It helps to keep these six considerations in mind when starting a new business.
1. Market evaluation.
Do your homework on the market needs and how these needs are satisfied today. Who are the main players? What are the products and services available? What are the current prices? If you are launching a new product or service, do some market research to evaluate the size of the market and the likelihood of success. In other words, make sure you know all you can about the future customers of your business.
2. Business plan.
Make sure that you have a business plan that spells out your strategy and how you are going to execute it. Your business plan should include an executive summary, market assessment, description of product/service details, sales and marketing details, competitive analysis, operations/manufacturing details, corporate organization and human resources, finances, capital and projections, summary of risks, investments and relevant sources of information and research. Your business plan should be complete and clear. It does not necessarily have to be long, but it must be comprehensive and address all the important angles of your business.
3. Your team.
Surround yourself with the right people by selecting team members. The team will include partners, employees, independents, advisors, etc. Results are achieved through “people”. How good the team and how the team is led and managed are key to the success of your new business.
4. Capital resources.
Make sure you have adequate financing for the business. Whether the source of capital is your money or borrowed (usually it is a combination), you need to adequately capitalize the new venture.
5. The basics.
Do not overlook the basics such as the legal form of your business (proprietorship, partnership or corporation), shareholder agreement, patents and copyrights, business registrations, protection of your business name, local regulations, etc. as appropriate. I also include selecting a lawyer, an accountant and a business consultant to counsel you as you start your business.
6. Personal issues and self-assessment.
This last point is seldom mentioned by the experts, but is very important in my opinion. Do you have what it takes to run your own business? There will be difficult times as you embark on your new venture. No security of a pay cheque and ups and downs in the cash flow. It is also “lonely” at the top if you start a small business. While these are “personal” issues, they are extremely important. Better to answer these questions in advance. BDC’s website has a Start up guide that provides an overview of the start-up process from A to Z including links to online tools and sites that you may find useful. Another good source is to ask two or three self-employed business people who can share their own experience with you.)