Showing posts with label business. Show all posts
Showing posts with label business. Show all posts

Friday, January 24, 2014

Serious Notes Before You Start Full Time Business

Serious Notes Before You Start Full Time Business

There are a lot of people who are not really clear on why they would want to start their own business. The main reason that most people want to start their own business is for the money. Over the long term you are probably going to make more money running your business than you will working for somebody else. Of course there are some people who choose to start their own business simply because they hate the idea of working for somebody else. One of the real attractions for a lot of people when starting a business is the fact that their time is their own.

Before get into full time business, here is serious notes to take:

1) Are you mentally ready? 

Are you prepare to work extra hard, accepting the challenge, take risks, to sacrifice time for yourself and family. If your business fails, you still have to put food on the table. 
Do you have to pay back the loan taken? 
Do you have a plan B?

The biggest sacrifice that you are going to have to make when you start your own business is going to be financial. It is recommended that individuals have enough available cash or a stream of alternative cash flow to live for at least one year, if not longer.

There are lots of people who really like the idea of running their own business. Unfortunately a lot of those people don't really think about what is involved in starting a business. It is important that you think about this before you rush into starting your own business.

2) For company partnerships – majority cannot last.

How well you know your partners is more important than how long. 
Before you start, do a detail profile of your partner or partners.
List down and study their integrity, strength, weakness, habits, personality or their spouses if they are influential or involve behind the scene. Give an overall score. If you can get 60% or more in favor, then go ahead. Do your homework.

3) Business Accounting

First, you have to do a Profit & Loss Account.
Revenue less Overhead Expenses = Profit or (Loss)
Overhead Expenses are generally fixed and that is easy to be accounted for.
The difficult part is the Revenue. You can only do a forecast.
Do not be naïve, there are too many factors which can affect your business.
In this case, you must know your competitors well. What are your “value added” against them?
If you cannot find many “value added” then you better think again.
a) Open a restaurant.
Do you have one or more specialties in your menu?
How tasty are your food? Is your pricing right for the targeted customers?
Your customers are the ones that determine your specialties, the right pricing and not you.
You have to do food testing and survey with a big group.
Do your homework.
b) Open a retail ICT Shop.
If you are only doing trading of ICT gadgets, likely you will not survive.
Models are changing too fast and margin too low. So what are your “value added”?
If you provide repair services and having a network of corporate clients, then you are different. 

4) Capital

All new companies take time to grow to be profitable. After paying the initial business set up,
how many months of operating cost can your capital sustain? 

Many first timers cannot get through this initial stage. One good example is the food business. 
It is sad to see so many new restaurants closed shop within 6 months. They cannot even recover the renovation cost.

5) Market research

Why do market research? Market research will allow you to make sure that there are actually people out there who are looking to buy your product. Far too many people start businesses without doing this and it rarely works out well for them, it is a step that you can't afford to neglect.
The easiest way to do market research to see if people are buying what you are offering is to to look and see if anybody is offering something similar. The vast majority of them simply offer a variation on something that is already available.
You also have to determine if your product solves a problem that they have or if it is merely something that they would like to have, this will affect your marketing strategy. As a general rule the more original your product the more market research you need to do.

There is a lot more to market research than finding out if people are interested in the product that you are selling. The far bigger challenge is finding out who those people are. It is also important that you know who else is selling products in your market so that you can create a plan to set your product apart. Good market research will save you from wasting a lot of time and money on a bad idea.

Are you ready for full time business?