To become a great and successful entrepreneur does not necessarily require a university degree or loads of cash in the bank, suffice to say little or no experience. Nonetheless a good plan and an ‘I CAN DO IT’ attitude is a must for success in any type of business startup.
Some of the most popular reasons of starting a business can include having a unique business idea, designing a career that has flexibility for growth, working towards financial independence and investment in oneself. If you consider all of this factors against the fact that 80% of all businesses in Nigeria are categorized under small businesses according to the Corporate Affairs Commission, it’s a little wonder that small businesses are everywhere but not all of them are destined to survive.
As a matter of fact only two-thirds of these businesses survive at least Two Years and about half survive Five Years of existence. In other words you may be facing a real challenge when you decide to take action, forget your day –job and become a business owner, following the necessary steps when starting your business will prepare you and your business for a bright and thriving future because you have built your business on a sure foundation for success.
Here are STEPS required to start a business successfully, take one step at a time and you’ll be on your way to successful business ownership:
Step 1: DO YOUR RESEARCH AND EVALUATE YOURSELF
In this guide it is important to start with the most basic question: THE WHY QUESTION,
WHY DO YOU WANT TO START A BUSINESS OF YOUR OWN?
Is it because you need an extra income to support your regular job or you need more freedom and you think it’s time to leave your 9-5 job to start something new?
To help you figure out the type of business you should start you will need to answer this questions with all sincerity, you also need to probe yourself further by asking yourself questions like:
- What skills do I have
- Where is my area of expertise
iii. Where does my passion lie
- What sort of lifestyle do I want to live
- How much do I need to start my proposed business
- How much can I afford…
Answering all of these questions honestly will create a solid foundation for moving forward, it is
better to overcome the odds before inception than latter.
Now that you have done your evaluation and self-appraisal you also need to do a background
research of the proposed business so as to balance the business with a little reality, you will need to answer questions like:
Does my business have the potential to succeed?
At this stage you may need to run your business idea through a validation process before you go any further, since you’ve spent time searching for business ideas, now that you’ve come up with one and you’re ready to dive right in, before you make that life-altering decision take some time to analyze the following processes:
- Identify a Target Market
The most important aspect of validating a business idea is to determine who your consumers are those who will need your product or services. You need to do a customer avatar that will clearly create a picture of your ideal customers. You need to consider factors such as Age, Gender, Education, Income and Location. The more you have a target customer base the better for you to serve them well. You will not be able to figure out if there is a market for your product or service until you have a clear idea of who will be buying from you or needing your service as the case may be. Check to know if the market is big, how complex it is, is there room enough for your product or service to mix with multitude of existing competitors…
It can also be helpful to test a segment of your target market, conduct a survey to find out who they really are, then you can decide if it makes sense to launch out by gauging the response from your survey before fully committing to launch out.
- Know What Makes Your Product/Service Different
A Unique Selling Proposition during your research will probably help you to discover that there are other businesses already in existence offering same product or service as you, this does not mean your business will fail, it only means that you need to identify what makes your product or service different from your competitors. The Unique Selling Proposition you offer your audience should clearly identify what makes your business different and why your target audience should choose you over your competitors. It could also serve as an effective tool that helps you define your business brand and makes it unique.
Step 2: MAKE A PLAN
A business plan is a blueprint that will guide your business from start to finish. To make your business idea a reality you will need a detailed business plan to follow. This is a must have for all new businesses.
There are different types of business plans for different businesses. If you intend to seek financial support from other investors or Financial Institutions you will need a TRADITIONAL BUSINESS PLAN which is a must for this type of venture. The traditional business plan is generally long and explicit and it normally comes with a common set of sections or details that investors and banks are looking for before they approve your business idea.
If you are not keen on seeking Financial Support a simple one page outline of your business ideas can give you clarity about what you intend to achieve and how you plan to achieve them. A written out plan is always better than guess work when it comes to starting a new business. People will always prefer less of a bad thing than more of a good thing, so if your business can fix a problem for others, they will always appreciate you for that. Remember the better, cheaper, faster approach, if your business is not completely new in the market think about the current offers on the market and focus on how you can create something better, cheaper and faster than what the market currently gives.
Step 3: PLAN YOUR FINANCES
Although starting a small business does not have to cost a lot of money, it definitely will involve some initial investment as well as ability to cover ongoing expenses before it starts yielding profit. It is an ideal thing to develop a spreadsheet that estimates the startup costs for the business, equipment costs, Legal fees, Insurance, License and Permits, Market Research, Branding, Property Leasing and all other necessary costs you need to keep the business running for at least 12 months including salaries to yourself and your employees.
Now that you have a figure in mind, there are a number of ways you can fund the business which includes:
-Seeking small business loans from the Banks
-Seeking small business grants from the Government
-Approaching Investors for support …
The goal here is to work through the options and create a plan that best suit your financial need to get your business off the ground.
By Babatunde Sogbetun ….to be continued on our next blog post.