Being able to work from home, command employees while in your pajamas, and make ridiculous amounts of money every month without having to pull 40-hour work weeks are what most people think about when they decide to start a business.
5 things every entrepreneur should know before starting a business
While these are definitely some perks to business ownership, most novices are greeted by a totally different picture – scrambling to get capital from banks and angel investors, pulling out hairs while trying to figure out what’s wrong with a business model, and dealing with the incompetence of employees and suppliers.
If you’re starting a business soon, here’s five things you should know right off the bat:
You’ll need a product idea
Brainstorm ideas with family or friends or find someplace quiet and jot down all the ideas that come to mind.
You’ll need a product idea before you start applying for financing and outside investment.
And not just a product idea, but a validated one. You don’t want to just create a spinoff of an already existing product or service.
That being said, you don’t have to reinvent the wheel. Look at existing products in a market category that you’re interested in and try to look for ways to expand their applications and features.
Nowadays, you don’t really need a new idea; you just need a better version of one.
You can also build a business as a distributor for direct selling companies, like Nu Skin.
This has the advantages of low to no overhead and not having to start from scratch since these companies provide you with the equipment and products you’ll need.
You’ll need money
Starting a small business doesn’t necessarily require a ton of cash, but you do need to invest an initial amount to get the ball rolling.
The initial investment covers the legal expenses including business permits, licenses, and insurance coverage.
If you’re offering a product that you created, you may also need to patent or trademark it, which will cost a few hundred dollars in legal fees.
You’ll need people
People are the lifeblood of every business.
The adage “no man is an island” is never truer than when applied to business.
Of course, you don’t have to hire 10 people right at the gate. Start by hiring one or two technical people who can help you with key operations including product design and development, market research, and branding.
Outsourcing is a good way to try out people without having to commit your limited resources to a full-time salary and benefits package.
You’ll need some brand presence
Whether it’s online or storefront or a little bit of both, you’ll need to put yourself out there.
You can’t expect to attract customers without any form of marketing set up.
Social media sites, like Facebook and Instagram, are good platforms to start branding yourself since they are free and already have billions of users that you can market to.
When marketing, hire a consultant or a full-time employee to spearhead your business’ marketing campaigns.
While it sounds simple, effective marketing takes more than just posting stuff up on billboards and paid-per-click online campaigns. It requires the right format, components, and delivery.
You’ll need a base
Where you set up shop will matter, especially if you’re a retail business.
The location you choose should be accessible to foot traffic as well as public transportation options, such as bus and train.
The more visible your location is, however, the costlier the lease contracts get.
Try to strike a balance between cost and visibility. If you are starting a business that mainly operates online, you can hold off on a headquarters until you scale and hire more employees.
Now that you know these five things, work on getting each of them in order before starting your business.
Preparation is half the battle when it comes to successfully running a business.
With all the pieces in place and a solid foundation laid out, it’ll be easier for the entrepreneur in you to tackle day-to-day operations.