How to Start a Successful Business?

This blog is aimed to assist yourself evaluate how your business will be successful or define concerns and problems that you will face as you turn your idea into practice and prepare to start your business. Knowledge includes all the basics that you need to consider before beginning your business.

The following four conventions will depend on the operation of your business.

1. with a strong base, a realistic strategy

2. Dedication and ability to sacrifice, to achieve the objective.

3. Professional ability

4. Basic understanding of record-keeping and business analysis of management finance.

You’ll need to learn these capabilities and strategies as a new owner. If your company is to be successful, identify your reasons.

As a first and often ignored move, ask yourself why you want to analyze the reasons that matter to you for owning your own company.

1. Independence from the regular nine-to-five job schedule

2. Being a boss of your own

3. When you want to do it, do what you want.

4. Improving the living conditions

5. Boredom with your previous work,

6. Getting a product or service that you know there is a need for.

Some explanations are better than others, none of which are incorrect, but be mindful that trade-offs exist.

Significant errors in the preliminary analysis

A ‘Yes’ response to questions such as the following would imply that your business idea has little chance of success.

1. Are there any triggers (such as shortages or restrictions on monopolies that make any of the necessary operational factors inaccessible (such as excessive costs or scarce skills)?

2. Are entry or continuing operations capital requirements excessive?

3. Is sufficient funding difficult to obtain?

4. Are there considerations that prevent effective marketing?

A self-analysis of itself

Starting up a business requires some personal characteristics. This part of the blog section deals with you, the individual. Though brief, this next group of questions is crucial to the success of your strategy. It covers the emotional and financial physical pressures that you will face in starting a business.

• You are aware that running your own business can require six days a week, and maybe even Sundays and holidays, to work 12 to 16 hours a day.
• Do you have the physical stamina to manage the schedule and workload?
• Will you have the psychological power to stand the strain?
• If required, are you prepared to temporarily reduce your standard of living until your business is firmly established?
• Is your family able to go along with the strains they have to bear, too?
• Are you prepared (in case your scheme fails) to lose your savings?

Niche observation

Small companies with many staff and millions of dollars in equipment vary in scale from a manufacturer. The expertise and skills required for these two extremes, obviously, are far apart. But for success, everyone has found a business niche and is filling it with one thing in common, the most important issues you will face in your early planning, finding your niche, and evaluating your idea’s viability.

• “Get into the right business at the right time”, is very good advice but following that advice may be difficult. Many entrepreneurs plunge into a business venture so blinded by the dream that they fail to thoroughly evaluate its potential.
• Is your business idea feasible?
• Before you invest time, effort and money the following exercise will help you separate sound ideas from those bearing a high potential for failure.
• Identify and briefly describe the business you plan to start.
• Identify the product or service you plan to sell

Answering yes to any of the following three questions means you are on the right track. A negative answer to all of them means the road ahead could be rough.

1. Does your product or service satisfy an unfilled need?

2. Will your product or service serve an existing market in which demand exceeds supply?

3. Will your product or service be competitive based on its quality, selection, price or location?

Market analysis

• For a small business to be successful the owner must know the market. To learn the market. You must analyze it, a process that takes time and effort.
• You don’t have to be a trained statistician to analyze the marketplace nor does the analysis have to be costly. Analyzing the market as a way to gather facts about potential customers and to determine the demand for your product or service.
• The more information you gather the greater your chances of capturing a segment of the market before investing your time and money in any business venture.

The following questions will help you collect the information necessary to analyze your market and determine if your product or service will sell.

This brief exercise will give you a good idea of the kind of market planning you need to do an answer of “no”, to any of the questions, indicates a weakness in your plan so do your research until you can answer each question with that ‘yes’.

