Elements to consider before starting a business venture
Before starting a business, it is important to make some vital considerations. If you have decided the product or service that you will offer through the business, it is necessary to know the things required to start the business. If you are pursuing a business venture for the first time, try to know about the benefits of starting a business. Also, knowing about the market of the product of your business shall help to know whether you can run the business or not.
Apart from all these, now the main factor is the investment required to start the business. You also need to consider whether you can run the business alone or you need other employees to join. To get the answer to all such queries, the following part of the article shall help you better.
Is it beneficial to start a business?
Starting any business venture is a good source to earn but it can be challenging for the first-timers. The business is a good alternative for the one who is tired of fixed working hours at the office and wish to earn something of own. As you start your business, you are the boss of the enterprise, and you will be responsible for every task in the business. There is no such fixed profit limit one can earn from a business.
Important things to do before starting a business venture
By knowing the vital things, it will help you when starting a business venture.
- Types of business
First, try to decide what type of business you can start. For the business, you have to decide a product that you wish to sell through the business. Under this, there are three options and they are service, merchandising and manufacturing. It is necessary to choose either of the categories when initiating a business for the first time.
- Service-based business – In this category of business, you have to sell expert knowledge and time. Some of the categories are IT, marketing, event organizer, starting restaurants, food joints, transportation, salon and the like.
- Merchandising business – For this, you have to choose business options like wholesale, trading, retail. In this type, the items are bought and sold. Some of the instances are retail shops, grocery stores, online sellers and the others.
- Manufacturing types of business – In this business, resalable items are manufactured. Here, raw materials and machines are required depending on the business you do. For large scale one, it is also necessary to employ individuals if you are not able to handle the business tasks alone. Some of the examples are clothes, bags, gadgets, daily essentials and the like.
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- Knowing your target audience
For a business, customers are an important part to whom you will be offering a product or service of your company. For a large scale business, it is important to know who the target groups of the business are. Unless, you can grab the attention of the customers, you cannot sell business items and think of business growth. Before you sell the items, you have to know the age group of people who are interested in the item. This way, you can reach out to the targeted customers easily. This will automatically enhance the business sale. To know about the market, you have to research it well before starting the business. Initially, you have to come up with service and product that caters to every person in the market.
- Choosing location of the business
In case of starting a business, deciding on the right location plays an important role. You have to identify and look for the best place that suits your business. This way, you can reach out to large number of customers from the nearby place for your business service and products.
- Repairing and improvement of the location
Renting is a good option and you have to pay for it depending on the location of the business. In addition to this, the business owners have to pay advance and security fees at the time of hiring the location. You can make the payment after 3 to 6 months interval. Therefore, you have to make the payment depending on the need for your business. When taking a rented place, it may require some repairing along with improvements as per business requirements. In this case, it is better to add the repairing costs with the cost of the location.
- Formation of the business
After you have decided what you have to sell and the target group and where to sell the items, you have to think about how to start the business. For this, you have to choose one of the types of business.
- Full ownership – This indicates that you will be the sole owner of the business enterprise.
- Corporation type of business – In this type, the business will be shared by someone else who can also be a stockholder. To run a corporation form of business, 5 people are required.
- Partnership business – In this, you share the business venture with another person who is the partner of the business. In this, two people are required to run the business.
- How much capital investment is involved in the business?
Capital is a vital factor that is required to run any kind of business. It can either be in the form of cash or non-cash. For this, you have to make a list of the items that are required in the business. Depending on this, you have to decide how much money is required to prepare and buy the items. In the list of expenses, buying the items, repairing, and payment of assets are also included with other expenses of the business.
- Getting proper insurance for the business
Insurance is necessary for your business. So, before you start the business, it is important to opt for the insurance. This will help you avoid any unwanted complications when running the business.
- Assets required for the business
Plan assets properly that are required to run the business. Some examples of the assets are furniture, appliances, computer, vehicles and the like. In this, along with deciding the assets that you need to buy, you also have to consider the price of the items.
- Suppliers of your business
You need to get in touch with identified suppliers for the business so that they can supply the service or products of the company. In this case, you have to consider the location, reliability, price and the time required to supply the items. Based on this, you have to discuss the details with the supplier.
- Knowing the business expenses
Make a list of the items for which you have to spend money in the business. It includes salary, office rent, supplies, utilities and the like. This way, you can know about the monthly cost that is required in the business. Deciding on the capital requirement is an important part. Knowing about the details of the monthly expenses shall help you prepare the capital required for a year of 6 months.
- Hiring an individual or opting for outsourcing
Managing people in your business can be challenging. Depending on the size of the business, you have to decide the number of individuals that you need to hire. As an alternative, you can also try the outsourcing option. If you hire people, you have to give them a salary. On the other hand, when opting for service from an outsourcing company, you can expect to get reliable and expert service suitable for your business.
- Looking for registration, tax identification and license of the business
Other than deciding the expense and capital requirement of the business, you have to register business name. In addition to this, complete paperwork, incorporation and get necessary registration and license of the business. In this relation, the local corporation helps the owner of the business to meet the regulatory rules of each of the country and its location.
- Opening a bank account
When starting a business, it should have a separate bank account. This shall help to maintain the records properly. In case, the business is of a sole proprietorship, a separate bank account shall help to get easy access to the bank details easily.
- Knowing about marketing and competition
No business can run without marketing. Depending on how you can market and promote business products, you can make it successful. For this, you have to choose the correct marketing platform through which you can reach out to the wider audience of the business. Also, with little competition in the market, you have to know the right tactics that shall help you make a prominent position in the market and sustain it for long. Try to know what your competitors are offering. By offering something similar and unique, you can stand out from the rest in the market. Try to know how the competitor is progressing it will be easy for you to get success in your business. So, market research is important to get progress in your business.
- Details of government compliances
The business owner should not forget to report to the concerned government about the business every month, after 3 months or once in a year. If you have achieved success but forget to comply with government, the business is sure to face problem in the future. To avoid penalties, payment of tax, PhilHealth, income filing and the like should be done in time.
- Accounting and financial analysis
Every business needs to have a reliable and suitable accounting process. It helps to maintain easy flow of the business finances. Through the accounting report, you can get to know about the condition of finances in your business.
Only after knowing these things, you should start the business that shall help you achieve success in your business fast and run it smoothly.
FAQs on things to know before starting a business
Q1: How to start a business without investment?
Answer: If you wish to start a business without any investment, you may be able to get the items that are required to run the business. Before starting the business, you have to save for 6 months or so. In addition, you can opt for additional funds from friends or family. If not, you can opt for a business loan.
Q2: Which type of business is suitable to earn money?
Answer: Any kind of business is suitable to earn money. But you have to plan carefully and know the demand of the business in the market to earn a profit.
Q3: How can you make quick money from the business?
Answer: To earn money quickly in your business, you have to promote your business better. Try to opt for marketing both in the offline and online mode. For this, it is better to create a business website through which you can reach out to a wider audience. This will help your business to spread, and you can earn money better from it.
Q4: How to get a loan for your business?
Answer: To opt for a business loan, you can take help of the Pradhan Mantri Mudra Loan Scheme that has been initiated by the government aiming the businessman in India. Through this, they can opt for a loan from the banks.
Q5: Is it required for all forms of business to register?
Answer: Yes, irrespective of whether it is big or small business, it is necessary to register it to prove that you are legally operating the business.