10 Considerations Prior to Starting a Business
Business plans can be great, but many don’t consider the sales and marketing aspect of the endeavor along with how realistic the venture in question is. While nothing is going to be perfect when starting a business, some aspects do need to be thought over as failure to do so can equate to a tremendous amount of time and resources wasted.
With that being said, what are some of the key points that entrepreneurs want to think about? From both personal experiences and from speaking with aspiring entrepreneurs, I have come up with 10 considerations that each aspiring business owner should consider prior to pulling the trigger on any business.
1. What are you going to sell? The big question here is whether there is an existing market. I also recommended aspiring entrepreneurs keep it as simple as possible and this means not reinventing the wheel, but rather reinventing what already has an active market base.
2. Who are you going to sell to? When answering this question, the entrepreneur must keep digging. If you’re going to sell a product or service to companies, don’t stop at the types of companies, rather list the people within those organizations that are going to be making the decisions as to whether or not the organization should purchase your product or service.
3. How are you going to reach these individuals? Once the target is determined, the accessibility of that target(s) needs to be examined along with a game-plan as to how to make these individuals aware of the company’s existence.
Things such as cold-calling, search engine optimization and targeted e-mail campaigns are all viable options.
4. How are you going to market your company? Does the entrepreneur wish to be the cost leader? Does he or she wish to be more exclusive and expensive? There is no right or wrong answer to this question, but the entrepreneur should make a decision based upon their gut feeling and the information that they acquired through proper business planning.
5. How much are you going to charge? When I first started my business, I would under-cut the competition to an extent that the consumer would be irrational not to give me a shot.
However, this was not sustainable for my organization. The best recommendation I could give regarding is to have a current pricing plan (before an industry reputation is acquired) and a future pricing plan (what the entrepreneur hopes to charge after brand recognition).
Business is a never-ending process of negotiation and the entrepreneur must have a pricing plan for when to bend and when to stand tall.
6. How long is an average sales-cycle? When figuring out expenses, it is important for the entrepreneur to have a rough estimate regarding the time it is going to take to sell his or her product or service from 2 points:
a. From the minute they call their firm operational.
b. From the minute that they contact their target individuals (see #2 and #3).
7. Who are your competitors? There are a few ways that buyers find a product or service. Let’s take two into account which are word of mouth and through the internet. For an entrepreneur to really know his or her competitors, they must do research in the shoes of a buyer.
For instance, when Googling particular keyword phrases, what companies consistently come up? There’s a hint as to how to find the players in just about any industry.
8. How are you going to fund the venture? The option that I recommend for many aspiring entrepreneurs is to start a business while you’re currently working and transition to full-time once the company is showing signs of yielding revenue.
The option that I often discourage aspiring entrepreneurs from looking into is venture capital funding which can be a huge waste of time not to mention that the entrepreneur is going to become an employee in the rare sense that he or she can sell their business.
9. What do you need to learn? Entrepreneurs, rather than thinking delegation, should be thinking as to what tasks they can achieve themselves and, thus save money by learning how to do those entrepreneurial necessities.
Entrepreneurship is about cutting-costs and being resourceful. The aspiring business owner should be well aware of what it is going to take for them (without using costly vendors) to ensure their business is operational.
10. What are you going to do for office space? When I started my company, I worked out of an apartment smaller than my office. It was not ideal, but I saved a lot of money. Pulling the trigger on an office should be one of the last things on the start-up’s mind.
Instead, focusing on #1 – #9 should yield a better return on investment when compared to paying for commercial real estate that the business owner does not own.
In the End
Remember, the more organized the entrepreneur is, the more successful they are likely to become. As an entrepreneur myself, I don’t consider under planning something that is conducive to a successful company, but over planning does not work either.
Ken Sundheim is the CEO of KAS Placement a recruitment agency specializing in sales and marketing recruiting throughout the United States and Canada.