According to one study, 82% of people learning how to start a business will fail, due to cash flow problems in their startup.
That’s a pretty big deal. It means that if you plan and launch your startup in a way that will avoid cash flow problems in the first place, you’ll have eliminated the single biggest risk in launching a business — dramatically increasing your chance of success.
Whether you want to learn how to start a business to support your travels or creative life, or whether you have a unique product or business idea that you’re passionate about, it’s important to start on the right foot with your business planning. To help you avoid common entrepreneur mistakes, the following entrepreneur tips will help you determine how to start a business.
Since you’re learning how to start a business, you’ve probably already settled on a business idea you’d like to get into. But before you take off and run with it, you’ve got to compare that idea to what the market wants.
To be successful, a business has to solve a real problem, fulfill a real need, or provide something people genuinely want.
However, for a new business to succeed, it isn’t enough to just offer something the public wants. The public has already been getting what they want, or else doing without it, for a long time. Your job as the business owner is to convince them that your offer is going to be better for them than anyone else’s. It’s not enough to give them another option — you’ve got to give them an option they can’t say no to.
On the surface that may sound daunting, but it’s very doable, as long as you’re willing to do some hard thinking.
You can identify what the market wants by talking to your target customers directly; by starting a blog on your target industry, and building an audience of ideal customers; or just trying different ideas until you come upon one that sticks.
The following are some questions you should try to answer, as you formulate your ideal business idea:
- Is there a real need for this product or service?
- Who needs this product or service?
- Who is my ideal customer?
- What other businesses are currently providing this product or service, or something similar?
- How much competition is there for my idea?
- How will my business idea fit into the existing market? How will it contrast from other options already available?
- Am I a member of the community I’m trying to sell to? Am I my own biggest fan and customer? Will I enjoy building this product or providing this service long-term?
The last question may be the most overlooked idea for aspiring entrepreneurs, often considered only as an afterthought. It’s important to remember that your business is going to be your full-time job, at least at the beginning. Make sure you’re doing something you’ll genuinely enjoy.
Make a Business Plan
Before you can start building your business, you’ve got to have a plan for what you will do. Your business plan will act as a blueprint, guiding your decisions from startup through initial growth to keep you on track.
A business plan doesn’t have to be complicated. If you’re funding the venture on your own, and it’s just going to be you and perhaps one or two other people working on it part-time, a basic one-page outline of steps to follow is all you need.
If you’re going after investor funding, you will need a traditional business plan to show investors or banks. This type of plan is usually very long, very thorough, and very specific. Business plans of this kind always provide a common set of information that investors always look at before deciding on whether or not to invest in a startup.
Even if your business is going to be simple — a blog that you intend to monetize, for example — it’s still incredibly important to have some kind of written plan. It doesn’t have to be long or complicated. You just need an idea of where you’ll be going and what you’re going to do before you get started.
Armed with these insider tips for entrepreneurs, you’ll be well ahead of the competition when you launch your startup.