On your next business? Take a short moment to take a look at things you should know before starting a business.
Understand that starting a business is not as smooth as quotes and inspiration messages made you believe.
It is more like taking a walk down the muddy path for the first time. It can be challenging, scary and can be fun as well. Having engaged in a few businesses myself, I can say there are lots you still need to understand before running the next project.
I have seen many businesses failed due to lack of enough information or experiences before executing them. The world is evolving and only the smart ones keep in touch with the techniques or develop new ones.
Now that I have your attention, lets take a look on things you must do before starting a business. I meant any business, it could be an online business or offline business.
- Study the market.
- Know that you are going to hit potholes.
- Don’t let fear rule you completely.
- Estimate how much it will take to start.
- Avoid giving too much price cut.
- Understand the business could fail.
1. Study the market
If it is a new business, you are going to need all the help you can get. You should not limit your knowledge of the market to the teaching you receive on social media group, mostly on whatsapp group.
A thorough analysis is so important, the reason why people research is to understand if there are demands for the product, reasons why people buy product, are there any declines, competitors, do particular set of people shun the products in the name of religion, societal or cultural belief and the likelihood of success and failure. All these should be put into consideration before execution.
Market research could top the chart if we are trying to pitch them against one another. A lender will even find it difficult to give you a loan unless you have a proper understanding of the market.
Lenders want to know how much you know about the dos and don’ts of business, the loan officer needs conviction before granting that facility.
Google always know best, you should consider using it to expand your knowledge with a bit of high-quality contents from youtube and you are good to go but it will never be compared with real life situation.
2. Know that you are going to hit potholes
I could go on counting revolutionary leaders like Thomas Edison, Steven Speilberg, Henry Ford and Thomas Edison who met some obstacles along the way.
One that amazes me more is Thomas Edison, who tried more than 10,000 times before lighting a bulb. Some of us only tried once without finding the reasons why it won’t work.
When Thomas Edison was asked, why he kept going despite the little chance for success, he said, “I had managed to figure about 9,000 ways why it won’t work.”
Now a question I should ask you is have you managed to figure out why it will fail and what are you doing to counter it?
Don’t be about calculating how much profits you are going to make in the business. Knowing the various obstacles you are going to hit put you on your feet. For example, if you are expecting a huge product from an online shopping site, then you know you need a space to house the wares.
If you are the type that deal in importation, knowing few tips about to shop safely online could go a long way in helping you avoid what could have been pothole. Read extensively and ask questions when in doubt, you don’t know when it might come in handy.
3. Don’t let fear rule you completely
I often tell people that fear is a good thing to a extent but I guess most people won’t agree with me.
What is fear? It is an emotional feeling caused by a perceived fear and danger.
What do you do when you know you are about to misplace your foot? As scary as it can be, you subconsciously move and balance well.
When starting a new business, you are going to be worry about a lot of things but that should not be a reason to back out.
Eleanor Roosevelt, former first lady of United States Of America and activist quoted, “Do one thing every day that scares you.”, the former first lady knew that fear will occasionally portray itself but what you do after is the most important and that is by providing a quick fix.
4. Estimate how much it will take to start
You need to have a proper understanding of what you are getting into which should be part of the market research.
Most times, we underestimate how much it is needed to start a business. As a result, we have problems with the proper running of the business.
For a start, you are going to spend more than already established business owners. For example, if you want to run a new supermarket business, you are going to secure a nice location, furnish with tables and stands, freezer, and so on. All these are needed to put the business on its feet. Subsequently, you will no longer need to spend on fixed assets and others aside getting the products for sales.
You will also incur some expenses. The expense varies depending on how deep you are going. The amount you pay a commercial printer for banners or fliers, the cost of starting a website, payments made to a painter, the cost of hiring a SEO expert and many more are all part of expenses.
If you are running a mini importation business, you won’t need to spend much. Even with just N10,000, you can start it. My suggestion is you need to be patient with yourself and start a list before execution.
5. Avoid giving too much price cut
I realise that people often see low price on a new product as a sign that it is poorly made which is not really the truth. The high and mighty in the society always perceive such but people from the lower class may not find problem with it.
If the product is targeted towards the commoners, it might be wise to penetrate the market with low prices. When you are beginning to find your feet, you can gradually increase it. Be careful of giving out much discount as it may reduce profits, this can eventually kill the business when expenses are more than income generated.
Price skimming is setting a high price on a new product before competitors get the wind of it. It ensures the company has more than enough from sales proceeds due to the high prices set. It can become a problem if the product does not reflect the amount spent to get it.
Hence, I would advise against it unless the product is something that has not been seen before.
6. Understand the business could fail
Knowing that business could stop functioning when it is unable to bring enough profits to cover all expenses. This is not to break you but to prepare you mentally for things ahead.
Every business has its own risks which is mostly caused by business owners not doing enough. Businesses could fail because business owners fail to plan for the uncertainties; other times, it is beyond our means and we have no choice than to succumb.
When it does happen, it is not the time to throw in the towel, rather, it should become an opportunity to learn and reach out to mentors for proper guidance. If they have not been doing so, change them.
Great mentors help you identify your strengths, weakness and highlighting the areas for improvements. When you succeed, it becomes a yardstick for them to gain more mentees, therefore resulting into sense of achievement.