The most basic thing to do when starting a business is knowing what the business is about, and the product you want to sell. In this day and age, your business’ presence online is very important and can attract customers beyond your physical reach. The market you’ve chosen to enter should be vastly expanded in every platform online for your brand to be known as well as the main product of your brand.
Starting a business requires you to register it, let it be formally legit – create a business plan, logo, create a budget, and it’s often best to sell something that’s unique in the market, or if it’s something that’s already in the market, yours should be at low prices and should be the best quality.
In the business industry, it’s often important to do things better than your competition, there will always be a competition – if you start something unique, someone might sell something similar and becomes your competition – there will always be a competition, and Jeffrey Zeldman, Founder of A List Apart Magazine said “Don’t worry about people stealing your design work. Worry about the day they stop.”
Drew Houston, who is the CEO if Dropbox, also said “Don’t worry about failure; you only have to be right once.”
You may consider franchising, it is the simplest to do because the company is already established, everything from the concept, the branding to the business model. You will only need the fund to manage the business.
However, you will dig deeper in your pockets then after that, it is a guarantee that your business will be a success, considering the location of your business. If you franchise, KFC as an example, near a busy road, you are most likely to have a successful business.
This is the easiest way only when you have money. KFC is currently not accepting new franchisees, but you can purchase an already existing one for millions. You need R7 million to start your own Nando’s branch in South Africa, close to R4 million for a Chicken Licken’s branch in South Africa.
When starting a business, you need a name, sometimes the name is everything. “Determine who you are and what your brand is, and what you’re not. The rest of it is just a lot of noise.” – Geoffrey Zakarian.
“A brand is a voice and a product is a souvenir.” – Lisa Gansky.
You need to know your customers before you can launch your business. That’s the “WHO”, and the identity of your business is the “WHY”, why the name, and why the targeted customers. “Consumers are statistics. Customers are people.” – Stanley Marcus.
Your business will need a business plan, you will need to know the purpose of your business apart from making money, who you are selling the products to, the end goals of your business, startup costs – all these can be lined up on a business plan.
Don’t rush into a business without a proper business plan, you will definitely crash. You need to make market research, and demographics of potential clientele, this may include conducting a couple of surveys, this is the best way to prepare for a launch.
Know what your target customer needs and their preferences. Know your competition and consider an exit strategy for the future, to make your business even easier to run.
“As much as you might love running your business, you must have an end goal in the plan. At the very least, an exit strategy keeps you from turning your business into a glorified job – working from home, but with longer hours.” ― Kevin J. Donaldson
Once you have a business plan, you will be able to sway away from any difficulties that the business might face.
You will need to know the costs of the business when you are starting up a new business. It is either you have the startup money or you will need to borrow money. If you leave your job to start a business, you will have to feed both you and your business until you start making a profit, will you have enough money until then?
You can overestimate the amount needed, that’s perfectly fine – the problem will be if you run short because the business makes any profit.
This is when a break-even analysis is important to start determining how much money you will need.
The break-even analysis formula:
Fixed Costs ÷ (Average Price – Variable Costs) = Break-Even Point
The formula will help you determine your profit, price your business product or service and help you analyze the data.
It is important not to overspend when you start a business. “Overspending while trying to raise one’s status is a condition of economic materialism which hurts people financially, because it usually results in unnecessary debt. One does not raise social strata by buying things but instead by acquiring enough wealth to qualify for the next category of wealth.” ― Zachariah Renfro, Aristotle’s Wallet Large Print Edition: A Short Book on Applying Aristotle to Personal Finance
If you need to borrow money, consider business loans for financial assistance through a bank.
Consider your legal business structure, are you gonna run the business by yourself as a Sole proprietor, or it is gonna be a partnership kind of a business, perhaps a corporation or a limited liability company. You will need to register your business with CIPC (Companies and Intellectual Property Commission) in South Africa.
“For a successful entrepreneur, it can mean extreme wealth. But with extreme wealth comes extreme responsibility. And the responsibility for me is to invest in creating new businesses, create jobs, employ people, and to put money aside to tackle issues where we can make a difference.” – Richard Branson, founder of Virgin Group