A lot of new businesses shut soon after they have started. Lack of organizational skills is one of the causes. However, the problems stem from a lack of proactivity on the side of the entrepreneur. No business will start without hiccups. How to overcome them is a skill that you can master through research. There’s a huge learning curve when it comes to starting a business. If you’ve successfully gotten one business off the ground, you may be looking to expand or to start another business.
Challenge Your Idea
A bright idea does not guarantee success. In fact, most glittering ideas turn out to be sham upon scrutiny. Before you invest your first dollar, ask yourself why the business will fail. A checklist is a good starting point where you can list down all the potential pitfalls of the idea. Basic market research is necessary at this stage. Work out a solution for every hazard that comes your way. If you cannot provide a solution for each, know that you are diving into a ditch. So, duck carefully. Spend some time and resources to understand the market, the product, competition, customer profiles, general business information, and specific entrepreneurial processes.
Even if you’re just expanding your business’s products or services, or opening a new location, market research and challenging your ideas is essential. A new product that fails can undo all the hard work you’ve put in so far. A second location in an area where your target demographic doesn’t spend time will have new challenges.
Know How to Survive
If you are starting a business, brace yourself for some time without money. How will you survive without an income? Some ideas cannot be pursued part-time. You will need to commit yourself full time. You can work part-time to supplement your income. However, how will you manage fatigue? Some people have managed to grow their idea over time while they continue with their jobs. It can ease the burden of a cash crunch. It can also help you foolproof the idea. It will take time before you can receive a salary off your startup. Work out your bills; even if it means you hitch at a friend’s place or your parent’s garage. However, you still need to know where transport, food, and clothes will come from.
Once you’ve become profitable, this is less of an issue. You shouldn’t even think about expanding before you can survive off your profits. Starting a business is all about sustainable growth.
Make a Business Plan
Don’t mistake this with the proof of concept. A business plan specifies how you will handle every bill, every stage of business development, and every resource required to succeed. A business plan should show what you will produce, how you will produce it, how you will market it, and how you will handle growth. It will show you whether to improve an existing location or open a new location. A good plan should be enough proof that your idea is not phantom. Investors will want to see how realistic you are with your goals.
Pursue Your Sources of Funding Systematically
Investors see greed when you want all the money for the whole business. In the beginning, you can ask family and friends to fund your prototype. You can also use your savings. Once you have a model, you can have a round of investors for the production of the first batch of products. Remember, this batch should help you develop a feedback relationship with your customer base. They will give you insights on what to improve. You should request funding for every milestone.
If you’re already running a successful small business, you have a proven track record of profitability and financial responsibility. Because of this, you won’t have to rely fully on personal funds when you want to expand. You’ve proven yourself already, so finding an unsecured small business loan is one way to fund your expansion.
Each step in this article is about information. A good plan will require an in-depth understanding of business strategy. The same case applies when you are proofing your idea or pursuing a funding source. At every stage of business, research is imperative.