Many successful businesses have been started by entrepreneurs without prior planning, propelled only by the burning desire to own a business and sheer luck. These stories are however few and far between. And as these businesses grew, many of the entrepreneurs wished they had carefully evaluated their choices and the business potentials, because they made several mistakes along the way. So, plan, in the beginning stages of your business and also assess its success potential. You do not want to spend precious time and money on a business that is not feasible.
This will help you become more focussed and reach success more quickly. For which ever business you decide to start, consider the following questions to assist in planning:
Start up cost: Ask, what are the out of pocket costs to start this business? Plan on enough money to keep your business running for three to six months before you get any income out of it. Often your start up cost exceeds the amount you thought it would take so it is a good idea to add 20% onto the budget and then work within the limit. Before you decide on the best financing option and if you are debt financing your start up, do your homework, choose wisely, ask for the right amount from the right source.
Income potential: How much money can you really make in the business?
Growth potential: Who are your competitors? Is there room for growth or is the market saturated?
Recession resistance: Will the business have ups and downs based on the economy?
Market appeal: Does the product appeal to the mass market or to a niche market?
Expansion potential: What are the chances of expanding your product or service offering? Increasing your number of clients or customers?
Absentee ownership: Can you take a holiday or vacation without worrying about a drop in your income?
Anxiety level: Will this business create a lot of anxiety and are you willing to go through it?
Time factor: How much time will it take to get the business up and running and do you have the time?
Lifestyle impact: How much will this business impact your life and family time?
Pressure level: Will the business constantly keep you on the edge?
Success ratio: What is the success /failure ration of this type of business?
Satisfaction factor: Will this business help you reach your goals?
These questions will force you to determine your direction(s), consider your competition and plan how to market your product or service. They are also food for thought and will help you evaluate your business choices and expectations. Finally, in addition to the above, understand the market trends affecting your selected business.
Your comments are always welcome.
