Starting a business can be a thrilling venture, but there are a number of factors to take into consideration before you launch your company. Essentially, everything needs to be as close to perfect as possible in order to give your business the best odds of success, especially in the first year of operation. Many businesses close their doors for good within that first year, but you can beat the odds by following these steps.
Understanding Your Market
An understanding of your business’s market is crucial at a fundamental level. The market you find yourself in determines several factors that should inform your business model. For example, a given market has its own set of demographics, and demographics are groups of people that each respond to a different kind of product and advertising. One example of this is the difference between selling an air conditioner in Orange County compared to selling the same air conditioner in Anchorage. The Californian heat puts air conditioning in demand, whereas Alaska would be better served by heating solutions. Likewise, there is an association between California and youth, whereas Florida is more associated with the elderly. Factors like this should inform the entire premise of your business before you make any concrete decisions.
Finding Your Niche
A niche is essentially the X factor that separates your business from your competitors. The more saturated a particular market is, the more important the niche. For example, there are numerous pizza restaurants in New York City, which makes it much harder for a pizzeria to stand out from the crowd. Subversion is your best friend; subverting expectations in some way leaves a lasting impression that improves brand recognition while simultaneously proving that you have something that your competitors do not. One prominent way to do so is the current trend of creating bizarre food items for your restaurant. While there are many Tex Mex restaurants to choose from, Taco Bell makes a point of experimenting with their menu in order to boggle the mind in addition to providing a desirable product.
Arranging a Supply Chain
The supply chain is the series of businesses that are responsible for turning raw materials into a consumer grade product. More specifically, a supply chain typically takes the form of a manufacturer, a distributor, and a retailer. Keep in mind, however, that non retail businesses like restaurants still make use of manufacturers and distributors, and a given retailer may depend on multiple manufacturers. In order to provide your customers with goods, you will almost certainly need to bring goods in from other companies earlier on in the supply chain, though there are exceptions. Some restaurants, for example, have onsite gardens that provide them with some or all of the necessary ingredients, but this is quite rare. The reason for this is simple; additional functions at the same physical location require additional space and staff that may prove untenable to small business owners.
Securing Funding
While some may start a business knowing full well that they can finance it themselves, this is often not the case. Instead, small business owners tend to lean on loans and investments to get their company started. While there are certainly differences between loan officers and investors, the two both require a succinct and compelling pitch. A pitch is what convinces a loan officer or investor that your business will be profitable. After all, loans and investments are services provided to a business owner with the expectation of being paid back with interest once the business proves successful. Therefore, there is a vetting process baked into the loan or investment process in which the business owner must make a case for his or her business’s likely success.
Marketing Your Brand
Marketing is a complex and nuanced field that should ideally be handled by experts, but this is often not possible for smaller businesses. Instead, many small business owners must juggle marketing themselves among the many other parts of operating a fledgling company. While marketing can be very complex, the basic tenets are fairly simple. The most important things to remember are that there are many ways to advertise, some of them quite affordable, and the many different aspects of your company’s marketing campaign need to be copacetic in order to efficiently and accurately convey your value and personality to the public.
Opening a business can be a triumphant experience, but it’s not without its stressors. There are many things to tackle before your business can even open its doors, and there is always the risk they close again in short order. With this guide, however, you have a blueprint that can lead you through the early stages of opening your business with minimal risk.
