Starting your own business offers many advantages, such as unlimited income potential, being your own boss and choosing what type of business you want to run. On the other hand, business owners often work long hours -- and many new businesses fail within the first few years of operation. Careful planning can help your chances of launching a successful business.
Research Your Market
The excitement of starting a business can make it easy to lose sight of practical concerns, such as the demands of your target market and your competition. Conduct market research before starting a business to assess whether the business is viable. For instance, if you are creating a new product or service, conduct surveys to find out whether your target customer would even be interested in the product or service and how much they would be willing to pay for it. Oftentimes, market research can help entrepreneurs avoid making costly mistakes.
Choose Your Business Model
A business model describes how a business provides value to society. This includes how the value is created and delivered, and how payment is received for the value provided. Your business model can have a large effect on the costs of operating your business. For instance, a retail store would require that you rent commercial space and buy enough inventory to stock shelves, while an online store would not require physical space.
Choose a Business Structure
A business structure describes the legal organization of a business. Types of business structures include sole proprietorships, partnerships and corporations. Small business owners often launch sole proprietorships, which allow them to control all aspects of the business and use profits as personal income that can be reinvested into the business. Partnerships involve sharing management responsibilities and income with one or more other owners.
Write a Business Plan
A business plan is document that provides an overview of critical factors that impact the operation of a business. According to the SBA, "writing a business plan serves as a road map for your venture when you're starting out." A business plan should contain a detailed description of the company, a market analysis and a financial plan that projects the expenses and revenue of the business and the amount of time it will take the business to achieve profitability.
Secure Funding
Launching a new business can be expensive and often requires a small business loan, grant or other source of funding. Many new ventures are funded by the owner herself or by using funds from friends or family members who believe in the entrepreneur's vision. A well-written business plan may help you secure funding and attract investors.
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