Everyone dreams of starting his own business at some point in life. Being your own business is the desire of everyone since you don’t have to report to anyone what you are doing and why you’re doing in a particular way. There is a worrying trend among the newly started businesses since over 90 percent of those businesses fail before they get into the 10-year mark.
Studies have revealed that more than 50 percent of small businesses collapse before they get to the 5-year mark. This is because most people don’t take their time to research the things that need to be considered when setting up a new business.
Most people start businesses to make huge profits promptly. They don’t take their time to find out the capital required, the hard work they have to inject into business, the knowledge and experience needed to run a particular business successfully, and how long they have to wait for their business to pick to make reasonable profits.
A well-researched business idea is the foundation of every successful business. Think of something different from what is being offered in the market, and your business will automatically stand out since the competition is no longer stiff.
Not everyone is capable of analyzing the market and identify the gaps to exploit. You may discover that there are more businesses similar to the one you’re planning to start, and in such a case, you have to make a well-informed decision. Asking yourself these questions can help you to find out what you can do to stand out among the competitors:
What can I do to change the situation in my favor?
What are the things I can do in a unique way than what competitors are currently doing?
Is there is a possibility that I will get some market share in this field?
No matter how good your business idea is, if it doesn’t solve someone’s problem, it is worthless. Pay attention to others’ complaints; may it be your friends, neighbors, associates, or even family members. Once you have digested those complaints, do the following:
Think of how best you can address such complaints
Find out if you have the necessary skills to offer the needed solution.
Find out if you are passionate about offering that solution.
Ask yourself whether you’ll be comfortable in the provision of the right solution.
If you can do this, then your business idea is viable.
Once you are sure about the business you want to set up, the next step is to gain the necessary knowledge and expertise to start and run such a business.
Although this involves more research and planning, the end will be promising since you will have everything in place to implement your business idea.
Having a business plan in place at this stage can be very beneficial. It will help you to evaluate whether your business idea is viable or not, and if it can generate reasonable profits once implemented.
You can come up with your business idea if you’re knowledgeable in matters concerning business. If not, you can hire an expert in business matters to do it on your behalf.
For the time being, you will have to keep up with your research to ensure your business knowledge is up-to-date.
Studying the market or the demand for the product or services you’re to offer is the next step once you’re confident of starting your own business.
Start by finding out who your customers are. If your business is locally based, you’ll have to weigh the demand for its products and services. If you’re to sell your products or services internationally, then you will be required to familiarize yourself with rules and regulations governing international trade.
A market survey will help you to understand all the information you may need to know concerning the market for your products and services. Necessarily you may want to have a clear picture of the following:
The size of the market
The various sections of the market
How frequent prospective customers make purchases
The percentage of the market shares you’re likely to take
The possibility of the market to expand
Social media has made it easier to reach out to a significant percentage of potential customers from all corners of the world without having to invest heavily.
When starting a new business, it is vital to have an estimate of the actual amount it will take. Here you need to evaluate the entire cost required to start and run the business successfully.
The start-up costs are dependent on the kind of business you’re planning to set up. For instance, the start-up costs for setting up a manufacturing plant will be higher when compared to setting up a retail shop. This is because setting up a manufacturing plant demands one to invest heavily in equipment and machinery, office equipment, land, and set up various infrastructures, among other things.
Once you have set up your business, your concern will be the working capital to equip and run your business.
You will have to take into consideration the inventory that will have to be maintained; the credit suppliers can extend to your not forgetting the credit extended to the customers.
If you’re to thrive in your business, you need to find out who your competitors are and what measures they have taken; otherwise, your stay in the market will be short.
If you’re the only one dealing with a particular product in the market, you don’t have to worry; otherwise, you have to develop an exceptional marketing strategy to cope up with demand and supply.
When planning to start a business, the first thing that should come into your mind is how you will gain a market share. If the demand for your products or services is high, this will be possible to achieve. Otherwise, you will have to come up with strategies that will help your business to gain market share in a competitive environment.
Analyzing the market is all about knowing who your competitors are, to which extent they have established themselves, learning their pricing and marketing techniques, and weighing up their areas of strength and weaknesses.