6 things to consider before starting a business (and a bonus) is what I’ll share in this article. If you wish to start a new business, or have just started one, this piece is for you.
I’ve kept it very simple, almost no technical jargon, mostly just pure tips you can implement right away.
I’ve also linked to some helpful tools and articles that will help you launch a successful business, and sustain it (the latter is what’s harder).
The best part is I’m not selling anything. Everything linked here is 100% free which means you can keep reading without waiting for the “buy this” bomb to drop!
Let’s get your business off the ground then.
Table of Contents
6 things to consider before starting a business
Here’s a list of things to consider before you start a business in 2024:
- Demand Forecasting
- Competition Research
- Fixing Finances
- Brand identity and legal obligations
- Business plan
- Partners and Mentors.
Dive in then!
Demand forecasting
A lot of businesses fail because the business has a lot of demand for the present time but the graph curves in the future. By the time the business is established and gains repute, the demand evaporates.
You must do a demand forecast analysis. It’s research that would tell you how in-demand the business was a few years back, its current popularity but most importantly its demand for the future.
This is even more important with the AI revolution taking over nearly everything! In fact, you may even use AI tools to forecast the demand of a certain idea/business for the future.
Here are some great examples of once industry-leaders who failed due to lack of demand forecasting:
- BlackBerry phones failed because they couldn’t anticipate the touch-screen shift for phones.
- BlockBuster literally laughed Netflix out of a buying proposal. Kodak missed out on the digital revolution as well.
- Point being, the current demand for your business idea is no indication for its future sustainability.
Point is, you need a booming industry that’s good not just for today, but the next few years, or decades.
Competition Research
You may have the best idea on the planet. Problem is, probably a lot of people had the same idea as well. It’s almost impossible to find a 100% unique idea in today’s age and world that has 0 saturation.
This doesn’t mean your idea won’t work. Uber and Ola co-exist, Facebook and Instagram do, Netflix and Amazon Prime as well.
Even on a smaller scale, you’ve seen hundreds of malls, shopping complexes, car dealerships and many other non-unique businesses exist.
The secret is, being able to research your competition and capture a larger share of the market.
Here are a few tips you can use:
- Identify your direct competitors. Those who’re doing exactly the same thing, in the exact same region as you.
- Identify their USP. Why do people go to them? What’s special with them?
- Identify their sources of clients. Do they spend on ads? If yes, what types of ads? Is it more a word-of-mouth arrangement? Social media engagement maybe?
You can also do a SWOT analysis to understand your competition better.
Do note that competition research may not always be favourable. At times, you may find businesses that are way too established, or have consumer-sources way too expensive.
In these cases, it’s best if you adjust your idea/base a bit to avoid being a direct competitor to them.
Fixing Finances
A lot of businesses are easy to start, hard to maintain. You must have a clear understanding of the initial investment, recurring investments, salaries and everything else that’s related to money.
You must also have at least a few months’ worth of financial runway to be able to operate without having to generate revenue.
As with all new businesses, it takes time to start making money. If you can’t ride out this time-gap, your business will fail.
This also includes taking care of the legal aspects. You need to report your income, file taxes, maintain a balance sheet, ensure staff insurance (if it’s required) basically ensure the IRS (or another third-party) doesn’t come knocking.
Finally, just be sure to have realistic, practical, doable financial goals. Your business probably will have negligible and inconsistent revenue the first few weeks or months and you need to accept that.
Brand identity and legal obligations
The most fun part (atleast for me) of starting a new business is creating the brand identity. You may or may not like to invest a lot of time when deciding your brand’s name, colour palette and other such metrics.
You must however spend a lot of time making sure you aren’t infringing on anyone’s copyright. Always do a trademark search to ensure no other businesses already have a trademark for the name, with the same class as you (yes, trademark classes matter).
The name can either be very unique and explanatory, such as “Home Depot” /” Whole Foods Market”, or opaque like “Apple”. It really depends on you, your customer-base and is mostly a personal choice.
Even if your name isn’t trademarked, always do the following before finalising a name:
- Check domain availability.
- Check availability for social media usernames (yes, even if you don’t plan on using any social media marketing. This will protect your brand from misleading accounts that may come up later).
Business plan
Your idea seems good in your brain, but only a business plan can reveal its true potential. A business plan is just a document that has all the details of your business. It should typically have the following:
- Primary purpose/reason for existence: Why does your business exist? What problem does it solve?
- Your market: Who will you sell to? Who are your competitors? What strategies do you have to outshine the competition?
- Finance: What’s your working capital? How do you plan on securing capital in the future?
- Team members: Who’s on the team, and why? Their experiences and expertise can be mentioned here.
- Basically, anything and everything that’s relevant for your business can be included here.
You can use these free AI business plan generators to help you out.
Partners and Mentors
I understand the feeling of believing you can do it all on your own. You probably can. You also probably shouldn’t. There are multiple studies that show partnerships are incredibly valuable. They increase revenue, efficiency, save time, allow you to focus on other more important aspects and so on.
This also allows specialised improvement across departments. You can do what you excel at, and your partner(s) can do the same for their departments.
It’s not just individual partners, you may even consider partnering with your competition, other brands who aren’t direct competitors but may help your business or other business entities.
If you’re absolutely against partnerships, you may atleast get in touch with mentors and experts before starting your business. They may share insights you may have missed in the rush of doing everything on your own.
[Bonus]: Things to do just after starting a new business
If you’ve read this far, I believe we can briefly discuss the things you should do just after starting a new business:
- Register your domain.
- Register all the social media channels available. Primarily, Facebook, Instagram, Youtube, Linkedin, Pinterest, TikTok, Telegram etc.
- Get trademarked. If you do not wish to get trademarked right away, at least start using the ™ symbol next to your business name. This is legal, and it tells others that you may consider getting trademarked soon. Do note that it doesn’t have any legal backing unless officially registered. At the least, it protects you from copycats at least to some extent.
- Put the word out. Use any advertising channel you want, be it social media, Youtube, or even offline banners. But you must start getting noticed as soon as possible.
- Keep a low profit margin: If your business allows, you may try to keep your profit margins low initially and increase the prices as you gain more traction.
Conclusion- 6 things to consider before starting a business
I hope you’ve got a clear idea of things you should do before starting a business, haven’t you? Some points you probably knew already, some I hope I’ve introduced to you.
You start with some demand forecast, then market and competition research before jumping into the finances. The market & competition research can help you plan your finances better. Then you work on your brand identity and business plan.
You may get a partner/mentor at any step along the way, of course it’s not mandatory. Do note that there’s no proven, guaranteed road to success. It depends on thousands of factors. However, following the steps mentioned above should increase your chances of success.
