Starting a new business is something great and commendable. However, it is also something that will require a lot from you as a person such as hard work, determination, perseverance, and so on. Yet, it does not stop there. This is because there are things to consider when starting a business. These things are what will work with your great qualities to make your business grow and succeed.
So, the question is “what are those things to consider when starting a business?”
You ought to succeed as you are setting out on this new venture.
So, follow this discussion and discover those essential things to do and know when starting a business.
To begin, let’s take a look at why people start businesses.
Why Start a Business? – Things to Consider When Starting a Business
Several people go into business for different reasons.
However, regardless of the personal reason people start a business it usually falls into three main reasons or categories.
Knowing and understanding why you are starting your business will help boost your motivation to consider and get those things that matter as you start your business.
So, here are the three reasons why people start a business:
To Work With Their Passion – Things to Consider When Starting a Business
If you are passionate about something, you can turn it into a business or profession.
When working for someone, you might be able to do that thing you are interested in.
Even if you do, you are most likely going to spend more time doing other tasks that you aren’t interested in.
Hence, starting your business can be a great way to focus on and invest in whatever you are interested in.
Yes, while owning a business there are other tasks you will still need to carry out.
Nonetheless, you can have employees who can do them, and the ones you cannot delegate to employees will not take as much time and effort.
So, your reason for starting your business which is doing what you love will still be fulfilled.
To Control Their Work Conditions and Environment
Another reason most people start a business is to control their work conditions and environment.
When you work for someone, they dictate how, where, and who you work with.
Your work schedule will not be as flexible as you want it to be.
Hence, starting a business can be a way for you to create a flexible work schedule for yourself.
You get to decide who you work with or if you prefer working alone.
Also, you get to choose your suppliers and customers.
Having these options can be great for you if you have responsibilities outside work.
To Introduce a Solution or New Product – Things to Consider When Starting a Business
Several people have great ideas and solutions that they can’t sell to the world because they lack the platform to do so.
However, when you start your business, you create a platform for you to share your idea with the world.
Not only that, but you also get to control how your idea is produced, the looks it takes when produced, the people involved, and how it is solved or marketed.
16 Things to Consider When Starting a Business
Starting a business is a great and commendable thing.
However, starting a business takes a lot.
You have to ensure that everything is put in the right places to ensure that the startup and growth level are successful.
If you do not know those things you need to put in place, then you need to find out.
Below are 16 things to consider when starting a business:
1. Business Idea
Before you can think of starting a business, a business idea needs to be in place.
If you already have a business idea, then you have to consider how your business idea will be grown into a business and what needs it satisfies.
Understand that a business cannot flourish if it is not satisfying a need.
For example, let’s assume you leave in a community where the delivery services are slow or non-exist
You can come up with a business idea to either speed up the delivery services or create one.
This idea can then be built into a business which is meet the needs of people in your community
So, you have to consider your business idea and check if it can be built into a business that meets a need.
2. Start-up Cost – Things to Consider When Starting a Business
No matter how small scale you want a business to be, it will still require money for the start-up.
Hence, you have to know how much will be needed.
In other words, when starting a business you have to consider the start-up cost.
You will have to consider everything that will be needed to start up your business.
This includes the technology or equipment you will need for the overall operation and also the needed raw materials.
While considering their cost, you also have to consider the cost of replacing them if there will be a need to.
There is also the cost of location which include rent and upkeep cost.
If you won’t be using a physical spot, then you have to consider things like shipping or vehicle costs.
Furthermore, you need to consider services such as marketing, design, web hosting and adverting.
Finally, you have to think about your budget and if it will include employees’ pay and your living expenses.
3. Business Plan
Several people tend to avoid this aspect of starting a business.
However, it happens to be an important factor for a smooth running and successful business.
This is because a business plan serves as a guideline for how a business will be run.
It defines business goals and objectives and how they can be achieved.
Without a business plan in place, business owners will find themselves doing different things that most likely won’t help their business to grow.
