Thinking of business ideas is exciting, especially when it is something you are passionate about. When it comes to starting a business, there is a lot more planning than the idea generation phase. Lack of direction and feasibility will put the likelihood of the venture at risk.
The core principles are starting a business are the same regardless of the size of your venture.
Starting a business isn’t just about a great idea. Nor should you rely on the encouragement of others telling you it’s a great idea. Many people will like good ideas, but when it comes to spending their money on a product or service, the perspective changes.
People buy products and services which meet a need or solves a problem. What they are willing to pay for it depends on how readily available it is elsewhere and the level of value they place on it. Without understanding your customer needs, your business idea will sit on shaky foundations if the product doesn’t meet that need.
Write A Business Plan
Surprisingly many entrepreneurs have an idea in their mind, so a business plan seems pointless. It isn’t until you create a plan of how all the moving parts of your business works together do you get to see where potential pitfalls and blind spots hide. A business plan will help you test your assumptions, such as the number of customers and how much they will spend. But if you don’t achieve this figure, what happens to the rest of the business which needs to be financed? It will help you determine your business viability as well as potential threats and opportunities and its viability.
Understand your industry by conducting market research. As in step one, you must understand the customer, their problems, needs, and desires. How can you bring something that they won’t find elsewhere? It would help if you had the upper hand on your competitors. Don’t be discouraged if you are a small company competing with large brands. Like the boutique hotel concept, small companies can offer a more personalized and customized experience, and by nature, tend to be more responsive to customer needs.
No matter where your money is coming from, make sure that you budget enough to cover your initial costs to ensure a successful launch. Making sure you have enough cash flow to operate for the first few months is critical. Don’t assume crowds of customers will come through your door in the first month; reputation takes time to build. Your financial plan will be part of your business plan; this will help you prioritize finances for critical areas of the business and when you can assign funds to other areas of the company.
Business Practice & Principles
Consistency is essential for customers. They know what they will receive each time they buy your product. If it deviates from the previous purchases, your customers will likely seek alternatives. I have seen this with many restaurants that have not maintained the quality of the menu. It only takes one or two visits, and regular customers can be lost. Set out your policies and practices from the start. Detail exactly how you want our product and service to be delivered to your customer.
Goals & Objectives
What are some of your short-term and long-term objectives? Measurability is essential to business planning because when you aren’t on target with what you expected, it can alert you to a given area of the business which needs improving. For instance, if you are achieving the number of customers you targeted, but they aren’t spending the amount you’d expected, it will point you to where you need to focus.; possibly more cross-selling opportunities, discounts to new products, or other customer incentives.
Keeping track of your targets will ensure all parts of the business are running in synchronicity to the others. If you fail to meet your financial goals, how will other areas of the company be affected? Goals and objectives help you keep track and focus on areas that need your greatest attention.