Top 10 questions you must answer before starting a business.

Establishing a small business often creeps up into the minds of people every now and then. If you’re one of them, envision yourself starting your own business and building it from scratch. Visualize the customers you will have and the wares that you will be selling. While it may sound easy, if you can’t finance it, you’ll find yourself sitting at home twiddling your thumbs. However, there is a way for you to achieve your goals and live out your dreams. You can ask for a grant or loan if you believe that you have an excellent and original idea for a business.

Before you get started on your potential dream business, you must ask yourself the following questions:

1. Is the business you are entering a passion of yours?
2. Will you make a profit from the business you will enter?
3. Do you have a market for the business you are planning to enter?
4. Do you have a target market in mind?
5. Do you know your competition in the niche you are planning to enter?
6. Why do you want to start a business?
7. What makes your business stand out from the rest?
8. Will you make the time, insert the effort, and spend the money for your planned business?
9. How will you sell your products?
10. Who will manage your business?

Once you have asked and answered the above-mentioned questions, you can plan the business you want to start.

Planning Your Business

Once you have an idea of what your business will be, you must plan your course of action. Like a seasoned general, your point of attack must be decisive and well-thought out. You must avoid unknown terrain to keep you from losing truck loads of money that will take you years to recover.

Your plan of action must include your strengths and weaknesses as well as your competitor’s strengths and weaknesses.

You must diagram the strengths you have and threats you will encounter. For example, if you decide to enter the retail industry you must know the prices, supply chain, and customer needs and wants of your competitors. You must figure out their strong points and their weak points. To be able to succeed, you must be two to three steps ahead of your competition. You must also find a need for your customers through careful research and insight. Additionally, you need to enter a market that has a compelling need and plenty of opportunities.

Once you have mapped out your strengths and opportunities, it is now time for you to formulate a strategy for your own business. You can use a variety of methods that have been used before to help grow your business. Sun Tzu once said that “though there are a few colors, there combinations are infinite.”

But you must make sure that you have planned your course of action based on he four Ps:

  1. Product
  2. Place
  3. Price
  4. Positioning

Following the four Ps will help you delineate the path you should take when you start your own business.

Product – Determines the technical aspect of your business. What kind of product will you be selling? What kind of service will you give? What are the benefits of the product or service you will give?

Place – This is where you will be able to reach your customers. What are their key touch points? What are the appropriate places to reach your customers to make them buy your product or service? What is the best location to place your product or service in? Is it appropriate to place your store near a school or near a subdivision? These are pertinent questions you must ask yourself before choosing a location for your business.

Price – This is the amount of money that your customers will need to purchase your product or service.

Positioning – This is the differentiation you have against competitors. This is important because positioning is the perception of your customers about your product or service.

The combination of the four Ps will help you approach your business with a deep understanding of yourself and your competition. The four Ps must intertwine with each other to make your business effective and stand out from the competition.

You must clearly have an individualized niche and perception that will make you stand out from the glut of businesses in the industry you intend to enter. Creating this niche will take time and effort so you must offer high-quality service and products to maintain a long lasting relationship with your customers.

Where can you get the money for your business?

There are three ways you can get started on your business. You can finance your business by getting a loan, a grant, or by being financed by venture capitalists.

Loan

A loan in its simplest definition is borrowed money from whatever source. The most common loaner is a bank. The interest rates vary depending on the bank you borrow money from. Before you borrow money from a bank, make sure that you have enough funding to pay for your debt. If you have too much debt with little cash flow, you might end up defaulting and losing your business.

Grant

A grant is funding given by the government to a business, idea, or innovation by an individual, group, or business. It is state funding which requires high standards of quality control and compliance to rules and regulations.

Venture Capital

A venture capital is financing provided by financiers to businesses that lack the funds, size, or assets to help their business grow. Entrepreneurs who seek the help of venture capitalists lack the means to borrow money from traditional sources like banks. Venture capital funding are ideal for start-ups and entrepreneurs who have novel ideas that create new market segments.

These are just some of the ways to finance your business. Now before you embark on a business venture, it is best to make an assessment of the market you wish to enter and if you have the means to keep it running for a long time. Always plan ahead and think of the coming years in advance.

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