So, when starting a business you have to put your business plan into consideration.
If you don’t know how to build or create a business plan then you should learn how to.
4. Business Structure – Things to Consider When Starting a Business
Another important thing to consider when starting a business is your business structure.
A business structure is a legal structure a business takes on that determines its daily operation.
There are four types of business structure, which are:
Sole Proprietorship
Sole proprietorship businesses are run and operated by one individual.
They are the easiest to establish.
The business’ taxes are added to that of the owner’s tax return and they get all the profits to themselves.
This is because there is no legal separation between the business and its owner.
This type of structure is considered to be advantageous because it is less expensive to start with lesser registration fees.
Partnership – Things to Consider When Starting a Business
A partnership business structure has more than one owner.
It is also a simple business structure type.
However, more than one person makes decisions and runs the business.
The partners of a business are responsible for paying the business tax.
In other words, just like with sole proprietorship, the business taxes are attached to the partner’s taxes.
When registering this business structure, the partners will have to agree on how the business will be operated.
Hence, the partners will have to sign some paperwork to make it legal.
Again, just like a sole proprietorship, a partnership structure comes with good benefits.
Corporation
Unlike sole proprietorship and partnership, the businesses registered as a corporation have their entity legally separated from their owners.
This type of business structure is expensive and complex to build.
It demands that the owners comply with a lot more than tax regulations and requirements.
Corporations pay both state and federal taxes.
Also, when their owners file for personal income taxes, they are made to reveal their dividend payments.
Corporations are classified into two categories:
- S-corporation: This functions as a partnership but can have as many as 100 shareholders.
C-corporation: This has a legally separated unit from its shareholders.
One great benefit of corporations is that they can easily raise capital.
Limited Liability Company (LLC) – Things to Consider When Starting a Business
LLC business structure is considered to be a hybrid.
This is because it combines the traits of a corporation and partnership.
It doesn’t share entity or liability with the owners.
Also, the business requirements and taxes are reduced.
Every owner in an LLC takes a share in the business profits and losses and this is added to their tax returns.
Furthermore, LLCs can have as many shareholders as they want, unlike S-corporations which have a 100 shareholders limit.
LLC business structures are expensive to build, but it comes with the benefit of fewer requirement and limited liability.
When starting your business, you have to put all these business structures into consideration and pick the one most suitable for your business.
5. Location
You have to put your business location into consideration.
These days, you don’t need to have a physical spot or a storefront to run a business.
So, you can start from your home or online and ship your product to your customers, or travel to provide your service.
However, if you want a physical spot or storefront you have to consider where that will be.
You will need to consider the space and the best place that will attract customers to your business.
6. Targeted Audience – Things to Consider When Starting a Business
Another thing you have to put into consideration is your targeted audience.
You need to understand that no business can smoothly operate without customers.
So, you have to be specific and careful to know who your targeted audience will be.
This way, you will plan and prepare how and what will be used to appeal to people to patronize your business.
For example, if you want to start a toy store business, then your targeted audience will be children.
Hence, your business branding and marketing will have to be something that will appease children.
Also, knowing your targeted audience can help you to know the best location for your business.
Since you are selling toys, choosing a location will few populations of kids will be an unwise decision.
Therefore, you will have to consider where large populations of kids are and set shop there.
7. Competition
Whether you like it or not, you will likely have competition in your business.
Hence, when starting a business you have to consider and evaluate your competition.
So, make research on the business that provides or produces similar services or products as you.
Check out how they operate their business, their marketing and pricing strategy, who their clients or customers are, how they are faring, and also their challenges.
Make use of what you have learned from their business to make your business better.
If you don’t have people doing the same business as you do in your region, then ensure that you do your best.
8. Business Name – Things to Consider When Starting a Business
Names are powerful and important, even for businesses.
This is because the name you give to your business can have an impact on its growth and success.
So, when starting a business, you have to consider the name you will be giving to it.
