A Guide on How to Start Your Own Business

If you are tired of the daily grind of your monotonous job, you may have dreamt of becoming your own boss someday. But before you quit your job to start your own business, there are some things you should keep in mind.

You should know when to start a business and how to start a business. Planning and foresight are crucial for any entrepreneur, especially someone who is new and without a lot of experience in the field. Luckily, we have some business tips for addressing all your queries and curiosities when it comes to starting your venture.

1. Knowing When to Start a Business

This is a very important but often neglected aspect of entrepreneurship. Timing is key. You can’t enter a market when it is too saturated with competition, and you can’t enter a market that is dying. You must keep in mind the nature of the commodities or services you are selling and if the market you are entering is currently viable for that particular business opportunity. For example, starting a restaurant right now in the middle of the pandemic will be a disastrous business decision. Social distancing, recurrent lockdowns and the rising costs of transportation make it an incredibly expensive business with falling demand. Meanwhile, this is a great time to get into a face mask manufacturing business because the demand for masks has shot up quite significantly, and there is enough market demand to make it lucrative.

It is important to know what is the best time to start a business from a market perspective, but that is not enough. You should also take into consideration what the best time to start a business from your personal perspective would be. It is likely that you either have a job or some other business as a source of income for you right now. You also must have family responsibilities and expenses, personal expenses and various other liabilities and assets. Starting a business requires a lot of investment and capital. Therefore, it is important to make sure you have the capital available. You should also make sure that you have a stable source of income for the first year of business and that you don’t have any significant liabilities that could cause financial strain.

For example, if your children are young and about to start school or college, that could require a good amount of money if you start a business during such a time that could cause financial strain and stretch your resources thin.

2. Settling on a Niche and Scale

Once you have determined when to start your business, you should decide what kind of business you want to start and its scale. You need to determine if you want to sell some sort of goods or service. Service-based businesses will require you to have certain skills or to hire people with those skills. This is because when you are selling a service, you are essentially selling a skill. For goods based service, you will need to establish contacts with relevant suppliers, vendors etc. and stock up on inventory.

You will also have to determine the scale of your business. You can choose to be a retailer or seller of goods or set up a manufacturing plant that would require incurring extra costs. You would also need to determine the extent area that you are serving. Serving a large area requires extra infrastructure and staff.

It is always advisable in any business to start small and scale up later as profits start coming in and your business starts developing a good reputation and some customer loyalty.

3. Market Research and Creating a Business Plan

Market research is an essential aspect of how to start a business. You must know how to create a business plan, and for that, you need to research the market that you plan to enter.

We have already talked about some of the research you need to do to enter a market. You must know when to enter a market. You should also know the goods and services that are being sold in the market and their demands. Identify gaps in the market where you can feasibly enter. Research your competition. Understand how they run their business. What is their business model? How much do they charge? How much staff do they have? What is the scale of their business?

You will also need to research suppliers and vendors essential to their business. Find out how much they are charging your competitors and try to get a good price for yourself. Find out if your competitors have exclusive deals or contracts with any suppliers. Understand the business network that is present in the area and how you can take advantage of it. Make sure there are no hostile rivals or other issues. Once you have researched all of this, you can create a business plan.

4. Securing Capital and Investment

There are many ways of securing funding and capital for your business. If you are thinking about starting a small business, then the funding required for that will also be modest. You can dip into your savings or take out a small business loan. To avoid too much exposure and risk, you can also get a business partner to distribute the risk and secure more capital.

Another way of securing investment without taking out a loan or dipping into savings is to secure an angel investor. These investors are usually successful entrepreneurs with a large network of investors. If they find your business pitch viable and innovative, they may invest in your business and take a share of profits if it proves successful or incur losses if it fails. Angel investors expect high performance for their investment and will hold a stake in your business in return for their capital.

5. Recruiting Staff

Once you have set up the bare bones of your business, you will need to recruit some staff. Your exact staffing needs will depend on the nature of your business. A sales business will require salesmen, and a courier business will require delivery persons and so on. To recruit staff, you can go to employment agencies to find someone who matches your exact needs and requirements. You can also post ads online on job-hunting websites. You can place ads in local newspapers or distribute fliers and pamphlets for unskilled or low skilled work.

Your staff can be full time, part-time or hired on a contract basis. However, it is advisable not to hire a large team right at the start and scale up your staffing in accordance with the size of your business.

To manage your staff’s payments, attendance, leaves/ absences, you can maintain a digital ledger on apps like OkStaff. This will enable you to manage your staff efficiently and transparently without spending extra man-hours on inefficient physical ledgers or recruiting an additional manager.

Also read:

1) Best Tips for Customer Retention for a Small Business
2) Tips to Understand Your Market while Starting a Small Business
3) Tips for Businesses to Overcome the Covid Blues - Revival Tips for Businesses
4) What are the keys to success when operating a small scale business?
5) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. Why should I start a business?

Ans. A business lets you be your own boss. It is much more exciting since you have a real stake in the company and its success. It allows you to grow at your own pace without having to depend on mercurial managers or worry about being laid off when things aren’t favourable.

Q. How much should I invest in my business first?

Ans. You should keep your investment as minimal as possible at first and then slowly scale up as you expand your business and establish yourself.

Q. When can I expect my first profits?

Ans. You should not expect any profits in the first year or two. After that, it will take you some time to break even, depending on the amount you have invested and the scale of your business with respect to that investment.

Q. How much of my profits should I invest in my business?

Ans. You should invest almost all your profits straight into your business initially to enable it to expand. The best time to expand your business is when it first starts becoming profitable since you have a high probability of good returns on your investment.