Some of the things you should consider when thinking about starting your own business. These things may not apply to everybody, but I think they can still be helpful in most situations.
1. Is the industry growing, steady, or falling?
There are a lot of different business opportunities. When thinking about starting a business, you should consider, what is your goal with it? If you want to go into the business for the really long term, it might be a good idea to think about something, what you think will still be around after a decade or two.
The world today is changing fast, and new technologies are being developed faster than ever. Internet has brought the world together and built a lot of opportunities for new businesses.
2. Think outside of the box
Sometimes, the ideas that sound the most stupid, might be the next big thing. You don’t have to invent the next smartphone or teleport machine unless you have the skills to do so.
There are business opportunities, where you can just do something differently, maybe more efficiently or just bring a new perspective and that way win over the audience your business will need.
Maybe your idea doesn’t even have to be that unique. Just use an old idea in a new location or in a new way. You don’t have to reinvent the wheel.
I have a post about outside the box business ideas. You can read it here.
3. What is the cost and risk of starting a business?
This might be easier to explain with an example. If starting a business will cost you ten thousand dollars, but it can generate it back in one year and many years to come, the risk-to-reward ratio is good, I would say.
Even better if you can scale that up, and every year, re-invest that ten thousand to make another ten thousand per year. This is a dream scenario, but it can be achieved, if you find the right idea for it.
4. Do you need help and from whom?
Most businesses, at least where I live, use accounting services. It will lower the stress levels of the business owner itself, because at least the bookkeeping is done correctly. A good accountant will pay itself back, when everything is done correctly, and you get the tax benefits you are supposed to.
My accountant said it like this “A good accountant is worth its weight in gold”. Well, I don’t really know about that, since my accountant isn’t a small guy and gold prices are around 57 000 dollars per kilo, so my accountant would be worth a bit over five million dollars. But hopefully you get the point, a good accountant is very important.
You might need some extra staff as well. Depending on what kind of workers you need and how many, you should really try to get the perfect ones for the job. If you are looking for customer service staff, only take the very best. Customer service is the face of your company to customers, and if the service is bad, the customers won’t hesitate to switch you to your competitors.
The best saying, I have heard about hiring people, applies perfectly for small businesses: “Only hire superstars”. This means, you should only hire only the very best of people. If you don’t find the right one right away, keep looking. The staff will determine the future of the business just as much as the owner.
5. How the competition will affect your business
The next two things come hand in hand. First, how is the competition in your desired industry? Is it already crowded or is it still growing? A good book related to competition is Blue Ocean Strategy.
I recommend it to everybody thinking to start a business, that has even some competition. It is possible to succeed even in a very competitive playground if you have a way to stand out from the crowd.
6. The barrier of entry
The second thing that is highly related to competition, is the barrier of entry. Meaning, how easy it is for new businesses to start their own operations in your industry.
Does it require certain permissions or skills from the workers, whatever that might be, it might be safer to start a business for an industry that has at least some kind of barrier of entry, and new competitors won’t be opening to every corner of your street.
These are some things you should consider when starting a business. Variables in different industries vary a lot, but I think these will apply to the majority of them. There are obviously a ton of other things to consider as well; these are just some that I thought should be considered.
I made a post about why you should start your own business; you can read it here.
Hopefully this was hopeful for you, have a nice day.