Starting a business is a highly stressful activity that no formal training can prepare an entrepreneur for. However, with a little planning, you can manage these multiple expectations and take smarter actions toward building your business.
While not all businesses are the same, the foundation principles apply to similar instances occurring in most business processes. Here are some of the things an entrepreneur must know before starting a new business.
The most successful businesses in the world started from the same point, an idea. An idea is the seed of the business which you have to nurture to ensure success.
Before you can start on all the things, you need to know before starting a business, having an idea is paramount. You will have to answer key questions like what makes your business different and what demand gap you are filling.
A business plan provides a detailed overview of your proposed venture, your level of industry knowledge and grasp of the opportunity, the necessary funding, and the prospective benefits.
Apart from acting as proof of genuine commitment, it is also the first thing asked by investors.
Once your business plan is created, you must register your company, secure the necessary licenses, and create a permanent account number (PAN).
With a PAN, you can file business taxes separately from your personal taxes, secure your identity, and build credit for your company.
According to a study by US Bank, over 82% of businesses fail due to a lack of or poor cash flow management. Therefore, cash flow is of utmost importance to a new business.
The key to effective cash flow management is to keep track of all business expenses, check the spending threshold and forecast cash flow for the future.
Competition & Marketplace
Competition helps business owners constantly innovate and evolve their products and services. Knowing your company’s market, what your competitors are doing, and how your company fits into this environment is critical in starting a business.
Without this knowledge, no investor will rise to help the venture, and it will be hard to stand out in the marketplace.
Unless you have a finance degree or are an accountant/investor, you’ll need some assistance with this aspect of your pre-launch planning. Any potential investor wants to know your starting capital and how much funds it will need in the future.
Decide on how you will be pooling in the capital and include these details in your business plan.
No matter how excellent your product may perform for the consumer, it can still fail in the market. Therefore, testing your product at a friendly market can be the key to gaining key insights into this.
If this test shows that your product has a good demand in the market, you can launch it after that.
Timing is fundamental in starting a business. Of course, everyone wants to start when the economy is healthy & growing and the prospective market is expanding. Still, there is also a flow to decision-making that entrepreneurs must be aware of.
If you are around 70% done on making the decision to start a business, do it. You have very little time to know if your decision was right.
While the notion may be tempting, starting a venture must not be a solo trip. Finding and learning from those who have already made this trip can help you set up for success.
Attending industry-specific workshops and networking with other industry players and thought leaders are the perfect approaches to achieve this.
It is practically impossible for a solo entrepreneur to know all about running a business and taking outside help can be a good strategy for effective implementation.
While you may be proficient in business management and marketing, you may not give the proper focus on accounts and cash flow management or vice versa.
Just because you are turning your ideas to reality doesn’t mean that you can figure everything out. Therefore there are a lot of online and mobile applications that can make your job easier.
One such application is ZikZuk Technologies’ Business Finance Manager (BFM), which syncs with your business’ Tally account to provide a holistic view of your business finances and gives data-backed reports that help in making smarter decisions.
BFM also helps in effective cash flow management through timely forecasts & projections to plan your cash flows.