1. Startups

3 Things To Do Before Starting A Business

Do you plan on starting a business? Maybe you are currently employed now but you want to earn more money and you have considered business as your next option. I have something to show you in this post about things to do first before starting a business.

In most startup advise, the first thing you are told to do is to write a business plan. All that is good. You also need to plan for how you will manage your financials needs while the business is still trying to make profit.

I just want to show you 3 important things to do before you start that business. If you fail to do this, you may end up more frustrated than you were before you even thought of starting a business.

But if you get this right at this point, you will not only succeed in business, you will be well prepared for most of the things that crashes some startup businesses.

Why Do You Want To Become An Entrepreneur?

Let me digress a little here by exploring why you even want to become an entrepreneur. Of course, it’s the reason you are starting a business. No one become an entrepreneur for the love of being an entrepreneur.

You are motivated by something. The reasons are many but I’m taking the top 3 on that list of reasons. They are also why many become entrepreneurs. So, they will represent the reasons of many of the readers.

Find this list below:

  1. For financial freedom
  2. To be your own boss
  3. So you can change the world

The first group is primarily a popular reason for most people. They want financial freedom. So, they got to start a business. But their idea of financial freedom means to earn more money to be able to pay their bills and still have more than enough to play around.

While the second group are the “be your own boss” gang. Most of them here are well able to pay their bills. They work in well established organizations and are well paid. But they hate the idea of having to be answerable to someone higher, and waking up early to rush off to work. They want the freedom that comes with starting their own business.

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Our third group are those who have reached the pinnacle of their career and are looking for other challenging opportunist to change the world. These ones take on an industry and reshaped it to meet their aspirations and that of others who think like them.

To Do List Before Starting A Business

If you have identified your group and why you really planned on starting a business, here is my 3 Important to do list before you finally start the business. First, let me explain my reasons for picking only this 3 even though there are many things you should do first.

I want you to decide how long you want to play. Until you make that decision and be firm about it, little things can shove you off your plan. Another reason is that I want you to be really sure what you have is worth taking a risk on.

If you quit your job to start a business, going back to look for another job after sometime would be demeaning. You have to quit for good. While my third reason is that I want you to know that there are many challenges ahead. And you are not immune to them, unless you could anticipate them and mitigate against them.

So, as I take each one of these 3 things, you can see my mindset and what I want you to start doing about your business idea. I pray your succeed.

{1} Think Long Term

The first truth about starting a business is to realize that business is a long term play. Failure to realize that might cost you so much. But thinking long term is not in the imaginary sense. You have to plan long term and build structures to sustain your long term ambition.

Sometimes entrepreneurs agree on business being a long term play but their actions shows they are actually working on short term goals.

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However, playing long term helps you understand your growth stages and strategies required to grow to each stage. A business that doesn’t understand its growth stages really don’t know where it’s headed to.

When I first started a blog, I wanted it to grow immediately, until I read several reports only about how long it takes for a blog to grow organically. And because I wanted it to grow organically, I knew I had to commit to a long term goal.

{2} Product Must Be In Demand

If you have your long term plan well figured out, then your next agenda is your product. What are you offering as a business? What’s the future outlook for the product? What’s the demand potential?

In simple term, it just means for you to make sure that your product is in high demand. Don’t plan on starting a business on a product that’s not in demand. And it’s just knowing that it’s in demand, it means you should have your records to proof it.

However, don’t leave things to assumption. The demand for your product should be properly analyzed and tested with market realities. This leads us to demand analysis.

Understanding Product Demand Analysis:

This is to show the relationship between the price of the product and the quantity of product that a consumer is willing to buy for a given period of time, if everything being equal. The research gives estimate of customer demand for a product in a particular market. This covers futures demands and in retrospect to determine past success and failure.

This kind of study can help you conclude on any decision that requires risk on your part without the feeling of fear. But you need it done by a reputable consultant.

Here is the different types of demand (Culled from Economic Discussion):

  • Individual and Market Demand
  • Organization and Industry Demand
  • Autonomous and Derived Demand
  • Demand for Perishable and Durable Goods
  • Short-term and Long-term Demand

{3} Anticipate Failure Points

Having a high demand product doesn’t mean you can’t face challenges in business. In fact, starting a business is always laced with many unforeseen challenges you don’t even know exist. So, having a perfect product doesn’t stop the fair share of trouble.

And the most threatening ones maybe the ones to cause the business to fail. But if you do your product analysis, you will also identify some of these Failure points.

I would have liked to give more details on some of these Failure points but OnStrategy did quite a good job with 10 of them. See the list below and to read OnStrategy details on them click here:

  1. Failure to understand your market and customers
  2. Opening a business in an industry that isn’t profitable
  3. Failure to understand and communicate what you are selling
  4. Inadequate financing
  5. Reactive attitudes
  6. Over-dependence on a single customer
  7. No customer strategy.
  8. Not knowing when to say “No.”
  9. Poor management
  10. No planning.
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Conclusion

It doesn’t matter what kind of business you are planning on starting. These 3 to do list is necessary. Even if it’s a service business, these ideas also apply. And the way the 3 of them are interwoven around each other, you can’t do one and skip the other.

Although, these are not full-proof mitigating business failure. If you are starting a business that won’t fail, it’s not because you did everything you are told to do. There’s a saying in the Bible that: time and chance happens to everything in this world.

But what’s your role in keeping your business from failing should not be excused. You must first do all that’s within your power to make your business succeed. And then, leave the rest to time and chance to prove you right.

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