Starting a small business is an incredible and rewarding idea. With the right education, experience, and work ethic, you can start and grow your small business into an established organization. Besides, there are many advantages to becoming an entrepreneur, for example, you will become your own boss, you will have the potential of increasing your income, and you will be doing something you love.
Although it is a rewarding idea, you must execute it properly for you to be successful or else your startup might fail. So what are the things to consider before starting a business?
Every business opportunity starts with an idea. Before starting a business, you need to master the process of generating ideas by yourself. If you want to generate a flow of ideas, approach the process from different angles. Here is how you can do it.
People face different challenges every day. For example, in some towns in Kenya, people have to walk several miles to find the nearest drug store. If this is a challenge near you, consider starting a small drug store or even an online drug delivery service.
Analyze a trend and jump onto it fast so that you can create a product or resell a service. For example, many Kenyans on social media platforms are now using videos to update their statuses and share something amazing, funny or astonishing. In your case, consider creating video content and start promoting companies through your videos.
Or, spot trends and use them to create a product that people will pay to have it. Choose your industry and take your time reading or researching on it. Do your research until you spot or predict an upcoming trend and build a business out of it.
Look at things you love and think of how you can turn them into a small business. You may be passionate about fitness. As such, consider starting a local gym, a boot camp, or becoming a fitness coach. Or, you can start a fitness blog and sell adverts online.
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Evaluating new ideas may sound easy. But it is something even the top managers in fortune 500 companies find challenging. By default, a new idea always has many uncertainties involved. In some cases, you need some data to back up your ideas.
It is essential to prioritize ideas and make a decision on which one to implement immediately. Furthermore, you must know which one to pilot or test, which one to defer to a later date, and which one to discard right away.
Evaluation is necessary because it can help you to identify new business ideas that are likely to succeed. It can also help you to review challenging ideas and have an understanding of what you need to implement them. Furthermore, it enables you to defend your ideas when the time comes to obtain a loan or some form of financing from a donor.
Do you know the costs involved in starting a business from scratch? How will you fund your business? While it is possible to start a company with a small amount of capital, you need enough funding to ensure the long-term financial health of your business. You have many options of getting the finances you need to start a small business.
You need to know the costs involved in starting a small business so that you avoid the mistake of starting a business without capital.
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It is easy to make mistakes when starting a new business. For example, it is a mistake to start a business with little capital, hire too soon, and misinterpret the market. Although you can correct these mistakes later, a poor location for your business is impossible to fix. Consider the following location factors before starting a business.
What is the style of your business? Are you running an elegant or formal business? The choice of location must match with the image and style of the business you are running.
Who are your customers? How close are they to your business location? If you are running a retail store, demographics should form the basis of choosing your business location.
You should consider foot traffic when choosing a business location. Do not select a site that will tuck your business in a corner store.
In Kenya, the government has put many laws and regulations for starting a small business. These laws and regulations affect how a small business pays taxes and reports income. Also, some regulate how your business should dispose of excess waste or materials.
Understanding all the laws and regulations of starting a small business can be overwhelming. But the secret is to know which ones have a direct impact on your business. The most significant laws and regulations to understand are those that cover:
Talk to your business lawyer to help you know what laws will apply to you.
READ ALSO: Top 7 sources of business ideas & opportunities for entrepreneurs
Evaluate your competitors before starting a business. Ask yourself how each competitor is directly competing for a share of your target audience or the market. The following questions can help you to analyze your competitors better.
An analysis of your competition will help you to understand where your business will fit in the market.
One of the many factors to consider when starting a business is to have a plan. You need to create a business plan to give you direction. A plan will help you to figure out how you will grow your business and address issues that are likely to come out in future.
Furthermore, it will help you to focus on the steps you need to take to make your ideas succeed. Having a business plan can help you achieve both short-term and long-term business objectives.
Although it is possible to run a business on your own, you need a support network to be successful. Support can come in different forms from friends, family members, and professionals in the business world. Having a support network can help you in different ways.
For example, a support network can give you insight and guidance on how to run certain aspects of your business. The network can help you acquire new customers through referrals. Professionals in this group can give you new ideas on how to market your business and capture the attention of a broader target market.
READ ALSO: 10 booming businesses in Kenya that you can start right now
Before starting a small business, you should do enough research to ensure that you understand the market or the industry you will be joining. Forget about how good your idea is. The most important thing is to ensure that you can deliver something your customers want.
If you know who your customers are, you will know their buying decisions. It is impossible to make a profit without having a strong customer base. Research to understand what you will be doing and what you are getting yourself into.
You need to have an exit plan even before you start your business. The plan is crucial because it will help you work towards your aspirations and goals. You are getting into business because you want it to become a success. If you do not have an exit plan, you will not be able to sell it to make a big profit.
When you start the business, operate it with the thought that you will sell it later for a profit. Start your journey by keeping records, documenting every transaction, getting contracts signed, and maintain good relationships with vendors and clients.
The way you will structure your business will determine how you will run it. You can structure your business as a limited company, sole proprietorship or a partnership. Each of these structures has its pros and cons, as well as some legal aspects involved. Ensure to talk to a CPA or a lawyer on the best way of structuring your new business.
Everybody starts a business to succeed. But to ensure long-term success, it is vital to consider the above factors including environmental factors and how they will impact your business. Do not start a business without a strategy or a plan on how you will exit it.
Make sure you have enough capital so that you can maintain the financial health of your business. Note that the business environment in Kenya is very competitive. As such, you must be unique to attract new customers and retain your share in the market.
READ ALSO: How to start an NGO in Kenya
DISCLAIMER: This article is intended for general informational purposes only and does not address individual circumstances. It is not a substitute for professional advice or help and should not be relied on to make decisions of any kind. Any action you take upon the information presented in this article is strictly at your own risk and responsibility!
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