Are you thinking of starting a small business? Below are top 10 factors you should consider when starting a business. These factors can either make or mar your small business?
If you are actually ready to start a small business then read on to see if you can handle all these factors.
Starting a small business can be tough though it can as well be fun especially when you are succeeding. Why businesses failed is because the owners fail to understand the underlying business success factors.
These top 10 important factors to consider when starting a business are;
• Your knowledge of the business
• Your passion for the business
• The target market
• The business locations
• The economy
• Your capital
• The Timing and time management
• Backup financial plan
• Profit in the business
Neglecting to consider any of these factors when starting a small business may result to your business failure because each of these factors has its own implications
1. Your knowledge of the business
I have always warned many people against the dangers of starting of a business they do not have any knowledge on. You need to have experience in anything you set out to do especially when it involves business and making money. Knowledge is power! You can always do better in any business you have an experience on. So, before starting that your dream small business considers getting experience and knowledge first.
Many businesses failed today because of lack of knowledge. What you don’t know, you don’t know. Period! You can never give what you don’t have. You can work for someone who is in your the same line of business for at least a year to acquire experience.
2. Your passion about the business
Passion is another important factor to consider when starting a small business. “Passion is what keeps you going when the going gets tough”- Warren Buffett. Doing business is a risk and sometimes, things don’t turn out the way we may have plan, passion will help in keeping you going.
One of the major reasons why people jump from one business opportunity to another is because at the onset they started a business they are not passionate about. Before starting any business considers starting something you are passionate about.
3. Your target Market or customers
Another factor to consider when starting a small business is the target market. How many people will patronize this business you are starting? No matter how good a business may seen to be; if you don’t have people who buy your product you are wasting your time. People can applaud your idea, but money in the hand is always better. Therefore, consider your target market before starting any small business.
4. The business location
The success of many businesses lies in the ability to choose the right business location. To choose the right location for your small business is a matter of determining what is absolutely important to the success of the business awhile overlooking those that are not too important.
Some of the key factors to consider when choosing business location are;
• The traffic around the location especially if your business will involve selling of a product
• nearness to market
• nearness to raw material if it involves production
• availability of labour
• your competitors
• security of the location
• is it an area zone business
• your key distributors
In addition to the above factors, here are 15 Tips on finding right location for small business
5. The Economy
Many people go into small businesses they have the knowledge of, know their target market, choose the right location and still fail. The economy can have an adverse effect on any business no matter how small the business is. But it is always good to consider starting in a small scale when you discover that the economy may affect the business tremendously.
6. Your capital
While you may hear stories of people who started a business with little or no money, you will still hear of others who spend thousands of dollars to begin theirs. So, knowing the amount of capital you needed to start your own small business matters. Get the required capital ready before kicking off. Make sure you have ways to raise to funds for small the business if the required capital is not complete.
7. Backup financial plan
Every business require backup financial plan. When you newly launch a business, they business may take some time to start paying you. At that point, you need to put in more than you get. Financial backup helps you maintain and run the business until the business starts paying off in spades.
8. The Timing and time management
Time is value business asset and it plays some key roles in the success of a business. The time the business is launched and the time allocated to running of the business matters. I hear many new business owners say they didn’t think the business would take as much time as it has in their lives. Some businesses may require more time than the other. Time is crucial to businesses that are seasonal. For business that may involve buying and selling, time is usually needed to handle customers and “public” business operations. Time is also needed in maintenance, taxes and other items that come with running a business.
Competition is another factor to consider when starting a small business. You can imagine how many small businesses sweat over finding a location where there is no competition so as to enjoy some ‘absolute monopoly’ advantage. However, it does not always work fine that way. Sometime you need to be close to your competitors, so that you can sell to both your customers and to that of your competitors. A well-established competitive business indicates that plenty of target customers will go round. So, being close to your competitors is always an added advantage if you can utilize the advantage.
10. Profit in the business
These factors to consider when starting a small business will not be complete if I fail to say mention profit. One of the major goals of every business is to maximize profit. After mapping out your overhead expense and actually cost of a producing a product, you should comfortably have profit. So, consider taking a rough estimate of your profit before starting any business. Your profit will help to cover some potential serious problem should they arise unexpectedly.
Doing business can be fun and exciting especially when all necessary factors militating against business success are take into consideration.