Answer these FIVE Questions BEFORE your Start your Business
Starting a business is one of the best decisions that a person can make to better their financial situations, but at the same time, this move can cause you a great deal of stress and unforeseen problems. In order to better handle these issues, we recommend that you take these five questions and make sure that you can answer each and every one of them to the fullest before you start your business. Remember that in the United States eight out of every ten businesses will not make it through the first year, but if you follow these simple steps you will be able to dodge many of the business bullets that come flying your way from the first moment you open.
Do you know what your product is going to be? This may seem to be an easy answer to most people, but when you really get into the trenches of business the one product may not work. You could have a bad experience where you're going to need to find a new product, or you may be doing so well that you need to expand to another product to increase your sales. A good example of this is starting off with coffee and it works so well that you need a good pastry to go alongside it. Knowing what the product for your business is key, but focusing on just one product is always a bad idea because you have to. Be ready to adapt at a moments notice.
What are your margins? This question is different for every person because some people know exactly what their margins are going to be, while other people may have fluctuating numbers. Knowing what you're going to be making is key to knowing the overall financial health you place will be in, and at the same time understanding what you are selling will help you to locate a quality cheaper product along the way. Along with knowing, your margins, you should budget a second and possibly even a third supplier for every product, that will not destroy your margins, because once in a while life happens and a supplier will run out.
Who is going to work for you, what experience will they have, what will you pay them? These may seem like three questions in themselves but they all manage to fall under the same veil as the first one, and that's who's going to work for you. You need to decide the type of look that will fit your business, is it casual, business, or flip-flops because these small decisions will affect whether or not customers feel comfortable and decide to come back. Forget just the look, you also need to know the level of training you are going to provide to your employees and the skills you want them to already have before they walk in the door. Lastly, you're going to have to know what minimum wage is, how much over that, if so, are you going to pay them, and what benefits, if any, will you offer.
What's already on the market? When ever you decide to open a new business you're going to want to know who your competition is and how that will affect your overall sales. You need to be able to name your competition, what they charge, when they open, and what does their place look like before you even think of opening your own. The phrase goes "Know thy enemy and you shall no thy Self," and while your competition may not be your enemy you get the point. Pricing at the wrong price point is responsible for one in ten of every business failures, or rookie mistakes.
What is my RENT? This is the most important thing that you are going to have to know before you enter into any type of business. Whether it is online rent, website fees, ad-fees, SEO fees, or anything else you need to be ready to tackle that number every month no matter what. If you're opening a brick and mortar place you're going to need to budget a percentage of your money every month for rent before you pay anything else off, that includes yourself, and take note of the city and area you're in because that will play a huge factor.
Overall, these five questions are just the tip of the iceberg when it comes to getting ready to open your own business. Yet, following and knowing the answers to these few questions can help you cut the chances of failing. For more information about starting a business SUBSCRIBE and email us for a copy of our 100 tips for starting your own small business.