You like to start your own business and that is excellent!. You have now come up with a business idea. In reality, now the idea on your mind requires certain information to be gathered before determining the feasibility to move forward. Therefore, a careful research and analysis will always help in evaluating the concept and assist you in assessing your idea.
Every business is unique and has its own challengers. Taking time and effort to explore the concept will help to identify the uniqueness of the business. Apparently, answering the following questions will help in defining concept clearly.
- What business will you be in?
- What product or service will you provide to your customers?
- Who will buy your product or service?
- Why will your customer buy from you?
- When will your customer buy your product or service?
- How will your customer know you have products or services available?
- How much will your customers pay for your product or service?
Market research provides data and information about the industry and its’ customers. It tells who the customers are, where they are, and how large the potential market is. Through research, it is possible to gather certain information and data you certainly need, such as:
- Size of your potential market;
- Customer lifestyles and buying behavior;
- Specifically who the customer buying the product or service?;
- Determine demand for your product or service;
Market analysis helps the business owner understand the business environment positively. It is through market analysis that a business owner determines if a certain business or industry provides an attractive opportunity. Market analysis provides competitive analysis which includes:
- Industry analysis: Evaluates the industry’s overall opportunity and attractiveness, including ease of entry, availability of substitutes, and buyer or supplier issues;
- Competitor analysis: Who are the primary competitors, and what are their strengths and weaknesses?;
- Business analysis: Identifies the strengths, weaknesses, opportunities, and threats of the identified market.
There are many decisions that must be made before starting any business. Also, right approach to resolving important issues in order to minimise the risk will increase the success rate. When taking decisions there are important topics to consider and recommend to have the basic knowledge of:
- Entry options;
- Selecting and using professionals;
- Selecting a business location;
- Minimizing your risks.
Many start their own businesses for different reasons. It may be one’s life situation triggering entrepreneurial desires such as corporate down-sizing, an accident that limits one’s physical abilities, or receipt of an inheritance. However, there are various options help entering into business:
- Buying an existing business;
- Buying a franchise;
- Starting a new business.
Buying an existing business
Purchasing an established business can lighten the burden of start-up costs, lag time without a salary, establishing markets, and other costs associated with the creation of a new business. Established businesses may have existing good will – intangible (non-monetary) assets such as reputation or historical value. The decision to buy a business requires careful evaluation of many factors, including pricing and financing your purchase. The potential buyer must understand the criteria for selecting a business as well as the motivation for wanting to purchase the business.
Buying a franchise
Franchising has emerged as a popular way for potential business owners to start a new business. A franchise offers advantages in name and product recognition, proven operation procedures as well as volume purchasing power. In this arrangement, the provider, or franchiser, contracts with the franchisee, to give the right to sell or distribute a service or product under the franchisor’s system in a particular area. As with any opportunity, both advantages and disadvantages must be examined before a decision to invest is made.
Starting a new business
Starting one’s own business involves many decisions, which often seem overwhelming. It has been shown that there is a strong correlation between using outside professionals and business success. In today’s business world it is known that many new businesses fail within the first five years. The chances for success can only increase by seeking the broad experience and expertise that professional resources and advisors can provide. So, they can provide a reality check and give you insight in starting and guiding the business.
Selecting a business location
Location is more important to some businesses than to others. The importance of the location is determined by certain characteristics of the business. Factors that must be considered:
- Do customers travel to the business or do employees travel to the customer?
- Is your business offering a special product with little accessible competition?
- Will your product or service require a specific location?
- Will proximity to vendors and customers play an important role in your location?
- Do traffic flow, parking and other business establishments impact your site selection?
- How much space is required and do you need expansion capability?
- Should you lease or buy a facility and what are the terms of your lease, if leasing?
- How is your rent determined? (Rent = cost of space + advertising)
- What are the insurance requirements?
- Do you understand home-based business expenses and requirements?
These questions represent some of the issues that need to be answered before making a business site selection. Additional questions and information may be required depending on whether your business is a service business, retail store, or manufacturing facility.
Minimising your risks
Risks abound in the business world. An entrepreneur will want to protect interest and minimise your risk from the beginning. The time to address these important issues is during the planning stage. Advice of professionals in accounting, insurance, banking, and law will help to make decisions to minimise risks and to identify best protection options.
With a new concept on mind it is obvious that there are many factors to be considered when starting a business. The true gain indeed depends on the accurate decisions that are made at the correct time and the entrepreneur’s ability to mitigate risk. Whether the entrepreneur chooses to buying an existing business, franchising or starting a new business on own, the challenges to face will be unique to win.