Globally, aspiring entrepreneurs are creating a startup boom. According to this piece on Forbes, the number of new businesses has soared worldwide, with countries like the United States seeing a 95% increase. While analysts predict that this bodes well for the international economy, this doesn’t necessarily promise the same for the entrepreneurs themselves. Many startups close after only five years. Consequently, if you’re a new entrepreneur, here are some realistic considerations that you keep in mind when opting for the entrepreneurship route:
Have you ironed out a business plan?
Research has found that although business plans are integral to foreseeing pain points and tracking opportunities for success, up to 4 out of 5 businesses haven’t written one. So, before anything else, write out your abstract ideas into a concrete plan. Your initial business plan can have your core concept, mission, vision, unique selling proposition (USP), and selling platform. Over time, you can polish this plan until it satisfies you and the market. Because industries are always changing, it also makes it easier to adjust when you have a business plan as a foundation. For instance, for your business to adapt to the market’s preference towards tourism and travel-tech, as shared by Stephen Titcombe, you could refer to your plan’s USP and tweak it from there. Otherwise, if you just go by feel, you could compromise your brand personality.
Are your finances in check?
Reports state that funding is a leading startup dilemma. To avoid this, your financials must be sound. This doesn’t just mean having your investment money ready. It also means having your personal finances healthy. Since most startups have yet to prove their worth, most investors will base their decision on the profitability of your idea and your own financial credibility. One of the prominent factors is your credit score. According to an article on AskMoney about credit scores, your score will infer how likely you are to repay debts promptly. The lower your credit score is, the more likely you’ll be rejected for a loan or given a high-interest rate due to your “risky” standing. This can affect how long it’ll take you to make your return of investment (ROI).
Does your idea offer sustainability?
In a study on Inc., the top reason why 90% of startups fail is “no market need”. This means that while a product or service is useful, the supply outweighs the demand. So, while it may offer initial revenue, there is little chance of long-term cash flow. This is a bitter pill for many entrepreneurs to swallow. But the sooner you consider this, the sooner you can pivot your offerings. Ideally, you should be able to offer your market something that can be adjusted for the times and the needs of the people. To do this, you can again refer to your business plan and get input from those you trust. This way, you’ll be enlightened to more business sustainability issues you should address before you stake any money.
Will your marketing encourage scalability?
In line with sustainability, you should also consider scalability. This involves determining whether your budding business can grow and expand. Scaling up will look different depending on the industry and company size, but it should always be a goal. To achieve this, you need to invest in marketing. As said by The Small Business Administration, entrepreneurs often scrimp on marketing. However, this is one of the most effective ways to ensure your business scales up. With the right marketing, you can reach more consumers for less money than you’d think. For example, if your customer base is teenagers, you should try digital marketing. By not looking into what marketing you can do to encourage scalability, you’re putting yourself at a disadvantage.
Considering the sensitive nature of running your own business, entrepreneurs need to cover as many bases as possible before they take the leap. When you approach your entrepreneurial pursuit with a level head, you’ll be that much closer to enjoying the fruits of your labour.
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