Can you make your small business a successful venture? Thinking about ditching the 9-to-5 job and starting a small business? But before arriving at the decision, make sure that your business idea is going to make you some serious cash, or else it will end up being a money pit.
Let’s assess your idea of starting a business and see if it’s got what it takes to be a money-maker. Running your own successful business is always a thrill, so let’s explore this idea further.
As per zippia it takes 2-3 years for an average business to become profitable, it’s quite important to prepare for a few unprofitable years because those who run out of money after their first or second years are typically the first ones to fail. Before you start your business check the feasibility of your small-business idea with some research and a little math.
Can your business idea solve the problem of consumers?
If you think critically you can conclude that today’s successful businesses are those that help people tackle their challenges. Whether it’s an everyday problem they come across or a bigger problem they’ve been affected with for a while, your business motto should be easing the pain of the people.
Once you figure out the problem and who it affects, it’s time to get to know your future customers, their pain points, interests, and demographics so that you can tailor your business to their needs like an expert.
Reach out and chat with potential customers, know their buying habits, their choices, and what they need. These insights will help you greatly and help you in preparing for initial success quietly and pondering over these issues, you will get a clear understanding of what you should do.
How is Your Business Different from the Competitors?
There are real chances of success only when you differentiate your business from your competitors and make it stand out from the crowd. Doing the SWOT analysis – finding the strengths, weakness, opportunities, and threats of your idea and the competitors makes the picture clear if your idea fits into the grand scheme of things. You must try out their products or services yourself so that you will get a sneak peek behind the scenes.
Always ask for feedback from your friends, potential customers, or people from your network. Know from them where they currently shop and what they love (or don’t love) about those places. Their feedback will be quite valuable in deciding the product or its features. You should get curious and uncover what will set your business apart from the rest.
Crunch the Numbers
This is one of the important tasks you just can’t ignore. By crunching the numbers, you will figure out how much money your business can potentially make. Estimate your monthly sales and multiply that by your product’s selling price.
If you think pricing is tricky check competitors’ pricing, this will give you a good idea. Tally up all your monthly expenses including materials, rent, marketing, etc. Include every little expense, from permits to bank fees. Once you do this step, subtract expenses from revenue to get a rough idea of your monthly profit or loss. You must play around with different price points and scenarios to know better what exactly works out best for your business.
Write a Detailed Business Plan
Once you get a solid grasp on your business idea’s potential, it’s time to put pen to paper and make a detailed business plan. By now you must be clear with what’s your market size, how big is the competition, who will be your future customers, financial projections, etc.
Making a detailed business plan is not a small and easy task. But you should not worry about it. If you don’t have a business background you can always consider getting help from SCORE business mentors, Small Business Development Centers, and organizations for veterans, women, and minority business owners. Always make it a point to surround yourself with people who’ve been there, and done that. tapping the wisdom of others through formal business organizations or online groups will boost your confidence. Always reach out for support in need.