5 Most Important Things to Consider at Initial Steps of Business

Every new start up business has to face multiple challenges. There are a lot of questions going on about what should be the next step? What legal requirements are needed? How much fund is required in what type of business and where to generate the funds from? There are a few most important things that one should consider before starting a new business.

1 - Which Business should You Be in: Sole Proprietorship, Partnership or Company?

If you have very low funds available and you want to start a small scale business then you must consider sole proprietorship and reaching out your friends and family for funds. If you want to avail higher business opportunities, you can opt for partnership, the option is increasingly beneficial as instead of coping with your weaknesses on your own, you will have a partner to overcome the situation. Those with big capital can go for large business operations but it will require careful and calculated planning as well as legal requirements need to be fulfilled. Depending on availability of funds, the expertise and skills of the owner/s and the type of business in which they are investing, all things need to be taken into consideration seriously.

2 - In which industry you should enter?
It totally depends on your area of interest and market; study your specific industry of choice, the competitors, the market trends and most importantly the economic cycle stage of that industry. Do complete SWOT analysis and PEST analysis of your industry, study suppliers and buyers, the economic conditions, availability of raw material, the impact of import and export, government policies and restrictions. Many of the budding businessmen do not pay heed to this section and as a consequence, they suffer afterwards.
3 - What would Be your Unique Selling Proposition?
The most important question is that what would be your unique selling proposition that will lead you to cater the most demanding needs of your customers. On what factors your competitors are targeting and on which you can make a difference. Number of competitors, the market leader and the followers, their sole trading purpose, strong vertical or horizontal integrations and the mediums they are dependent on for the supply of raw material. It is your duty to identify the gap and develop the products and services accordingly. If your idea is unique and you have got the strong selling proposition, it will work to give your brand a long lasting impact and an impressive presence to get the higher market presence and share.
4 - Who is your Target Audience?

Do in-depth study of your target audience; divide the audience into specific segments and analyze how you can cater to their needs and start by targeting small groups first. Focus on your segment and try to fulfill it and keep your vision more general so that you can move forward in multiple things in the future. Unilever, P & G, Virgin and Tata Group are the few examples who went for diversification to mitigate their risks. Small businesses can progress a lot as their target market is small due to which, small businesses have high potential.

If you are focusing on a niche, you have the opportunity t offer best products at good prices and better quality. Besides increasing sales, you can direct your business to cater society’s need, for an instance, Tom’s Shoes are selling shoes to people and donating the same pair of shoes to the people of Africa. P & G came up with the Pampers Vaccination Program, with every purchase of pampers pack one dose of the vaccine is donated to young babies.
5 - Where to Get the Funds?

For a new startup business, you must have enough funds available to bear the expenses for three continuous years, capital is the biggest need and hurdle in the way of sustaining your business, and you have to cover the expenses of employees’ remuneration, maintenance, bills, and purchase of office equipment, office goods and other expenses. Even to fulfill the legal requirements of your business you need funds. It is important to keep a close record of the sources you can have funds from, explore the options including borrowing money from acquaintances or bank, adding more partners into the business to manage the expenditure. Many businesses started and collapsed due to the shortage of funds; make sure that you have a backup plan at hand.

There are other factors also that are crucial for your business growth and functionality and it’s all about taking the right decision at the right time. Every business faces different challenges but there are few that every business has to face.