Did you know that 20% of small businesses fail within the first year? That’s a lot of sweat, tears and blood down the drain. Too much goes into a business for it to fail in the early years. The reason for this type of failure is often a result of a lack of proper planning. Without adequate research and planning, any venture is headed toward collapse.
Often, people jump into businesses out of sheer passion and excitement without considering several other factors necessary to make a business work. While passion is essential to set the ball rolling for a new business, many other elements make a business successful. This article treats those crucial factors you must know and take into consideration before starting a small business. Read on.
- Know yourself
We can all agree that this is the first thing to know before venturing into a business. Unfortunately, as basic as it sounds, many people engage in business without knowing themselves. To start with, not everyone is cut out for business.
Entrepreneurship looks quite exciting and can be very lucrative; however, not everyone has the ability to run the race. This is not a bad thing, though. What’s important is for you to know your strengths, personality and skills and apply them in the best way possible.
If you’ve decided that you have what it takes to run a business, ask yourself if you’re well suited for the particular venture you have in mind. A good entrepreneur will still fail if they’re in the wrong field. For example, don’t start a business in marketing if you don’t have the temperament to put yourself out there and market your product to people. Knowing yourself saves you a lot of headaches down the line.
- Research the needs in the market
The number one reason businesses fail is that there’s no market need. They get carried away with the buzz without doing proper research to determine whether the product or service is actually needed.
Some markets are so saturated, it’s going to be a constant struggle to stay above board. Find out the need in the market before making up your mind on the business to start. This will help you know in which area you can excel.
There are many reasons why market research is essential for your business. They help you minimize investment risks, identify potential threats and opportunities and stay ahead of the competition.
A lack of proper market research is an open invitation to failure. Agreed, it takes some effort to do market research, but it’s better to put in the work and thrive in business than to skip the process and pay a costly price for it in the future.
- Be aware of your competitors
Some people have been in the business you’re about to start. To succeed in that business, you must study them. Ask vital questions. Are they doing well in the industry? This question is fundamental as you don’t want to invest in a field that’s not lucrative.
If they’re considering winding up or struggling to survive, you should pause before venturing into the business. This doesn’t mean you should give up on it outrightly, you might be the breath of fresh air the market needs, but you must do your research.
Other questions to ask while researching your competitors include:
- What are their strengths?
- What are their weaknesses?
- What are their customers complaining about?
- What can you offer that they’re not offering?
- How can you stand out among the crowd?
The answers to these questions will enable you to make the right decision about starting the business.
- Observe your environment
Not all businesses thrive everywhere. Factors like policies, regulations, culture and the nature of your environment will determine how successful certain businesses will be. Planning to sell alcohol in religious regions where liquor is frowned upon might not be a wise business move. Also, selling luxury fashion items where people find it challenging to feed is not smart.
Some businesses thrive in certain countries because their policies and regulations allow them. It might be different in your country. Find out. There are stories about people who have invested in land, equipment and other necessities for a new business, only to find out they can’t get a permit for the business or getting it takes a long and complicated process. By that time, the investments would have started depreciating.
- Learn about synthetic ID fraud and other types of cybercrimes
Business operations have evolved in the last decades and most businesses are now digital, giving rise to cybercrimes. This has increased the need for cybersecurity. If you’re starting a business, learn all you can about cybercrimes and how to prevent them. Seon can prevent synthetic ID fraud and other cyber frauds. You need tools like this to battle the scourge of cybercrimes.
No doubt, arming yourself with cybersecurity knowledge is one of the best steps you can take before venturing into a business. Most cybercriminals take advantage of the naivety of new business owners and rip them off. Being aware of how they operate and how to protect your business from them will help your business grow.
- Familiarize yourself with eCommerce platforms
If your business is not in the eCommerce sector, you will most likely be dealing with a couple of the platforms in the course of your business. Understanding these platforms and how they operate will enable you to do business the right way. A B2B eCommerce platform comparison will help you decide on the best option for your business. Don’t wait till you start a business before learning about them, do your homework ahead and gain some mileage.
- Find out about insurance
A lot of small businesses skip insurance because they feel it’s not necessary in the early stages. Nothing can be further from the truth. Knowing about insurance and how it can benefit your business is a smart move. If you’re into car hauling, getting the best car hauler insurance is one of the best decisions you can make for your business. This insurance usually combines other types like bodily injury liability, property damage liability, comprehensive coverage, medical payments and collision coverage. Knowledge about insurance is surely one of the ways to equip yourself before starting a small business.
- Know your books
There’s no way you can do business without bookkeeping. You don’t have to be an accountant or an accounting genius, but you have to know the basics. The importance of bookkeeping for your business cannot be overestimated. It helps you to do the following:
- budget accurately
- maintain an organized record
- prepare for tax
- comply with government regulations
- set and achieve business goals
Equipping yourself with bookkeeping knowledge before starting a business gives you an edge over those who don’t and helps you navigate murky financial waters.
- Learn some marketing
As a small business owner, you’re your product or service’s first and most important marketer. Even if you hire experts in marketing, you are the visioner and know more about the product or service than any other person.
Besides, when you’re just starting, chances are you won’t be able to afford marketing experts just yet. Therefore, to help your business survive those delicate early years, you must arm yourself with every marketing tip you can lay your hands on.
The benefits of marketing for your business include:
- earning the trust of your target audience
- boosting sales
- growing your market reach
- growing your brand
Knowing where to start with marketing when you know very little about it can be daunting but don’t be discouraged. Get materials that can help online and offline and hit the ground running. Start early to learn the skills needed for marketing your business and reap these benefits in the long run.
Equip yourself adequately beforehand and watch your business thrive
Business success doesn’t just happen; it is a product of careful planning and practice. To get the right results, you must take the proper steps. One of the steps to take before venturing into business is equipping yourself with the right knowledge. This way, you avoid a lot of mistakes you would have made if you were not well prepared.
Some of the factors you must consider before starting a small business include knowing yourself, researching the need in the market, being aware of your competitors, observing your environment and learning about cybercrimes. Others are: familiarizing yourself with eCommerce platforms, finding out about insurance, knowing your books and learning about marketing. This knowledge gives you an edge over others and sets you up for success.
Moyofade Ipadeola is a Content Strategist, UX Writer and Editor. Witty, she loves personal development and helping people grow. Mo, as she’s fondly called, is fascinated by all things tech.