You shouldn’t just give your business any name that comes to your mind.
Rather, you need to carefully consider and reconsider the most suitable name for your business.
When thinking of a name to give your business, here are a few questions you should ask and consider:
- Does the name sound good when said aloud?
- Is this name conveying a benefit and is there a good meaning attached to it?
- Can people easily spell and pronounce this name?
- Is there any business already bearing this name?
- Am I happy with this name?
There are other things to consider when naming your business.
So, check out those things, consider them, and come up with a name that will be beneficial to your business and also pleasing to you.
9. Financial Management
When it comes to managing and running a business, good management of the business’ finance is very important.
So, when starting a business you need to consider the financial management aspect of running the business.
You know yourself.
Hence, you can easily know if you are good at managing finance.
If you are not, then you need to learn how to.
The basics at begin an effective financial manager are:
- Learn to spend less than your earnings
- Understand financial risk
- Learn to budget
- Plan for the unexpected
- Pay attention to your taxes
- Make good investment
- Practice good record-keeping
10. Online Presence – Things to Consider When Starting a Business
Several people now shop and require services online.
Some people don’t even go to stores anymore to get their items or pay for services.
So, if you want to flourish in business in the world today, you have to build a good online presence.
In other words, you need to create social media account for your business such as Facebook, Instagram, and Twitter.
Also, you will need to create a business blog and website.
When you create all these things, people will easily access your business.
You will be able to directly speak to your customers and clients and build good working relationships with them.
Understand that online presence will boost your business further.
So, you should put it into consideration.
Check here to discover the reasons why your small business needs an online presence.
11. Funding
As you need to consider the cost of startup, you also need to consider where you will get the money for it.
There are different ways to get funding for a business.
Some of these ways include:
- Bootstrapping
- Crowdfunding
- Angel Investment
- Venture Capital
- Personal Savings
- Incubators and Accelerators
- Government Grant
- Selling Assets
- Credit cards
- Financial aid from friends and family
You have to consider which of these means of funding will be best for you.
12. Legal Requirements – Things to Consider When Starting a Business
As you consider the business structure you will pick for your business, you also need to consider those legal requirements for your business.
Now, you need to understand that the legal requirement for business differs based on the type of business you operate.
For example, the legal requirements for selling foodstuff differ from that of selling clothes.
So, you need to find out the terms and conditions for running your kind of business to avoid issues and inconveniences.
13. Uniqueness
Different businesses can provide the same product or services.
However, the way they do can be different.
It all boils down to uniqueness.
So, when starting a business you need to consider the value you can provide to people that other businesses don’t.
Your business will flourish more if you have something that set it apart from other businesses as it boosts it’s brand and reputation.
14. Marketing – Things to Consider When Starting a Business
Another thing you have to consider when starting a business is the marketing of your business.
Marketing has to do with how you let people know about what your business does.
There are different channels for marketing and advertising, so you need to consider what will work best for your business.
15. Employees
You can decide to work alone when starting your business.
However, as your business grows you will need more hands to do the different tasks.
Hence, employees are another thing to consider.
You can decide to employ people full-time, part-time, or even outsource tasks.
Whatever it is you will want to do, you have to decide before you start your business.
This way, you will plan for it.
16. Limits – Things to Consider When Starting a Business
You need to consider your health and how far you are willing to go to build your business
This is because you are the one who will be doing most of the work.
If you have no limit and stress yourself beyond what you should, your health and business will suffer for it.
So, you need to set boundaries for both work and personal matters.
Set specific hours for work based on your strength and capability.
You can consider having a back-up to keep things going when you reach your limit.
This way, your operation will keep going even when you are resting.
Conclusion on Things to Consider When Starting a Business
You cannot head into starting a new business without considering and putting certain things into place.
If you do, you will struggle with running and growing your business.
So, what are those things to consider when starting a business?
They are marketing, uniqueness, legal requirements, business name, business structure, and many more.
