What You Need to do Before Starting Your Business
[This article was written by Walter Bodell.]
There are over 100 million startup companies that get put into the market every single year. The sad part is that 40% of those fail within the first year. That means that 40,000,000 business drop out within their first 12 months of being around. What’s worse is that in the first five years, 50% of the businesses fail. And in the first 10 years, 60% of the businesses crash and burn. So, the question is, what went wrong? Why do they fail? And what can you do to make sure that your business doesn’t join those statistics?
- Think of a Brilliant Idea
The idea that you stuck upon is probably a good idea. It is at least a creative idea. The problem is that it might not be brilliant. You need to make sure that your idea is actually something that a person would buy. To make sure, go through a few questions and answer them in your head. First, why do you want to make this idea happen? Second, is it something that your mom and dad would buy if you weren’t the creator? And third, can you see this product lasting on the market long term? If you answered “I don’t know,” “No,” and “No” then you really need to rethink your plan. You should have a product that applies to a wide variety of people and has the potential to last. You want an idea that would grow so quickly that it would need its very own data network monitoring solution. If you don’t think that it will grow, or you don’t think you’ll still be excited about it in a few years, then you might want to keep thinking.
- Go Over the Finances on Paper
A lot of reasons why a business will fail within the first five years is because they didn’t think realistically about the finances before they started the company up. It takes a fair amount of money to make a startup. You have to have the resources to provide insurance, to pay employees, to buy the source material, and the list goes on and on. You need to decide how you’re going to pay for the startup. You have a lot of options when it comes to finances. You can take out a personal loan to start the company, or you can put it all on credit. You can go in with a partner and split the costs 50/50, or you can finance the entire thing out of pocket. If you’re not keen on getting a loan or having a partner, then you’ll need to save up until you a have a comfortable amount to get started. If that’s the case, then you might want to consider waiting a few years before you start the business.
- Have a Plan for the Future
If your plan was to have no plan, then you were probably headed towards becoming a part of the percentage of failed companies. You need to make sure that you have a good idea of where you’re planning on going with your business. First, sit down and make a plan of what your idea is. Then, create a market sheet and figure out which age group and demographic area your product is going to be solicited towards. That is important because you need to understand your target group and know into whose hands your product will be going in to. By making a plan for the future, you prepare for all different scenarios. When a tragedy strikes in your company, you will have already planned and prepared for it. Make sure that you include everything in your plan. Ask the people who you care about what they think you should include. Ask where they think you will be in 10 years and then prepare for that scenario.
As a soon-to-be business owner, you should be excited about getting started. You need to also make sure that you are prepared and that this is the right time for you to start your business. If you feel ready, then good luck!