The “Before You Start Your Business” Guide for First-time Entrepreneurs

Awed by the success of countless small business owners, scared by the layoffs hitting corporate employees like lightning bolts, and of course, concerned by the mid-life career crisis at 40-45 where every employee working at a private company is at risk of being replaced by someone younger who is ready to work for a cheaper wage. Then there is the scare of AI coming for your job, to add to this list of “Why you should start your own Business.”

The charm of successful examples and the fear of the lay-off clock ticking down have driven many people to consider starting their own businesses. But before you commit to that path with unrealistic expectations, here is something to consider.

Picking Your Business

What do you plan to do? Why? How?
Do you have these answers? Whatever your answer, read on.

What do you bring to the Table?

Don’t say money, if you did, you can never be a business owner, the most you can be is an investor, but unfortunately for that, you will need huge sums of money, and if you did have huge sums of money, you wouldn’t be here.

So what else is this question about? Your Talent, your skill, or any other special abilities that you possess that can help your business.

A small business owner needs to tick this box, or it will get really hard going forward because your investment is not huge, so you can’t hire people for everything, you will need to put in some work too.

If you are thinking of starting a food-related business, you should be able to cook under pressure, both figuratively and literally. If not you will have to hire a cook and do the serving and cashier work. All of this is subject to change based on the amount you invest.

You can pick your niche based on your skill. If you are particularly good at handiwork, you could make and sell them, and then slowly scale up with the manpower or equipment you need.

Standing the test of time

Will the business you are planning to start survive a few years down the road? Think of all the scenarios, If you are planning on manufacturing and selling something that is currently trending, there are high chances that it might only last a year or two. What then? Can your equipment be repurposed, can you switch to some other stream rapidly and keep making profits?

You have to remember that the market will change too. Only those who adapt survive, the rest will be wiped off like dust specks on a window. Food-related businesses are evergreen, as long as there are humans, there is hunger, and hunger leads them to you. Hunger won’t change but, people’s preferences and diets will. If the majority switch to the keto diet will your snack shop survive?

That might be unlikely, but sudden and unexpected events might happen. Take the COVID outbreak for example, many restaurants had to shut down after that period. Don’t take things for granted, especially when you are operating a business.

Competition

Prepare for your competition before you even start your venture. Get as much information on them as possible, this and your USP will be the only things keeping you afloat in the market.

If location is important for your business then pick a spot where your competitor will not dwarf you, well that would be the usual advice, but there’s another factor to consider. If your competitor’s store is always crowded or has high wait times, that gives you the perfect opportunity to capitalize on their impatient customers. But keep in mind that this will only work if your competitor has a constant influx of customers. Considering all of these factors you can position your business nearer or further away from your competitors.

Sometimes there is merit in walking in the footsteps of your competitors, while at other times it is best if you don’t. There are a few important factors like market saturation and quick adaptability. If all of your competitors are offering the same kind of service or product, and if you find a new customer interest that they haven’t tapped into yet, you can target that particular thing and establish yourself in the market. You will also need to consider why other competitors haven’t caught on to it yet, is it very new or is it not worth pursuing?

With proper research and analysis, your competitors will give you very deep insights into the market. They are an example for you to learn from.

Investment

How much are you willing to invest? Make a thorough financial plan, and make estimations for the whole thing, don’t miss out on any small expenses. Don’t invest everything you have no matter how good the odds may seem to you. You will need something to fall back on if things don’t go as expected.

It is important not to go overboard, start small with what you have and then scale it with the profits. If you are confident in the plan and willing to take a loan for it, then go back and re-check everything again. Don’t borrow an absurd amount of money that you won’t be able to repay.

If you have other people willing to invest in your venture, make contracts no matter how close of a friend they are to you.

Business Type

Are you planning on offering a service or selling a product? Based on this, your marketing strategy will change. Both have their own set of perks and pain points, research about them before finalizing your business. If you are selling products then you will need a place to store them securely, and there’s still the question of how you will sell them, online or offline. If you are offering a service, you will need to show samples or your portfolio, depending on what kind of service it is, you may need to invest in tools too.

Partners and Manpower

If you are not starting this solo, you will have one or more business partners. If you know them well you should know their strengths and weaknesses, it would be perfect if they complement yours. All of you being able to do diverse things will open up the scope of your business. But the most significant factor is trust, if you can’t trust your partner, then don’t bother teaming up with them.

I talked about contracts in the Investment section previously. No matter how close you are, and how much ever you trust you have in your partners, draw up a contract and sign it. This way in the future if things go south, this will be your insurance.

Depending on the size of your business, you will either be running it solo or have to hire additional help. If you will be needing additional help, make sure to properly assess them, they can cost you both your reputation and business if they mess up. Get capable individuals, treat them well, and give them no reason to want to hurt your business.

Location

Again, based on the type of business, the location, and the factors that will go into choosing a location will vary. If your business doesn’t involve the customers coming to the store, you can save expenses by picking a place where the rents aren’t high. If it is the opposite, you will need to research where you will find most of your target customers. No matter how good your business is, if your customers cannot find your store, it is doomed to fail.

If you need a store for your business, consider spending on essentials first, decor can come later. If you can pull in customers with the bare minimum, keep it that way, and slowly upgrade your store instead of rushing. When you are starting out you can’t have everything, it will help to keep this in mind.

Backup Plan

Plan for what you will do in case you suffer a loss. Keep advance payment funds for at least a year for both the employees and the rent. You can be a hundred percent sure of your business not failing, optimism is not bad, but being pragmatic hasn’t ever hurt anyone. Hope for the best, but don’t forget to prepare for the worst.

If you have trust in your business, you can brute force and survive through losses that’s only if you have funds saved up. If not, you will go into debt or out of business, both choices leading to a sad and bitter end.

Have a backup plan handy…, for everything. If anything goes awry your backup plan will be the only thing that will save you, you might not be able to count on anything or anyone else.

Marketing

Depending on your business type, prepare suitable marketing plans and set budgets to put them into action. With that in consideration, offline, online, or a combination of both mediums will have to be targeted. While online medium has a higher ROI, it might not work very well for offline stores, unless you spend money on promotions through Vloggers and other social media channels. Online marketing will bring you few customers, but every single one will be interested in your niche, provided you have set your target audience perfectly while running ads.

Hopeful this helps you with something, and oh! Don’t forget to research all the legal obligations that you will have to fulfill when starting your own business. Good luck!