Starting a successful business can be the most rewarding accomplishment of your professional career. The potential to be your own boss and to use your passions to fuel your income make it seem like a no-brainer. However, there are a lot of things to address before you pull the trigger to launch your business. If you'd like to start a business, consider the following three things before you take the plunge.
Your motives
Evaluate your intentions when you decide to start a business. Why exactly do you want to do this? Is it money, freedom, outside pressure or some other reason? Starting a business is probably more work than going to your steady day job and lacks the security of a regular paycheck, so it's important to move beyond the daydream.
Identify your strengths, weaknesses and areas of expertise that can help or hurt your progress. Knowing where you stand at the beginning will help you narrow your focus to what you want to accomplish. This can be hard because the process may bring some insecurity, and that's to be expected. The point is that you identify information you need, gaps in your abilities and your plan for action.
Your market
The more prepared you are to enter your chosen industry, the better. Just like the self-evaluation is meant to get you thinking, analysing the market is crucial for identifying holes in your proposal. Determine the competition, target market, necessary investment and the problem or need that your idea will solve.
Use the SWOT analysis method to identify your initial concerns. A SWOT analysis is an exercise where you name your strengths, weaknesses, opportunities and threats. You should do research on your industry to get a complete grasp. Trade publications, expert blogs, conferences, classes and a general Google search can provide the necessary background to complete a thorough analysis. From this activity, you can build your business plan and adjust as the market changes.
Your plan
After you've identified your motives for starting a business and under what conditions you will do so, it's time to build a plan. Traditionally, a business plan is for seeking funding. But if you aren't pursuing funds, a business plan can - and should be - your roadmap for how to run your business.
A business plan should include a company overview, products and services, target market, marketing and sales plan, your competitive advantage, goals and metrics, a budget and a financial plan. None of these are set in stone - what is important is the practice of writing them down and understanding your business assumptions. Making a clear plan will help to identify your needs as you launch your business or uncover areas where you haven't given much thought. Even better, you can use a plan to explain your ideas to friends, family and funders and solicit their advice.
Building a plan is the best way to implement your vision for your company. It will also help you understand how much money you need to start, and when your business should begin to break even. The financial forecast you complete with your plan helps you understand your pricing, and your costs, and ensures that you create a solid plan for profitability and cash flow management.
Whether you will be starting your first or your third business, expect to make mistakes. This is a necessary part of the process. The most important thing is that you learn from the missteps and adjust your business plan as necessary. With your motive, market and plan in place, your business can remain agile after you take the plunge.
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