Having your own business is always an exciting what-if.
Many people these days trying to have economic freedom.
Many of us often believe we simply need a good idea to have a great business.
However, even you have a such brilliant Idea, there are few things you need to consider before you actually start your business. Here I would like to point out few key questions you should ask yourself.
How much do I need to launch/execute the actual business?
You need to come up with such a number that how much you can afford now and how much do you need to open your business. This including the marketing cost, employee salary, office operation cost, and all the other expenses you need to "maintain" the business before you start making a profit. How much money do you have now and how long can you "survive" without making a profit? How much time do you need to set your idea to become a business which is well ready enough so the customer can enjoy and purchase either your service or item? What is the backup plan if this business requires more funds to operate at some point?
2. Why do you think your service will be successful and what are the data and reasons that backing you up to your belief?
I often meet and talk many young business owners or pre-owners who would like to discuss and share his/her idea about the new business they are trying to set up and run. They always have good reasons why their Idea based business will be good but not fail. However, their reasons often rely on their own assumption without such data or stat-based strong conclusion.
"People need this and this way of helping them will easily generate more sales because
it is so useful."
This is not the right way to love your business. You need to have more detailed data which will lead us to conclude that at least in how long of time how much of sales and how much of profit "can" be made. Yes, there are so many people out there who make millions of dollars so quickly with such brilliant ideas. It seems like all you need is just a good idea then people will find your service/item and you become just rich quicker than you imagine.
Yes, it will be more than good if this smooth path is upon you but Not likely this will happen to you. One of the critical things in Business especially the start-up or opening a new business is that there are so many contingency and unexpected variables that easily can kill your business. You need to rely on the number and stats to start a business instead of cross your finger and wish.
" There are X numbers of people in Y area who needs Z product or service. There are B numbers of companies which provide Z product or Service and the Average Price of Z product or Service is about 10 USD / Case. X numbers of people in the Y area purchase Z products or Services at least 2 times per month on average. There are currently X times 2 per month of Purchase is made. If My Product or Service Q is out there with a price of 8 USD / Case with better quality, and trying to secure 2 % market that is 8 USD times 0.02 times 2 times X which is [ ] USD / month as a rough sales. The profit rate is about 10 % so I make [ ] USD / Month. My Monthly service operation cost is [ ] USD / Month. and so on ...
This is not rocket science. This is just a basic thinking system that you always need to have to run the business in numbers before you jump in with real money.
More you spend to research and come up with actual data, you can approach and set up more strong plan and structure that can protect your business in many cases.
3. How Am I going to execute the Marketing Activities?
Let's say you have such a great Item or Service to sell. You need to let potential customers know about your service. How are you going to do this? what is your plan? How much experience or knowledge do you have about Marketing? What is your expectation and how much is your budget to spend for marketing for how long of a period? What is your target number such as members of your service or traffic you generate every month and so on?
As an owner of a business consulting company, I often received a question that which is more important between the quality of the Item or service vs the marketing activities.
I would like to say this way.
" Your service or item needs to be good enough when people get to know about your service and gladly spend money to purchase. However, people need to know about your service or item first so they can have a choice either hate or like."
There are few more questions you can think of before your start a business :)
Why I would like to do this business?
How much I want to make?
Who will use my service?
How this will make a profit?
What do I need to provide?
How long does it take to generate profit?
What are the data and statistical analyses that support my Idea from a business perspective?
How many competitors are already in the market?
What is my unique selling point?
Why potential customers should choose my item/service instead of current competitors?
How am I going to let people know how good my service/product is?