1. Do you know who your customers will be?

2. Do you understand their needs and desires?

3. Do you know where they live?

4. Will you be offering the kind of products or services that they will buy?

5. Will your prices be competitive in quality and value?

6. Will your promotional program be effective?

7. Do you understand how your business compares with your competitors?

8. Will your business be conveniently located for the people you plan to serve?

9. Will there be adequate parking facilities for the people you plan to serve?

Planning your startup?

So far this Blog has helped you identify questions, and problems you will face Converting your idea into reality and determining if your idea is feasible. Through self-analysis you have learned of your personal qualifications and deficiencies and through market analysis you have learned if there is a demand for your product or service.

The following questions are grouped according to function they are designed to help you prepare for “opening day”.

Read Also: Plastic Waste Recycling Business

Name and legal structure

1. Have you chosen a name for your business?

2. Have you chosen to operate as a sole proprietorship partnership or corporation?

Business premises and location

1. Have you found a suitable building in a location convenient for your customers?

2. Can the building be modified for your needs at a reasonable cost?

3. Will you have a lawyer, Check the zoning regulations and lease

Merchandise

1. Have you decided what items you will sell or produce or what services you will provide?

2. Have you made a merchandise plan, based upon estimated sales to determine the amount of inventory you will need, to control purchases?

3. Have you found reliable suppliers who will assist you in the startup?

4. Have you compared the prices quality and credit terms of suppliers

Business records

1. Are you prepared to maintain complete records of sales income and expenses accounts payable and receivables?
2. Have you determined how to handle payroll records tax reports and payments
3. Do you know what financial report should be prepared and how to prepare them?

Finances

A large number of small businesses fail each year there are a number of reasons for these failures but one of the main reasons is insufficient funds. Too many entrepreneurs try to start and operate a business without sufficient capital, (money). To avoid this dilemma you can review your situation by analyzing the following three questions.

1. How much money do you have
2. How much money will you need to start your business?
3. How much money will you need to stay in business?

In order to answer the second question how much money will you need to start your business you need to prepare an estimate of all your startup costs.

Here is a list of items you may need to take into account note that this list is for a retail business. Items will vary for service construction manufacturing or online firms.

• Decorating and remodeling fixtures and equipment,
• Installing fixtures and equipment Services and supplies, beginning Inventory cost, legal professional fees, licenses and permits, telephone utility deposits, insurance, signs, advertising for opening unanticipated expenses.

Now the answer to the third question: how much money will you need to stay in business must be divided into two parts: immediate costs and future costs from the moment the door to your new business opens, a certain amount of income may come in.

However, this income should not be projected in your operating expenses. You will need enough money available, to cover costs for at least the first three months of operation.

The following list will help you project your operating expenses, on a monthly basis.

• Typical expenses for one month may include: Your living costs, Employee wages, rent, advertising, supplies, utilities, insurance, taxes maintenance, delivery, transportation, miscellaneous.
• Now sum up the total estimated monthly expenses and multiply it by 3 this is amount of cash you will need to cover operating expenses for 3 months
• Deposit this amount in a savings account before opening your business; use it only for those purposes listed in the above list, because this money will ensure that you will be able to continue in business during the crucial early stages.
• By adding the total startup costs to the total expenses for 3 months, you can learn what the estimated costs will be to start and operate your business for 3 months. By subtracting the totals of the lists, from the cash available, you can determine the amount of additional financing you may need, if any.
• Now you will need to estimate your operating expenses for the first year after

Startup

• The first step in determining your annual expenses, is to estimate your sales volume, month by month.
• Next, determine the cost of sales you may want to use a spreadsheet to do this.

After Startup

• The primary source of revenue in your business will be from sales, but your sales will vary from month to month, because of seasonal patterns, and other factors.
• It is important to determine if your monthly sales will produce enough income to pay each month’s bills.
• An estimated cash flow projection will show if the monthly cash balance is going to be subject to such factors as the following failure to recognize seasonal trends.
• Excessive cash taken from the business for living expenses.
• Too rapid expansion. And slow collection of accounts, if credit is extended to customers.