Back to business
Starting a business for many people is usually about the excitement of getting to be your boss and making a profit, but we find that many small business owners leap to establish their businesses without prior knowledge of what needs to be done.
Starting a business sounds thrilling, doesn't it? But before you do, there are questions you need to find answers to; to ensure you have done your business bid the right way so that you have a chance to succeed.
We had a chat with Accountant and financial enthusiast Elizabeth Joshua-she gave us insights on what questions to find answers to while you are about to start a small business.
I believe that the first question you need answers to as a prospective business owner is," what do I want to sell?"
Now, here's not the time to think of a million other people already providing for that need. Just think of what solution you want to offer or need you want to solve. Do you want to sell food to satisfy hunger? Do you want to sell delicate bracelets? Think of something that you see yourself selling because, believe it or not, business is very personal. And it would help if you didn't sell something you cannot represent. If it does not excite you, you will see yourself dumping it in no time. This is an important question to ask yourself because it makes you identify your 'why'.
The next question should be," Who are my competitors?"
Now that you have answered the first question on what to sell. It is important to note that thousands of other people might already be selling the same thing. Your objective is to identify these people – they are your market competitors. You want to see how they are selling, what they are doing differently, and the target audience that patronizes that kind of product/service—asking yourself this critical question enables you to understand the product and how to enter the market like an expert. It also raises ideas in your head on what you can do to differentiate your business from the crowd.
Moving on, you have to identify whom you want to sell your products to, "Who is my target audience?"
Most people start a business and want to provide for ALL audiences immediately. However, it is not strategic to do so. Instead, when penetrating the market, you should consider segmentation of the audience you want to direct your product/services. This will give you a direction toward product marketing, and once you have been able to conquer that target audience, you can adjust to a broader audience. But first, ask yourself what people, age group, geography, and gender you want to focus your marketing strategy on.
Last but not least, think of where to get your capital from, "How do I raise funds for the necessary things?"
If you don't already have a saved up fund or an investor, take a pause and look for ways to start your business. At the early stage, there is no pressure to start big. We are in an internet age, so you may not even need a physical location just yet. But you will need funds for the fundamentals: purchasing your inventory, internet costs, and registration costs. You will need to ask yourself how to come up with this basic fund. Whether through constant savings, family and friends, or a loan. Your source of finance is very important. You do not want to put so much pressure on your business in the early stage because you need to pay off a loan. Savings can be the best and least pressuring way for small businesses to kickstart and run effectively. However, if you are a high-risk taker and decide on a loan, note that you may not make profits early on, so defer your loan repayment till at least 6 months.
Finally, you are at the stage where your small business is up and running, but you realize that you have to think of creative ways to ensure your success, "How do I manage my business?"
Mismanagement is the cause of many business failures. From the moment your business kicks off, it is essential to put your capital (starting funds) to the right use. Don't overlook things like registering your business, as it is very important to legalize your business from the very beginning for diverse reasons. Then, your business's finances are essential because the end goal is profit-making. You should be able to record and track your inventory costs, selling costs, revenue, and expenses. You should be able to see what's working and what's not financially to adjust costs and make more profits. You can outsource this aspect to an accounting app such as Kippa. It is free and easy to use and helps you with the financial management of your business.
You have to think of your business goals and aspirations and then take the proper steps to kickstart your business the right way. Although many other factors would determine whether or not your business would be profitable, the above questions, when answered correctly, gives you a good head start.