Before starting your business, considering a few basic concepts and questions can help clarify your expectations. Understanding your market and industry, knowing your skillset, formulating a business plan and understanding legal, financial and communications issues are all key to laying a foundation for success in the early years of your business.
1. Test your business idea
2. Understand the industry: Do your homework
3. Assess your management skills
4. Formulate a business plan
5. How much money will you make and how much do you need to get started?
6. Investigate legal issues relevant to your business
7. Identify and develop key business relationships
8. Who are my customers and how will I reach them?
Test your business idea
Speak to friends and associates: How do they react to your idea? Listen to their input and modify your approach appropriately.
Questions to Ask
Would you find this product or service useful?
Do you think the product package or service name successfully address the target market?
Understand the industry: Do Your Homework
Make sure that you have a thorough understanding of the industry.
Questions to Ask
How big is the industry?
Is it growing?
Who are the key players?
How do they compete?
Assess your management skills
One key to a successful business is getting the right people to work with you. Hire appropriate people to complement your skills.
Questions to Ask
What key management skills are required?
Do I have these skills?
Are there courses I can take to learn them?
Will I need to bring on a partner with these skills?
Formulate a business plan
Successful businesses use business plans. A successful business plan contains the following information:
The nature of your business
The management and ownership details
The market for your products and services
The products you offer
Operation
Historical and/or projected financial information
Questions to Ask when creating a business plan:
What are my personal goals?
What are my business goals?
Are my personal and business goals compatible?
How much money will you make and how much do you need to get started?
As you start formulating your business plan, crunch some numbers to determine how much money you will make running this business and how much capital you will need to get your business off the ground. Plan realistically.
Questions to Ask
How much money will I need?
What sources of capital are available to me?
Will this be enough for the lifestyle I envision?
Investigate legal issues relevant to your business
Do a name search. Think about the legal structure of your business: are you starting a sole proprietorship, a partnership or a corporation?
Investigate the options available for structuring your business and the implications of each. Register your business name and investigate all other regulatory compliance requirements to run your business.
Questions to Ask
Are there municipal bylaws, such as zoning, that I need to consider?
Am I going to run a sole proprietorship, a partnership or a corporation?
What are the legal implications of each?
Identify and develop key business relationships.
These relationships might include suppliers and professionals such as lawyers, accountants, and bankers. Investigate the benefits of joining a trade association or another networking venue.
Questions to Ask
What benefit will I receive from each key relationship?
In what areas of specialization do I need support?
Who are my customers and how will I reach them?
Knowing who your customers are and how to reach them is key to business success. Before you open for business you should have a number of key customers identified and ready to buy your product or service.
Questions to Ask
How do I hook people?
If I advertise, what medium should I use?
What is my image? Is it consistent?
