Offline, you should focus on building a community around your cause, and becoming an active part of the local market. Organize events and promotions that will get people to visit your store and get to know the brand they are soon to fall in love with.
Starting a business is by no means an easy task. Between the financial requirements, the amount of marketing effort required to build a name in the industry, and the ever-fluctuating consumer trends, it can be quite daunting to take on such a challenge. Nevertheless, these essential considerations can help you mitigate some of the risk and pave the road to a profitable and successful future in the industry.