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Thinking of starting your own business? The prospect of being an entrepreneur is an appealing and exciting one to many people. As any seasoned business owner will tell you, there’s a lot that goes into starting and running a successful business. But prior to taking the plunge, it’s important to do a few things first.
Here are 5 things all aspiring entrepreneurs should do before starting a business.
Consult With A Lawyer and An Accountant
There are tons of legalities and issues to think about when starting a business that may not even been on your radar. You have to register your business and be aware of the specific permit and license requirements and tax liabilities which differ from state to state. And each business entity type has distinct rules to follow. In order to cover all of your bases, it’s best to consult with professionals who know the ins and outs of starting a new business. They’ll be able to advise you on what makes the most sense for your specific business and the future goals you have in mind.
Conduct Market Research
According to a recent study, the #1 reason most startups fail is because there is no market need for the business. In order to avoid being a statistic, research the market prior to embarking on a new business venture. Ask yourself if there is a need or demand for your product or service. Who would your competitors be? What are they doing well and what are they doing not-so-well? Do you have an idea of who your ideal client would be? Is there a way that your business could provide a better service or product than your competitor? What about a new trend that you can capitalize one? Doing market research will not only help you determine if there’s a share of the market for you, but it will also help you discover what your unique business angle could be.
Evaluate Your Startup Costs
Before launching a business spend some time evaluating just how much money you estimate your startup costs will be. Do you need to invest in equipment or software? What about a rental space or office furniture? Depending on what you determine the costs will be, you may need to secure financing. It’s a good idea to estimate high because as most seasoned entrepreneurs will tell you, there are always unexpected costs that arise when starting and running a business.
Think About Pricing and Profitability
Have you thought about how much money you need to earn in order to make a profit? What does that amount translate to in the number of sales or clients you need to maintain? How much revenue do you need to generate in order to cover all of your expenses? These are all important questions to ask yourself when considering your pricing. When thinking about setting prices, remember to take all of your costs such as labor, overhead, shipping, and materials into consideration.
Don’t Quit Your Day Job….Yet
During the early stages of your business, you’ll likely struggle to make a profit. So, although it may be very tempting to quit your 9-5 now, chances are that isn’t a good idea. Keeping your day job while you’re starting to scale your business is critical in order to maintain a steady income stream. And although it will undoubtedly be hard work to build your business during your off hours, at least you’ll still be able to pay your bills. Once you’ve begun generating enough income, you can begin the transition to dedicating yourself full-time to your new business venture.
Keep in mind that all businesses are different and there’s not a one-size-fits-all formula for success when launching a new company. But one thing that’s extremely crucial is being as prepared as possible. Do your research, recognize that success won’t come overnight, and take enough time to figure out if you have a viable business idea. For additional resources for small business owners, click here.
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