The prospect of setting up a business is immensely appealing and as an entrepreneur success seems easy. In actual fact a vast majority of businesses that are started with enthusiasm disappear into oblivion within five years. This can be attributed to the missing due diligence tests that need to be done at the very beginning. Knowledge and information about the methods of doing business, the product to be produced and related issues helps to formulate a winning strategy for setting up the business. Before stepping into the shoes of an entrepreneur, a number of issues have to be resolved, information gathered and a business plan prepared accordingly. The following is a list of things every aspiring entrepreneur needs to know before starting:
- The resources available- As soon as the business idea begins to take shape, one of the first things that needs to be very clear is the resources available. This includes the time that can be invested, the expertise and the amount of money that can be put in. Money is critical because no matter how small the expense, returns are unlikely to appear from day one. Every business has a gestation period of a few months. The money to be invested may be personal, or funded through loans. The entrepreneur needs to decide how much he can afford to lose, and how much burden of a loan he can bear.
- Business projections- Once the funding is in place, the next step is to carry out some research about the demand for the product being produced, the existing players in the market, the product industry and who the target clientele is, and their current buying pattern.
- Competition- Unless a product is the first of its kind to appear in the market, there is bound to be competition from similar products currently being produced and consumed. It is important to know what the competition levels are and how you are going to differentiate your product to capture some of the demand. If the names of existing businesses are known their information can be easily found on online resources like LinkedIn, CrunchBase and CBInsights.
- The Legal structure- A business may seem easy to set up, but a lot of legal formalities need to be adhered to. The structure of the business can be a sole proprietorship, a partnership, a corporation and so on. The final structure adopted will decide on the liability, ownership, profit sharing and tax obligations. If such legal issues are not decided beforehand numerous problems can crop up later on.
- Understanding the governing laws- Business in any form has to follow certain laws that govern employment, taxes, the environment and so on. It is important to be familiar with these, and the easiest option is to hire a consultant who knows them all and provide the right advice and also complete the necessary paper work.
Starting a business is a large project involving much more than manufacturing and selling, and therefore making informed decisions is much better so that complications that arise later, can be avoided.
This is a guest post by Neil Jones, Head of Online Marketing For eMobileScan. With 18 sites across Europe they are on track to become one of the largest suppliers of barcode scanner and industrial handheld computers like the newly released Motorola ES400. Specialising if offering companies the tools they need to increase productivity and lower costs.