Starting a business can be a very enticing idea. You’ll have the freedom to focus on what you love. You’ll be able to capitalize on things that you’re interested in. The flexibility of not having to work under someone can ignite the passion inside you. And succeeding on your own can give a sense of accomplishment you’ve never even imagined.
The Houston Chronicle reported in November 2020 that there were already nearly 30 million established small businesses in America. And almost 10% of those businesses make more than $1 million a year. 65% of the small business owners start with $10,000 in seed money at most, while the remaining 25% launch their businesses with zero financing.
But no matter how exciting it can be to start a business, there will still be many risks. To separate yourself from the 82% that fails within a couple of years, you need to cover all bases and plan early. But you don’t have to worry, because you are not alone in this. Here are the three main factors to consider when creating a business plan and the six tips you should follow to ensure success.
Plan and Identity
- Define the nature of your business. Since the thrill of starting a new adventure can be overwhelming, you have to do your best to define who you are as an entrepreneur, where you want to be, and what you wish to do as early as possible.If you want to be in the service industry, then focusing on time and expertise is the priority. Since you will be selling services that can either help make people’s lives easier or improve the quality of their lives, the time frame, workload, and skills are the most vital parts to consider.Choosing to sell products, on the other hand, will open another set of choices. You can either go with merchandising or manufacturing. The most common form of merchandising nowadays is online buy-and-sell. You can look for possible products that you can get abroad and find ways to market them locally. When it comes to manufacturing, the combination of labor and raw materials will require a bigger capital. But it can also be the most profitable venture among the three.
- Distinguish who your target customers will be. After defining your business’ identity, knowing who you’ll be selling to is the next big step. Research is very crucial in finding the right people to market to. The age group, lifestyle and financial status, and possible marketing platforms are just a few of the many aspects you must consider in planning your target market.Pro-tip: Start small. It will be good for your branding if you start with a smaller, more specific market. That will help you focus on customer engagement and market analysis easily.
- Make sure your business and daily living funds are separated. This is one of the main reasons why business owners fail. Do not let your daily finances affect the business and vice versa. Having a separate bank account for the business can help you handle your finances better. Remember to think of the long-term goal.
- Know your loans. Getting the capital for business operation can be a breeze because of the multiple loans at your fingertips. But remember that the kind of loan you get might be the blessing you’ve been waiting for or a burden that would bury you.Working capital loans are ideal for growth since they finance daily operations and usually have low interest rates. For a more flexible option, business lines of credit will be better. Business term loans can help if you are aiming to purchase something more expensive. But it has an interest rate that could go up to 30%.But business-type loans are necessarily the only kind that can help. If you plan properly, even mortgages can aid you in your business. For example, veterans can sell their old residential properties, apply for VA loans to purchase a new one, and use the money earned from their previous home to start a business.
- Identify the optimal location for brick-and-mortar shops. Since you already have a target market, it would be best to establish your business near them.But the location of your business is not only for attracting customers. Getting the talent to make your enterprise successful can be easily done if you’re in the right place. If you plan to build a fashion empire, then the people of California can be of help. You can’t expect computer geniuses to leave Silicon Valley and work for your IT Startup in Texas. Location is the key for both marketing and recruitment.
- Study business digitalization. Going digital can help improve the efficiency, consistency, and quality of your business processes. Marketing is better digitalized in this era. If you plan to make an online business, your reach could be global for both marketing and recruitment. Remote work can be done, so it’s also relatively cheaper.
Anything is achievable with unwavering dedication. Just keep in mind that no matter how pumped up you are right now, the most important thing to consider is stability. The business industry is not a sprint but a marathon. And as turtles have proven, slow and steady can also win the race.