People have varying reasons on why they would like to put up a business. There are those who do it as an alternative to finding a regular job and to achieve financial independence. Some like the freedom and power it gives as it allows the entrepreneur to become his/her own boss. For others, it fulfills a desire to offer the market something unique.
Factors to Consider before Starting a Business
In addition to having a good motivating factor to putting up a business, there are other factors to consider. One is your knowledge and expertise about the industry you are interested in getting into. Without both, you may get easily duped by competition, suppliers and vendors.
Once you have an idea on what type of business to get into, you should do the research and see if there is a demand for that particular product or service. Identify the target market and determine where they are. Some types of businesses may only yield local clientele while others may draw more customers from different locations. Keep in mind that the rules for selling can vary depending on where the target market is.
Calculate how much is needed to put up the business and keep it running. This is important as it may take several years before a business can see any profit. You may need to approach several banks to see what your options are in terms of short term and long term loans. Read the details carefully as banks have varying conditions, interest rates and terms for repayment.
The stability of the economy can also affect the chances of succeeding in the industry. You can still open a business even during tough times but keep in mind that this can also affect the mindset of customers when it comes to buying. Prices of supplies and labor can also change drastically so you may need to plan for those factors as well.
Return of Investment
Also referred to as the ROI, this is calculated by the dividing the Net Profit with the Investment. Expect the ROI to be small during the first few years. Compare this value with the expected ROI from other business options such as investing in the stock market.
Putting up and running a business requires a lot of time, planning and effort. You will encounter a lot of challenges and will need to take risks on a regular basis. Although there is no exact formula for success, you need passion, determination and a willingness to learn to increase your chances of becoming successful.
Reasons for Business Failure
It is important to point out that businesses can still fail. One of the most common reasons is picking a niche where the demand for a product or service is low. As a result, you may not see enough profit to keep the business going.
Lack of planning
Any person who is interested in putting up a business should have a business plan. The plan must be detailed and realistic. It should utilize accurate information that is current in order to create realistic projections and strategies.
All businesses need to have a website. Approximately 77% of people living in the US go online. A professionally-designed website should include some information about the company, what it sells and how to find the shop or contact the company.
One of the more recent and effective strategies for marketing businesses involves using social media. Social media allows businesses to reach out and communicate to people who like to go online. There are several reasons why businesses should take advantage of social media outlets. These include:
Social media helps businesses build up their brand. This is especially important for small businesses.
The platform makes it easy to share content and interact with the community. Businesses must be honest and sincere whenever they are using these outlets.
Other than building the brand, use of social media also helps companies keep tabs on what people are saying about the company and increase the reputation of the company online.
As you get to directly talk to your target market, you will instantly get feedback on any ideas. You will know what people want and hate and use the information to develop your ideas further before selling them on the market.
People around the world have access to the Internet and social media websites. This equates to millions of potential customers. Each individual follower has a list of connections which equates to more potential clients.
As with any marketing tool, it is important to have a plan and strategy. The same goes with using social media. Open accounts on several large social media websites. This will help build your brand and allow more people to get in touch with the company.
Another aspect to consider is using social media to build links. You can use social media to direct people to a certain part of your website or another website. Linking will help give your company a boost in terms of ranking on search engines.
The success and failure of a business largely depends on the efforts of the person who started it. Failure is still possible but through enough planning, effort and use of the right tools, you can put up a business that can last for years to come.
Bethany Wesch writes about blogging, branding and online marketing. She writes for QuantumLinx – an online marketing agency which specialise in providing SEO in Sydney to local businesses and sales people.