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What to think about before starting your own business

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The idea of taking control of your life and finances by starting your own business can be very enticing, however with the majority of small businesses failing within the first few years it’s so important to make sure you’ve got all your ducks in a row before taking the leap.

If you’re thinking about starting the journey to becoming self-employed, here are a few things to consider that will hopefully make for a slightly easier ride.

Have you done your research?

It’s imperative that you do some research before starting a business so you have a good understanding of the environment you’ll be operating in, considering both internal and external factors that are likely to impact your business.

Do you know who your target market is? Do you know who your key competitors will be? How will you set yourself apart from your competitors? Who will your suppliers be and will they be reliable? Will you need to purchase equipment to get started and how much will it cost? Have you worked out how much revenue you’ll need to earn to cover your overheads? What will your branding will look like?

These are all important questions that you need to have answers to before you decide to put your money on the line.

Have you developed a business plan and set clear goals?

While the importance of establishing a business plan and setting clear goals is often underestimated by new business owners, it’s a process can really make-or-break your business.

You’ve probably got a whirlwind of ideas for your business and a business plan allows you to formalise those ideas into a usable blueprint to guide your business. It can be easy to get caught up in the detail and become distracted from what you originally set out to achieve when running a business, but having a business plan in place provides you with an anchor point that can help you steer the ship back on course if things go a little awry.

Establishing some goals that you can use to track your progress and ensure you’re performing to the standard you need to is also important. Set some SMART (Specific, Measurable, Achievable, Relevant and Time-based) goals that will give you a benchmark to assess how your business is performing and where you need to improve. This is so important as you want to be able to identify if the business isn’t viable as early as possible, before you become too heavily invested.

Where will you operate the business from?

The location you operate your business from will largely depend on the industry and type of business you’ll be running. You may be able to operate the business from a home office, but if you require a shopfront or other space, it may be worthwhile finding a commercial property for lease. Leasing a property will afford you more flexibility compared to buying and you won’t need as much money upfront.

Have you got your policies, systems and processes in place?

New business owners often think they’ll work these out as they go, but if your business takes off quicker than you anticipate you’ll thank yourself for having put some time and effort into establishing these from the get-go.

Invest a little time to develop some basic administration, accounting and manufacturing processes and systems, and work out how you’ll manage your website, customer database, service standards and returns policies. While you can refine these as your business develops, you’ll be doing yourself a big favour by putting a few things in place from the beginning.

 

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