After a tumultuous year, significant changes have been made in day-to-day life, including how individuals earn a living. For example, many people have made career pivots while others have considered starting a business. How about you? If you’re embarking on a new venture by starting your own business, there are a few questions to ask yourself ahead of time. While entering this new chapter is inevitably an exciting yet nerve-wracking time, you will want to ensure that you are prepared for this new responsibility.
What are my motivations?
Before making any major lifestyle change, it’s always important to take into consideration your main motivations for taking this plunge. When looking into starting your own business, determine some of the main reasons behind this initiative to better help you to plan. Understanding the “why” behind starting a business can give you a clearer picture of how you define success. While it may seem obvious, self-reflection can help you determine your goals and objectives as a prospective entrepreneur or business owner.
Who are my competitors?
When coming up with a business plan, looking into potential direct and indirect competitors within the industry can help you strategize and ultimately grow. Direct competitors are companies that are providing the same service or offering the same product, whereas indirect competitors might not be selling the same product, but they still compete for your customer base. Looking up your competition on Google or going through their social media channels can give you a better idea of what they are doing that is successful and help you find ways to differentiate yourself. Even if your business isn’t selling a proprietary product or solution, it’s important to find ways to set yourself apart from what your competitors might be doing.
Am I financially prepared?
Determining how you’ll fund your business is one of the most critical decisions you can make in this new venture. For example, will this business be self-funded, or will you take out a loan? Are you considering crowd-funding, or will investors be funding some or all of your business? Having a clear picture of both your personal and potential business finances can determine what your business plan might look like.
While you might be looking at the bigger picture of what you would like your business to grow into, remember to get to that point, there are smaller steps to take first. Sometimes this involves pulling back and taking baby steps first rather than diving in headfirst. For example, if you eventually would like to have a brick-and-mortar store to sell your product from, but you’re self-funding your venture, you might want to start selling online first to test the waters.
Do I have adequate safeguards set in place?
If you’re in the position where you might be leaving your current job to start this business, it’s important to ensure that you have safeguards set in place both to protect your business and your personal finances. While there are a significant number of advantages to being your own boss, there are still some benefits associated with working as an employee. For example, when you work for a company, you most likely have the option to enroll in some kind of health insurance coverage. When you own your own business, you’re now responsible for securing these benefits yourself, especially if you aren’t able to be on a partner’s health insurance policy.
Furthermore, many companies will offer life insurance benefits to their employees, and more often than not, these policies aren’t transferable after leaving the organization. If you’re in this position, and especially if you have parents, children or partners who rely upon your financial support, it can be helpful to find private life insurance coverage to protect those who depend on you. As a business owner, this is especially important if you used any family assets to financially secure your business. It’s important to account for these additional costs in your business plan because having the right safeguards set in place provides you with peace of mind knowing that you can protect yourself and your business from unexpected events.
Who is my “perfect” customer?
When drawing up a business plan, one thing to keep in mind is who your perfect customer is. Determining who you’re selling to is a key component in establishing a marketing plan. Having the right marketing plan can sometimes make or break a business, so investing time into researching and evaluating your ideal customer profile can help you grow—as well as conserve valuable resources. Learning more about your customers and what they value can serve to help you make meaningful connections. Furthermore, finding ways to be more interactive and engaging with your base will promote customer loyalty and retention. Promoting your business can be a challenge, but remember that marketing doesn’t have to be static. If you find that something isn’t working, look into improving your business marketing to build upon your strategy.
How can I grow or scale?
After you’ve come up with a business plan, it’s important to look into the ways that you can grow or scale your business once you’re established. Growing a business means that you’re increasing your resources, resulting in an increase in revenue. Scaling, however, focuses on increasing your business’ revenue but does so without expending a significant amount of resources. Determining which avenue is best for your particular situation may take time and research, but understanding how you define success can help you prioritize and hone in on which areas of your business are best to focus on. By setting both short- and long-term goals, you can create a timeline based on your initiatives and how you want to grow or scale your business.
Before embarking on any new venture, it’s always a good idea to ask yourself important questions ahead of time, to ensure that you’re making the best decisions. While you can’t always predict what the future holds, having a solid foundation to build upon as a prospective small business owner can help support you in this new endeavor.
That’s it for this week. Please keep sending me your topic ideas—I’m always grateful for new suggestions. See you on April 21st, and Happy Spring!